Charlotte Region real estate in July 2022 saw home sales drop 21.5% year-over-year, while home prices increased 15.4%, on average. Median home sale prices set a new record. Sales dropped for a seventh consecutive month due to higher home prices, increasing interest rates, and low inventory. In July the days on market remained low at 15 days and were two days lower year-over-year. The months supply of homes, while increasing, stood at 1.4 months, keeping Charlotte in “home seller territory,” despite an increase in inventory overall. With a list to sale price ratio of 100.3%, buyers were still willing to purchase a home at a premium price.
Charlotte Region Remained A Seller’s Market In July 2022
Latest news on the Greater Charlotte region’s real estate market in July 2022 and what it means for you…
July 2022 home sales were down year-over-year for a seventh consecutive month. Pending sales were also down year-over-year for a seventh consecutive month. Higher home prices coupled with higher interest rates have impacted affordability and cooled buyer demand. Home buyers are frustrated by higher rates, rising home prices, and economic uncertainty. As a result home sales and mortgage applications have fallen since last year at the same time. As pending sales are a good indicator or future sales and buyer demand, we can expect lower closed sales in the months to come.
These trends are signaling a return to a slower pace of sales, more like what we were seeing in 2019 prior to the pandemic. Closed sales were down 21.5% year-over-year in July. Pending sales were also down 14.6% year-over-year.
The real cost to buy a house has officially spiked over 50% since the start of the year. The housing affordability index continues to drop and impact sales volume. Housing affordability dropped 20.9% year-over-year by 18 points. Year-to-date the housing affordability index dropped 23.3% by 21 points.
Despite, lower closed and pending sales, both average and median listing and sale prices increased in July 2022, year-over-year, with median sale prices reaching record highs. The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices. A contributing factor to the increase in median sale price is the higher price point of homes that are for sale.
Housing inventory increased for a second consecutive month in July 2022. Inventory is up 23.9% compared to the same time last year and the months supply of housing is up from 1.1 months to 1.4 months year-over-year. Continued increases in inventory should help cool price appreciation. Nonetheless, the 1.4 months supply of homes keeps Charlotte region in “seller territory.” We need four months of inventory to consider it a “balanced” market, much less a buyer’s market, which would need six months of supply.
While housing inventory has increased, new listing activity decreased in July 2022 compared with July 2021 and is still down 3.1% year-to-date compared with the same time frame one year ago.
Averaging 15 days on market, homes continued to sell quickly, increasing by one day year-over-year and month-over-month. Year-to-date days on market dropped by 2 days versus July 2021. With homes being purchased quickly, increases in inventory will do little to alleviate the inventory shortage in the short term. Longer term, with buyer activity slowing because of rising rates and prices, should sellers continue to list, inventory will slowly increase and prices should also start to settle to some extent.
With a list to sale price ratio of 100.3% in July 2022 (down 1.5% year-over-year and down 1.6% month-over-month), home seller are still receiving over listing price for their homes. Continued declines in the list to sale price ratio could mean that those fewer buyers who continue to shop for a home are carefully scrutinizing price.
Moving forward for the remainder of the summer selling season, lack of adequate inventory to satisfy buyer demand coupled with increasing interest rates and home price increases reducing affordability are what will hold the market back in terms of sales momentum. While buyers are frustrated by rising interest rates, rising home prices, thin inventory, and inflation, it’s not unreasonable to assume that serious buyers continue to actively look for homes. Buyers are motivated to act sooner rather than later because of rising mortgage rates and rising rents which continue to outpace monthly mortgage payments.
There seems to be lots of talk about a market crash. However, the affordability issues the Charlotte Region market is facing do not point to a housing bubble or market collapse. Housing bubble are a result of speculation and not of rising buyer demand. Speculation is not driving Charlotte area housing demand. Historically, there has not been sufficient housing built in the Charlotte region to keep up with the demand we’ve seen over the past years and the population growth in the region.
Charlotte Region Real Estate Snapshot: July 2022
Closed Sales: down 21.5% year-over-year; down 7.0% year-to-date.
Homes Sold: 4,252 in July 2022 versus 5,415 in July 2021; 31,150 year-to-date versus 33,478 for the same time period one year ago.
Pending Sales: down 14.6% year-over-year; down 11.4% year-to-date.
New Listings: down 6.0% year-over-year; down 3.1% year-to-date.
Inventory of Homes: up 23.9% year-over-year to 6,637 compared with 5,356 in July 2021.
Months Supply of Homes: up 27.3% with 1.4 months supply of homes compared with 1.1 months in July 2021.
Days on Market Until Sale: 15 days in July 2022 versus 14 days in July 2021. Year-to-date, days on market are down 10.0% to 18 days year-over-year from 20 days in July 2021.
Average Sale Price: up 15.4% year-over-year to $458,635. Year-to-date, average sale prices are up 16.4% to $441,454 year-over-year.
Median Sale Price: up 16.7% year-over-year to $385,000. Year-to-date, median sale prices are up 19.6% to $376,665 year-over-year.
% of Original List Price Received: 100.3%, decreasing 1.5% year-over-year. Year-to-date, the percent of original list price received is 101.6%, up 0.7% year-over-year.
Housing Affordability Index: down 20.9% year-over-year to 68 from 86; year-to-date, down 23.3% to 69 from 90.
Want to know what this would mean for your family if you decide to buy or sell a Charlotte region home?