The real estate market hit historic lows in inventory in September while prices drove higher. This is not surprising as the trend has been headed that way for the last few years, but the news is not all grim. New listings are actually up year over year, they just can’t keep pace with the demand for new homes.
The data comes from the Canopy Realtor Association monthly reporting. They use numbers from the Canopy MLS which houses data for the Charlotte Metro Region as well as surrounding counties. The counties include Alexander, Anson, Cabarrus, Catawba, Cleveland, Gaston, Iredell, Lincoln, Mecklenburg, Rowan, Stanly, and Union counties in North Carolina. Due to proximity to South Carolina, four counties are also included and are Chester, Chesterfield, Lancaster, and York. The numbers do not include homes sold by owners in private sales unless they used a service to get their home on the MLS.
When you look at the Charlotte Region as a whole, you see that inventory is just at a 1.1 month supply or 5,095 homes. This is down from a 2.5 month supply, or 10,467 homes last September. A balanced market between buyers and sellers is typically considered to be a 4-6 month supply. This means that right now is a seller’s market meaning that buyers typically have less power in a real estate transaction. The lack of inventory and speed at which homes are selling can mean multiple offers on listings, and homes selling above asking price. If a home does not appraise at the higher value, that can mean a buyer bringing cash to the closing table to cover the difference between appraised value and the sale price as a bank will only make a loan for the appraised amount.
While this is great news for sellers of homes, buyers are feeling the pinch. There is the bright spot of historically low interest rates so buyers are not totally without hope. Homes are selling for an average of 16% more than last year. This can mean that buyers can afford less of a home than they could a year ago. Considering the trend during Covid that buyers want larger homes with more space, it can mean that those buyers have dropped out of the market for now. They may be staying in their homes further reducing homes for sale. It may also mean that many buyers are staying in rental properties longer as they save up to purchase a home.
Year to date, sales are up slightly over last year, just 1.6%, but that means that the market is holding steady during the pandemic. It also means that the market has recovered from the early parts of the year when we saw a distinct slump in the beginning of the pandemic. The market has fully recovered from the lack of the spring real estate season. At Lake Norman and Lake Wylie, numbers look even better as demand for homes near recreation is surging.