Charlotte-area home prices reached a new high in March, according to the Standard & Poor’s/Case-Shiller home price index released Tuesday.
The index for homes in the Charlotte Metropolitan Statistical Area climbed to 136.93 from 135.75 in February and 131.24 in March 2015, equaling increases of 0.3 percent monthly and 4.3 percent year over year. The index has a base value of 100 in January 2000, meaning homes in the Charlotte area have appreciated 36.93 percent since then.
“We’re seeing a healthy appreciation annually, 4 to 5 percent every year,” said Maren Brisson-Kuester, president of the Charlotte Regional Realtor Association. “It’s what we expect to see in a trend in a healthy market overall.”
The Charlotte-area index reached its previous high of 135.88 in August 2007, at the height of housing bubble. It reached its subsequent low of 108.39 in January 2012.
Nationally, home prices kept climbing in March as the spring home buying season began, but so far the higher costs haven’t thwarted sales.
The S&P/Case-Shiller 20-city home price index increased 5.4 percent in March compared with a year earlier. That is the same annual gain as in February.
Solid job growth, modest increases in wages and salaries, and low mortgage rates are fueling Americans’ willingness to buy homes. Yet there is also a limited supply of homes on the market, which pushes up prices.
Brisson-Kuester said the demand for houses in the Charlotte region has grown with its job creation and inmigration, and because supply is low, prices have continued to rise at a steady and solid pace.
“A lot of people are moving here, and that helps,” she said. “It’s not just a normal market appreciation, but (the region) is increasing in visibility across the nation and internationally, and Charlotte is seen as more of a desirable place to live.”
While the region has experienced record-low inventories of homes for sale for more than a year, the number of available homes rose 3.6 percent in April from March. But inventory was down 26.6 percent year over year, to 10,513 properties for sale – a little more than half of the most recent high of 20,500 in October 2011. The April figure equated to a 2.9-months’ supply; a six month supply is considered to be a market in equilibrium.
David Blitzer, chairman of the S&P index committee, said the number of homes on the market nationally is equal to less than 2 percent of U.S. households, the lowest percentage since the mid-1980s.
The number of available homes fell 3.6 percent in April, according to the National Association of Realtors.
“It remains a tough home buying season for buyers, with little inventory available among lower-priced homes,” said Svenja Gudell, chief economist at real estate data firm Zillow. “The competition is locking out some first-time buyers, who instead are paying record-high rents.”
Even so, sales of existing homes nationally rose 1.7 percent in April, the second straight increase, to an annual rate of 5.45 million. In the Charlotte region, sales in April were up 11 percent over March and 3.1 percent year over year.
Portland, Seattle and Denver saw the highest yearly gains. Prices rose 12.3 percent in Portland, 10.8 percent in Seattle, and 10 percent in Denver. All three cities feature burgeoning technology sectors and strong job gains.
Prices rose in all 20 cities, but at a slower pace in the Northeast and Midwest. The cities with the smallest year-over-year increases were Washington, D.C., Chicago, New York, Cleveland and Minneapolis. Those were the only cities with smaller annual price growth than Charlotte, which tied Boston for 14th place among the 20 cities.
A revived housing market is helping fuel faster economic growth. Sales of new homes jumped to their highest level in eight years in April, and home construction has also increased.
The economy is picking up after a dismal start to the year. Americans stepped up their spending in April at the fastest pace in six years, the government said Tuesday. The Federal Reserve Bank of Atlanta now expects growth to reach 2.9 percent at an annual rate in the April-June quarter, up from just 0.8 percent in the first three months of the year.
Mortgage rates remain at historical lows: A 30-year fixed rate mortgage averaged just 3.64 percent last week.
Brisson-Kuester said she thinks the Charlotte market will “stay as steady as the economy,” with smaller increases in appreciation as the inventory of homes for sale rises slowly.
Brisson-Kuester also said that presidential election years often bring market volatility, and that she is “encouraged by how stable our market has stayed through a campaign year. It hasn’t been that volatile for us yet. Or for lending. That’s going to be interesting to watch, how that impacts us.”
AP economics writer Christopher S. Rugaber contributed to this report