Supply and demand -- the most basic of economic principles we learned in Economics 101! The more supply you have, the lower the price you pay. The lower the supply, the higher the price. And real estate is NO exception. Any time we have less than six months of housing inventory it's considered a seller's market and we should expect home prices to increase. Did you realize that nationally we have not seen a six month supply of homes for almost five years now?
The Charlotte, North Carolina region has seen a precipitous drop in housing inventory since January 2012, when we began the year with 8.8 months of inventory and were clearly a buyer's market. Since January 2012 our housing inventory has dropped and home prices have increased as follows:
~ January 2013: 5.0 months of housing inventory at the start of the year. In one year Charlotte went from a buyer's market to a neutral market to more of a seller's market. By the end of the year, average home prices for sold homes increased 6.5%.
~ January 2014: 4.7 months of housing inventory at the start of the year. By the end of 2014, average home prices for sold homes increased 4.1%.
~ January 2015: 4.0 months of housing inventory at the start of the year. By the end of 2015, average home prices for sold homes increased 4.5%.
~ January 2016: 3.0 months of housing inventory at the start of the year. By the end of 2016, average home prices for sold homes increased 6.5%.
~ January 2017: 2.3 months of housing inventory at the start of the year. Year-to-date for January and February, Charlotte region's home prices increased 9.1%.
Is it any wonder that so many Charlotte region home buyers are suffering from sticker shock these days? But so long as our inventory is so low and demand continues to outstrip supply, Charlotte buyers cannot expect home prices to do much but continue to increase.
The infographic below clearly illustrates just how supply of homes for sale and the demand for homes for sale impact housing prices whether you are in the Charlotte region or another part of the USA.
Contact Carolinas Realty Partners if we can answer any questions you might have about the Charlotte metro housing market or about what buying a home listing your home for sale might entail.
If you're thinking about buying a Charlotte area home, check out our Spring 2017 Buyer's Guide to "Things To Consider When Buying A Home."
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