Latest news on the Charlotte Region’s housing market and what it means for you…
October 2023 home sales declined in the 16-County Charlotte Region year-over-year, while pending sales increased for the first time in 2023 — up 3%. Although home buyers remain frustrated by fluctuating rates, lack of new inventory, rising home prices, and economic uncertainty it does appear that buyers are adjusting to the higher interest rate environment. Home showing activity rose in October in Matthews, Fort Mill, Kannapolis, Cabarrus County.
The Charlotte market has stopped seeing large fluctuations in prices, indicating the market is slowly moving towards stabilization. Prices were stable in October with the median sale price unchanged from October one year ago. Average sale price increased 2.5% year-over-year. With the benefit of hindsight, it would appear that the Charlotte region median home price peaked in June 2022, when it rose to nearly $400,000.
Listing activity continues to decline and was down both year-over-year and month-over-month in October. Year-to-date listings were down 18.2% in October, reflecting sellers’ unwillingness to give up low mortgage rates and take on higher rates for a new home. By the same token listing activity was in the “plus column” in several counties, including Gaston, Iredell, Lincoln, Montgomery, and Rowan.
Charlotte region’s inventory declined 19.5% in October compared with October 2022, while the months supply of homes declined 5.3% year-over-year to 1.8 months. Month-over-month, the months supply of inventory increased by 0.1 month. This would indicate that the Charlotte region remains a seller’s market and that demand in October increased relative to supply. However, sellers don’t have the same strong position they had in previous years. Pricing remains key to attracting buyers and selling quickly.
Although Charlotte Region technically remains a seller’s market with just 1.8 months of inventory, the days of receiving significant amounts over asking price are behind us and sellers need to reset their expectations, as well as ensure their homes are in good condition and show well. Buyers appear willing to pay a premium price for homes, but they expect those homes to be in move-in condition and updated.
Closed sales declined 13.5% (by 493 homes) year-over-year in October. Compared with September 2023, closed sales decreased by 160 homes. Pending sales increased 3% year-over-year (by 93 homes).
The real cost to buy a house has increased significantly since 2022, as the Federal Reserve continued to increase rates. Since May 2023, the average 30-year fixed rate mortgage has remained above 6.5% and hit a two-decade high September at 8%, impacting affordability. The Charlotte region housing affordability index continues to drop and impact sales volume. Housing affordability dropped 19.5% year-over-year in October 2023.
Year-over-year average list and sale prices increased in October 2023 and year-to-date. Home prices continue to increase, but at a slower pace. Median sale price remained unchanged year-over-year and is down 0.3% year-to-date versus one year ago. (The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices.) The median sale price drop year-over-year does not mean that home prices are falling. Rather it indicates that sale prices are moving towards stabilization.
Averaging 32 days on market, the days on market increased 14.3% by 4 days year-over-year. Days on market were two days higher than in the previous three months. Charlotte City homes sold even more quickly in October at 27 days, just one day higher than in October 2022. 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 97.4 % in October 2023 (up 0.1% year-over-year and down 0.3% 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 holiday selling season, both sellers and buyers will continue to be distracted by growing economic concerns, higher interest rates, affordability, 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 high mortgage rates, pricing many first-time and workforce buyers out of the market.
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 expert serving Charlotte region home buyers and sellers for 25 years.
If you’re considering selling or purchasing a home in the Charlotte region, I’d love an opportunity to earn your business, to exceed your expectations, and to show you why experience matters and how: