Charlotte real estate in June 2023 saw home sales decline 22.1% year-over-year, while home prices increased 2.5%, on average. Higher home prices, increasing interest rates, and fewer new listings and less inventory are clearly impacting sales. Homes sold in 29 days, on average, down 5 days from the previous month. New listings declined putting pressure on inventory, which decreased 17.2% year-over-year. The months supply of homes remained low at 1.4 months, keeping Charlotte in “home seller territory.” Home affordability continues to suffer.
Charlotte Real Estate Activity: June 2023
Charlotte real estate market in June 2023: latest news on the Charlotte Region and what it means for you…
June 2023 home sales declined in the 16-County Charlotte Region year-over-year, as did pending sales. Sales are happening, but not at the volumes experienced in 2021 and the first half of 2022. Sales in Lincoln County, Denver, Lincolnton, Chester County (SC), and Fort Mill (SC) increased, showing that there are buyers willing to trade a longer commute for affordability. We are seeing the same trends in pending sales with pending sales up in Anson County, Cabarrus County, Cleveland County, Gaston, Kannapolis, Lake Norman, Fort Mill, Tega Cay, etc.
Higher home prices due to a tight supply of inventory coupled with fluctuating interest rates have impacted affordability and continued to frustrate buyers. The market in 2021 was clearly an anomaly and we can now see that year-over-year sales declines from 2022 appear significant. Sales are still occurring… just not at the pace of the last couple of years. By the same token, the housing market continues to experience steady activity with high buyer interest and multiple offer situations in highly desired areas of the Charlotte Region.
Home buyers remain frustrated by fluctuating rates, lack of new inventory, rising home prices, and economic uncertainty. Home sales and mortgage applications have fallen since last year as buying “power” declines. The typical mortgage payment is higher (28% to $2,430), pricing some buyers out of the market. Pending sales are a good indicator of future sales and buyer demand. We should expect fewer closed sales in the months to come. Furthermore, the fact that we also see fewer new listings coming on the market indicates Charlotte region will continue to experience inventory challenges, which impact home price appreciation.
Closed sales declined 22.1% (by 1,178 homes) year-over-year in June. Compared with May 2023, closed sales increased by 175 homes. Pending sales also declined 6.2% year-over-year. Month-over-month pending sales declined 6.2% by 274 properties.
The real cost to buy a house has spiked over 55% since 2022, as the Federal Reserve raised rates seven times in 2022 and already four times in 2023. Mortgage rates topped 6% for the first time since 2008 and went over 7%. The Charlotte region housing affordability index continues to drop and impact sales volume. Housing affordability dropped 8% year-over-year in June 2023.
Year-over-year average list and sale prices increased in June 2023 and year-to-date. Home prices are still increasing, but at a slower pace. Median sale price decreased 2.5% year-over-year and is flat year-to-date versus June 2022. Month-over-month, the median sale price is 1.3% higher. Charlotte region’s median sale price appears to be trending down.
Prices peaked in summer 2022, with the median sale price down 12% since June 2022 and falling each month since December 2022. The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices.
After increasing for 12 consecutive months, inventory declined in June 2023. Inventory declined 17.2% compared to the same time last year. In June there were 1,033 fewer properties for sale than one year ago. Month-over-month, the number of properties for sale decreased by 296.
The months supply of housing is up from 1.3 months to 1.4 months year-over-year. Month-over-month, the months supply of inventory also increased by 0.1 months. The 1.4 months supply of homes keeps Charlotte region in “seller territory.” However, sellers don’t have the same strong position they had in previous years, with pricing key to attracting buyers and selling quickly. Although Charlotte Region is still technically a seller’s market, the days of receiving significant amounts over asking price are behind us and sellers need to reset their expectations.
New listing activity decreased 28.6% in June 2023 compared with June 2022, with 1,866 fewer properties listed. Month-over-month, Charlotte region saw 87 fewer listings come on market. With new listing activity declining month after month, it’s no wonder that inventory now also appears to be trending downwards
Averaging 29 days on market, the days on market increased 107.1% by 15 days year-over-year, but were five days lower than in the previous month of May. Pricing a home correctly remains critical for sellers, as the “right” price brings buyers and results in fewer days on market.
With a list to sale price ratio of 98.5% in June 2023 (down 3.3% year-over-year, but up 0.5% month-over-month), buyers are carefully scrutinizing listing prices and sellers are not in as strong of a position as they were during the pandemic years.
Moving forward into the remainder of the summer selling season, both sellers and buyers continue to be distracted by growing economic concerns and negative housing headlines. The slowdown in home sales that began when mortgage rates increased in 2022 is expected to continue in the coming months. The costs to purchase a home will remain high, challenging affordability at a time when overall budgets continue to be squeezed by inflation. Buying power will remain on the decline with typical mortgage payments 28% higher on average, pricing many buyers out of the market.
Charlotte Region Real Estate Snapshot: June 2023
Closed Sales: down 22.1% year-over-year; down 21% year-to-date.
Homes Sold: 4,161 in June 2023 versus 5,339 in June 2022.
Pending Sales: down 6.2% year-over-year; down 12.8% year-to-date.
New Listings: down 28.6% year-over-year; down 21% year-to-date.
Inventory of Homes: down 17.2% year-over-year to 4,963 compared with 5,996 in June 2022.
Months Supply of Homes: up 7.7% with 1.4 months supply of homes compared with 1.3 months in June 2022.
Days on Market Until Sale: 29 days in June 2023 versus 14 days in June 2022. Year-to-date, days on market are up 22 days year-over-year to 40 days.
Average Sale Price: up 2.9% year-over-year to $487,755. Year-to-date home prices were up 3.8% year-over-year to $456,208.
Median Sale Price: down 2.5% year-over-year to $389,900 (but up month-over-month from $385,000). Year-to-date, median sale price was flat at $375,000.
% of Original List Price Received: 98.5%, decreasing 3.3% year-over-year (but up month-over-month by 0.5%); year-to-date, the list to sale price ratio was 96.9%, down 4.8%.
Housing Affordability Index: down 8% year-over-year to 80 from 87; year-to-date, the affordability index was down 9.8% to 83 from 92.
Want to know what this would mean for your family if you decide to buy or sell a Charlotte region home?
This Charlotte region housing market update is provided by Nina Hollander with Coldwell Banker Realty, Greater Charlotte area residential real estate experts serving Charlotte region home buyers and sellers for 24+ years.
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