Charlotte Region real estate in November 2022 saw home sales drop 35.9% year-over-year, while home prices increased 8.6%, on average. Sales dropped for an 11th consecutive month due to higher home prices, increasing interest rates, and fewer new listings. Homes sold in 34 days, on average. The months supply of homes, while increasing, remained below two months, keeping Charlotte in “home seller territory.” Home affordability is suffering.
Charlotte Region Real Estate Activity: November 2022
Latest news on the Greater Charlotte region’s real estate market in November 2022 and what it means for you…
November 2022 home sales were down year-over-year for an 11th consecutive month. Pending sales were also down year-over-year for an 11th consecutive month.
Higher home prices coupled with higher interest rates have impacted affordability and continued to cool buyer demand. The market in 2021 was clearly an anomaly and we can now see that year-over-year sales declines over all of 2022 appear significant. Sales are still occurring… just not at the pace of the last couple of years.
Home buyers are frustrated by higher rates, rising home prices, and economic uncertainty. Consequently, home sales and mortgage applications have fallen since last year as buying “power” declines. 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 were down 35.9% year-over-year in November. Closed sales were down by 455 homes versus October 2022. Pending sales were also down 36.1% year-over-year and month-over-month with 501 fewer pending sales in November versus October 2022.
The real cost to buy a house has spiked over 55% since the start of the year, as the Federal Reserve raised rates four times between June and November 2022. Mortgage rates topped 6% for the first time since 2008. The Charlotte region housing affordability index continues to drop and impact sales volume. Housing affordability dropped 30.8% year-over-year by 28 points. Year-to-date the housing affordability index dropped 36.4% by 36 points.
Despite, lower closed and pending sales, average list and sale prices increased in November 2022, year-over-year. Home prices are still increasing, but at a slower pace. Median sale price also increased year-over-year, but only by about $2,000. The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices.
Pricing a home correctly is increasingly critical for sellers, as the “right” price brings buyers and fewer days on market. In November we saw 3,300 price reductions on listed homes — a year-over-year increase of 195%. However, price reductions were down 15% month-over-month when we saw 3,900 price reductions in October 2022.
Housing inventory increased for a sixth consecutive month in November 2022. Inventory is up 48.8% compared to the same time last year. The months supply of housing is up from 1.0 months to 1.8 months year-over-year. Month-over-month, the months supply of inventory was flat. Month-over-month, inventory decreased by 185 homes. Continued increases in inventory with weaker buyer demand should help cool price appreciation. Nonetheless, the 1.8 months supply of homes keeps Charlotte region in “seller territory.” We need four months of inventory to consider it a “balanced” market. A buyer’s market would need six months of supply.
While housing inventory has increased, new listing activity decreased 27% in November 2022 compared with November 2021 and is down 8.8% year-to-date compared with the same time frame one year ago. Month-over-month, Charlotte region saw 874 fewer new listings.
Averaging 34 days on market, homes continued to sell relatively quickly, increasing by 13 days year-over-year and by seven days month-over-month. Year-to-date days on market were one day higher compared with November 2021. With new listings down, 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.
With a list to sale price ratio of 95.7% in November 2022 (down 4.5% year-over-year and down 1.1% month-over-month), buyers are carefully scrutinizing listing prices and negotiating on price. Year-to-date, the list to sale price ratio declined 0.7% to 100.1% in November 2022. Buyers may have more bargaining power now than at any point during the pandemic.
Moving forward into the winter selling season, slowing buyer demand because of economic concerns, increasing interest rates and home price increases reducing affordability are what will hold the market back in terms of sales momentum.
Charlotte Region Real Estate Snapshot: November 2022
Closed Sales: down 35.9% year-over-year; down 13.5% year-to-date.
Homes Sold: 3,113 in November 2022 versus 4,854 in November 2021; 45,216 year-to-date versus 56,083 for the same time period one year ago.
Pending Sales: down 36.1% year-over-year; down 19.4% year-to-date.
New Listings: down 27% year-over-year; down 8.8% year-to-date.
Inventory of Homes: up 48.8% year-over-year to 7,326 compared with 4,925 in November 2021.
Months Supply of Homes: up 80% with 1.8 months supply of homes compared with 1.0 months in November 2021.
Days on Market Until Sale: 34 days in November 2022 versus 21 days in November 2021. Year-to-date, days on market were one day higher at 20 days compared with one year ago.
Average Sale Price: up 8.6% year-over-year to $443,290. Year-to-date, average sale prices are up 15.6% to $445,174 year-over-year. Month-over-month, average sale price decreased just over $15,000 in November. Year-to-date, average sale price was flat.
Median Sale Price: up 8.1% year-over-year to $381,500. Year-to-date, median sale prices are up 16.9% to $379,990 year-over-year. Month-over-month median sale prices were essentially flat.
% of Original List Price Received: 95.7%, decreasing 4.5% year-over-year. Year-to-date, the percent of original list price received is 100.1%, down 0.7% year-over-year.
Housing Affordability Index: down 30.8% year-over-year to 63 from 91; year-to-date, down 36.4% to 63 from 99.
Want to know what this would mean for your family if you decide to buy or sell a Charlotte region home?