Charlotte Region real estate in June 2022 saw home sales drop 13.6% year-over-year, while home prices increased 17.5%, on average. Median home sale prices set a new record. Sales dropped for a sixth consecutive month due to higher home prices, interest rates, and low inventory. Year-over-year, days on market remained flat at 14 days. The months supply of homes stood at 1.1 months, keep Charlotte in “home seller territory,” despite an increase in inventory overall. With a list to sale price ratio of 101.9%, it’s clear buyers are still willing to purchase a home at a premium price.
Charlotte Region Remained A Seller’s Market In June 2022
Latest news on the Greater Charlotte region’s real estate market in June 2022 and what it means for you…
June 2022 home sales were down year-over-year for a sixth consecutive month. It would appear that buyers are backing away from rising interest rates and home prices, as the housing affordability index also continues to diminish. Pending sales were also down year-over-year for a sixth consecutive month. Higher home prices coupled with higher interest rates have impacted affordability and cooled buyer demand. As a result home sales and mortgage applications have fallen sharply since last year at the same time.
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 13.6% year-over-year in June. Pending sales were also down 12.3% year-over-year. More homes sold in June 2022, however, than in May 2022. While, the drop in sales is a result of buyers backing away from higher interest rates and higher home prices which are impacting affordability, it can also be partially attributed to the continued low inventory of homes, which stood a 1.1 months of inventory in June.
The real cost to buy a house has officially spiked over 50% in just 6 months. The housing affordability index continues to drop and impact sales volume. Housing affordability dropped 22.6% year-over-year by 19 points. Year-to-date the housing affordability index dropped 23.1% in June by 21 points.
Despite, lower closed and pending sales, both average and median listing and sale prices increased in June 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. Median sale price has also risen due to the higher price point of homes that are for sale.
Housing inventory remained at very low levels. With just 1.1 months supply of homes (up 10.0% from 1.0 months in June 2021), we continued to see some of the lowest levels of inventory on record in the Charlotte region. Inventory increased 12.7% over June 2021. However, Charlotte region had 1,546 more homes for sale in June than it did in May 2022. New listings increased by some 257 homes in June 2022 compared with June 2021. This is a positive for home buyers, although it should be pointed out that on a year-to-date basis in June 2022, new listings were down 2.7% versus June 2021.
Averaging 14 days on market, homes continued to sell quickly. Days on market until sale were flat year-over-year and month-over-month. Year-to-date, average days on market are also flat at 18 days compared with June 2021. With homes being purchased virtually as quickly as they are listed, 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 101.9% in June 2022 (down 0.1% year-over-year), it’s clear that home sellers continue to be in command of the market and are still receiving over asking price for their homes. This metric is telling for sellers, as it looks at the ratio of sold price to list price and indicates that buyers are still willing to pay a premium for a home.
Moving forward in 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 could 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.
Charlotte Region Real Estate Snapshot: June 2022
Closed Sales: down 13.6% year-over-year; down 5.3% year-to-date.
Homes Sold: 5,041 in June 2022 versus 5,835 in June 2021; 26,576 year-to-date versus 28,063 for the same time period one year ago.
Pending Sales: down 12.3% year-over-year; down 9.5% year-to-date.
New Listings: up 4.1% year-over-year; down 2.7% year-to-date.
Inventory of Homes: up 12.7% year-over-year to 5,344 compared with 4,732 in June 2021.
Months Supply of Homes: up 10.0% with just 1.1 months supply of homes compared with 1.0 months in June 2021.
Days on Market Until Sale: 14 days in June 2022 versus 14 days in June 2021. Year-to-date, days on market are down 18.2% to 18 days year-over-year from 22 days in June 2021.
Average Sale Price: up 17.5% year-over-year to $476,168. Year-to-date, average sale prices are up 16.7% to $438,845 year-over-year.
Median Sale Price: up 19.4% year-over-year to $400,000. Year-to-date, median sale prices are up 20.1% to $375,000 year-over-year.
% of Original List Price Received: 101.9%, decreasing 0.1% year-over-year. Year-to-date, the percent of original list price received is 101.8%, up 1.1% year-over-year.
Housing Affordability Index: down 22.6% year-over-year to 65 from 84; year-to-date, down 23.1% to 70 from 91.
Want to know what this would mean for your family if you decide to buy or sell a Charlotte region home?