Charlotte real estate in May 2023 saw home sales decline 16.6% year-over-year, while home prices increased 4.6%, on average. Sales dropped for a 17th consecutive month due to higher home prices, increasing interest rates, and fewer new listings. Homes sold in 34 days, on average, down 5 days from the previous month. New listings declined putting pressure on inventory. The months supply of homes, while increasing, remained low at 1.3 months, keeping Charlotte in “home seller territory.” Home affordability continues to suffer.
Charlotte Real Estate Activity: May 2023
Charlotte real estate market in May 2023: latest news on the Charlotte Region and what it means for you…
May 2023 home sales declined in the 16-County Charlotte Region year-over-year for a 17th consecutive month. Pending sales were also down year-over-year for a 17th consecutive month. Sales are happening, but not at the volumes experienced in 2021 and the first half of 2022.
Higher home prices due to a tight supply of inventory coupled with fluctuating interest rates have impacted affordability and frustrated 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 paying will be 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 declined16.6% (by 795 homes) year-over-year in May. Compared with April 2023, closed sales declined by 405 homes. Pending sales were also declined — 13.1% year-over-year. Month-over-month pending sales were flat.
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 9.9% year-over-year in May 2023.
Despite, fewer closed and pending sales, year-over-year average list and sale prices increased in May 2023 and year-to-date. Home prices are still increasing, but at a slower pace. Median sale price decreased 2% year-over-year and is flat year-to-date versus May 2022. Charlotte region’s median sale price appears to be trending down. Although relatively minor, May was the fourth consecutive month of year-over-year declines in the median sale price. 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.
Housing inventory increased for a 12th consecutive month in May 2023. Inventory was up 6.7% compared to the same time last year. In May there were 293 more properties for sale than one year ago. Month-over-month, the number of properties for sale decreased by 30.
The months supply of housing is up from 0.9 months to 1.3 months year-over-year. Month-over-month, the months supply of inventory remained unchanged. The 1.3 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.
While housing inventory has increased, new listing activity decreased 25.4% in May 2023 compared with May 2022, with 1,552 fewer properties listed. Month-over-month, Charlotte region saw 219 fewer listings come on market.
Averaging 34 days on market, the days on market increased 142.9% by 20 days year-over-year, but were five days lower than in the previous month of April. 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% in May 2023 (down 4.8% 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 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: May 2023
Closed Sales: down 16.6% year-over-year; down 21.5% year-to-date.
Homes Sold: 3,986 in May 2023 versus 4,718 in May 2022.
Pending Sales: down 13.1% year-over-year; down 13% year-to-date.
New Listings: down 25.4% year-over-year; down 19.3% year-to-date.
Inventory of Homes: up 6.7% year-over-year to 4,667 compared with 4,374 in May 2022.
Months Supply of Homes: up 44.4% with 1.3 months supply of homes compared with 0.9 months in May 2022.
Days on Market Until Sale: 34 days in May 2023 versus 14 days in May 2022. Year-to-date, days on market are up 24 days year-over-year.
Average Sale Price: up 4.6% year-over-year to $483,322. Year-to-date home prices were up 4.1% year-over-year.
Median Sale Price: down 2% year-over-year to $385,000 (but up month-over-month). Year-to-date, median sale price was flat.
% of Original List Price Received: 98%, decreasing 4.8% year-over-year (but up month-over-month); year-to-date, the list to sale price ratio was 96.5%, down 5.2%.
Housing Affordability Index: down 9.9% year-over-year to 82 from 91; year-to-date, the affordability index was down 11.5% to 85 from 96.
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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