Prospective homebuyers are confronting rising prices as competition heats up for the Charlotte area’s dwindling inventory. The supply of homes in the 12-county region has been in a 3.9-month slump for three consecutive months, according to the Charlotte Regional Realtors Association, after dropping to 4 percent in January from 4.1 percent in December.
A six-month reserve of available housing is considered balanced, as it is neither a buyer’s nor a seller’s market.
Year-over-year sales in the Charlotte area rose 14 percent in April to 3,408, up from 2,989 in April 2014. Sales grew 6.7 percent from March 2015, the CRRA says. Although new listings rose 2 percent year over year, inventory dropped 22.4 percent from April 2014, leaving 12,959 properties for sale last month.
Rising demand and a lack of supply pushed the average sales price up 8.6 percent to $241,176 in April from a year earlier. The median sales price, $190,000, grew 8.6 percent as well. Sellers received 94.9 percent of the asking price, up from 93.9 percent in April 2014.
Preliminary pending sales last month rose 40.8 percent to 4,716 from 3,350 in April of last year.
Low inventory can be caused by several factors, including stagnant real wages impinging on a prospective seller’s ability to come up with a down payment and moving expenses; a high percentage of home purchases by institutional investors who rent the properties; underwater homeowners who bought at the height of the real estate boom waiting for prices to rise sufficiently to recoup their lost equity; a lack of affordable new-home construction for prospective sellers to move into; and more stringent underwriting standards for obtaining a mortgage.
Demand, meanwhile, increases as Charlotte’s rebounding employment market lures migrants from other states. The Charlotte region is expected to be one of the nation’s fastest-growing areas over the next couple of decades.
In addition, while local home prices have been rising, they are still much more moderate than in other parts of the country. The Charlotte-area market also has been much more stable than cities such as Las Vegas, Phoenix, and Miami, where housing prices rose exorbitantly before collapsing in 2008.
“Demand across the CarolinaMLS region is exceeding supply, resulting in the steady price increases the market is experiencing,” said Maren Brisson-Kuester, president of the CRRA and the Carolina Multiple Listing Services Inc. “This should subside if we get more listings to equalize the market, but otherwise it could challenge future affordability. For now though, housing remains affordable across the region.”
The average number of days a house in the Charlotte area was up for sale from list to close was 127 days last month, down from 137 a year ago. The average number of days on the market, which includes properties that are active and under contract but being shown, was 72. That’s 28 fewer days than a year ago.