The Real Estate Market seems like a runaway train headed up a steep hill. Everyone is worried that there will be a crash at the end. When you look at the numbers from the Canopy MLS and look at commentary from industry analysts, you see that the Charlotte market doesn’t look like it will have a crash anytime soon.
The Canopy Realtor Association produces a report which shows that supply is still at an all time low, while prices are headed higher than ever, and homes that do come on the market are selling in record time. They report on 12 counties in North Carolina and 4 counties in South Carolina to comprise the Charlotte Region.
In the Charlotte Region right now, there are 3,462 homes on the market which represents just 0.7 months of inventory. This low inventory has persisted for years, and there is no end in sight as new listings are not keeping pace with demand. New listings were up 12% from June of last year, but they are still not up enough to begin to balance the market between buyers and sellers.
A balanced market is typically considered to be a 4-6 month supply of homes. This is where buyers and sellers have equal weight in contract negotiations. Right now we are in a persisting seller’s market. Sellers can demand terms that wouldn’t be possible in a buyers market. We are seeing multiple offers on homes and homes selling for over list price. The average sales price is 102% of list price right now.
We are also seeing buyers omit provisions from standard contracts to make offers more enticing for a seller. Buyers are trying all sorts of tactics to stand out in multiple offer situations including offering over list price. Sellers have seen buyers leaving out financing conditions, foregoing inspections, offering early closing dates, and offering low or no cost lease-backs of the property until the seller can find a new home. These are in addition to writing personalized letters to entice a seller.
When homes come on the market, they are lasting on average 13 days before they go under contract, down 69.8% from last June. Closing is happening in 66 days on average which is down 26.7% from last June. This means that both buyers and sellers have to be ready to move quickly which means being fully pre-qualified for a loan, or having cash on hand.
Homes are selling for more money than ever before. The average home sold for $406,176, up 21.9% from last year. The median home price landed at $335,000, up 18.4% from last June. This is great news for sellers, but buyers are feeling the pinch and it is also pinching any homeowner as taxes are going up commensurately.
New listings are up 12% from last year, but it is not enough to have a rebound in the sellers market. There have been delays in new construction and many people still staying out of the market due to Covid and the after effects of the pandemic. In fact, with prices still rising, it is keeping many buyers in the rental market until there is a correction or until there is enough supply that the multiple offer situations calm down.