The inventory of homes for sale in the Charlotte area slipped once again in October, hitting a new low equal to a 3.6-month supply. According to the Charlotte Regional Realtor Association, supply fell from 3.7 months in September after having been at 3.9 months for most of this year.
A six-month supply of homes on the market is considered to be balanced, where neither buyer nor seller has the upper hand in negotiations.
Several factors can cause low inventory, including prospective sellers waiting for prices to rise sufficiently to recoup equity lost during the housing crisis. Low interest rates make refinancing existing mortgages attractive, while stagnant real wages and student loan debt have made it more difficult to save for a down payment on a new home.
CRRA President Maren Brisson-Kuester says the lack of supply in the Charlotte area should turn around as sellers regain confidence. The low amount of homes on the market is boosting prices, she said, which in turn will encourage more homeowners to put their residences up for sale.
The CRRA says the average sales price in October was up 4.4 percent, to $237,646, from October 2014 and the median sales price increased 3.9 percent in the same period, to $185,000.
The average list price last month was $272,914, up 5.1 percent from $259,548 a year earlier.
Brisson-Kuester also expects an interest rate hike, likely early next year, will boost inventory.
“We are going to be crazy in March and April,” she said. “Sellers will come out in droves.”
Purchases, meanwhile, fell in October. Home sales fell 3.9 percent to 3,073 transactions last month from 3,198 a year earlier. Sales fell 10.6 percent from September, when 3,436 properties were sold.
Brisson-Kuester says the drop in sales is “not alarming,” and was caused by inclement weather that kept prospective buyers from looking and a traditional slowdown that occurs toward the end of each year. Sales were stronger in October 2014, she said, because there was more pent-up buyer demand and widespread fears that the Federal Reserve would raise interest rates, making mortgages more expensive.
“Now there are more methodical buyers waiting for the right house,” she said. “There’s no panic purchasing.”
Preliminary pending sales, meanwhile, rose substantially over the year to 3,562 last month. That’s up 21 percent from October 2014, when there were 2,940 pending contracts.
The average number of days a property was on the market from the time it was listed until it closed was 112 days in October compared with 122 days a year ago.