Latest news on the Charlotte Region and what it means for you…
September 2023 home sales declined in the 16-County Charlotte Region year-over-year, as did pending sales. Although contract activity was not at the level of previous years, it was down just 4.1% compared with September 2022. This was the smallest year-over-year decrease in 2023. While 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.
The Charlotte market has stopped seeing large fluctuations in prices, indicating the market is slowly moving towards stabilization. Prices were stable in September with the median sale price virtually unchanged from September one year ago (down 0.2%). Average sale price increased 4.7%.
Listing activity continues to decline and was down both year-over-year and month-over-month in September. Year-to-date listings were down 19.7% in September, reflecting sellers’ unwillingness to give up low mortgage rates and take on higher rates in a new home.
Charlotte region’s inventory declined in September by 22.8% compared with September 2022, while the months supply of homes declined 5.6% year-over-year to 1.7 months. This would indicate that the Charlotte region remains a seller’s market and that demand in September increased relative to supply. However, sellers don’t have the same strong position they had in previous years. Pricing is 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, as well as ensure their homes are in good condition and show well. The bright spot in terms of inventory is that 10 or the 16 counties in the Charlotte region had two or months of supply in September. Comparing Quarter 2 to Quarter 3, inventory increased 19% across the region.
Closed sales declined 24.9% (by 1,100 homes) year-over-year in September. Compared with August 2023, closed sales decreased by 559 homes. Pending sales also declined 4.1% year-over-year. Month-over-month pending sales declined by 492 properties.
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 impacting affordability. The Charlotte region housing affordability index continues to drop and impact sales volume. Housing affordability dropped 10.3% year-over-year in September 2023.
Year-over-year average list and sale prices increased modestly in September 2023 and year-to-date. Home prices continue to increase, but at a slower pace. Median sale price declined 0.2% year-over-year and is down 0.5% 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 31 days on market, the days on market increased 29.2% by 7 days year-over-year. Days on market were two days higher than in the previous three months. 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 97.7 % in September 2023 (up 0.5% year-over-year and down 0.4% 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 late fall/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 higher mortgage rates, pricing many first-time and workforce buyers out of the market.
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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 24+ years.
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