It has been a while since we wrote about the state of the Real Estate Market in the Charlotte area. There have been many changes in the past few months due to rise in interest rates and rise in prices. We have seen inventory rising as buyers are waiting to see what the market will do. We are also in a time of year where we are headed into the holidays so we typically see a slow down in activity.
According to the monthly report from the Canopy Realtor Association based on their Canopy Multiple Listing Service data, we are definitely seeing a slowdown. New listings are down 15.8% from last September. Pending listings are also down 23.4%. Closed sales are down 20.8%. This slowdown is expected based on higher interest rates and the rise in prices making buyers more hesitant.
If you look at prices year over year, the median home price has gone up an average of $45,000 since last September. Year to date, that number is up almost $60,000 from $320,000 to $379,895. Interest rates have risen from under 3% to over 6%. This means that for the median home in 2021 at $320,000 at 3% interest, you would have had a principal and interest payment of $1,349. That same home would cost you $379,895 today at 6% interest for a monthly principal and interest payment of $2,278. That’s $929 more each month for the exact same home.
That being said, some buyers are not deterred by high interest rates and are instead banking on being able to refinance once rates go back down. For those buyers still in the game, they are able to choose from much more inventory. Last September they would have been able to choose from 5,363 homes or a 1.1 month supply of inventory. This September they have 7,104 homes to choose from or a 1.6 month supply of inventory. Historically a 4-6 month supply of inventory was considered a balanced market between buyers and sellers. Right now, it seems that buyers have the upper hand in negotiations because of the unique situation with interest rates and inflation in combination even though there is only a 1.6 month supply of homes.
One of the major ways buyers have more power in a real estate transaction right now is with price. At the height of the seller’s market, buyers could expect to pay more than list price for a home, sometimes substantially more. Right now, the average home is selling for 97.2% of list price. This is down 3.8% from 101% last September. We are seeing fewer homes getting multiple offers so competing buyers are not fueling price hikes.
All of this is great news for buyers, but never fear sellers, you still hold a lot of cards. After all, if you stage your home well, price it right, and list it with an agent, you will still make a lot of money on your investment from when you bought it as prices are still on the rise.