High Home Prices Are The New Normal
The Charlotte real estate market has settled down compared to the maddening pace we’ve experienced the last few years. Gone are the days when sellers can expect offers tens of thousands of dollars over asking price. And the feeding frenzies for new listings, often ending hours after a home has been listed for sale, are no more.
Prices have mitigated, and supply is slightly up, but these welcome glimmerings of stability in a market long characterized by skyrocketing prices and shrinking inventory fall far short of a normal housing market. Rising interest rates and stubborn inflationary trends are scaring many potential buyers away. Concerns about a possible recession have also made buyers think twice before making the long-term financial commitment of a mortgage. And while there’s a modest resurgence in the number of new homes being built, most of the new inventory is in apartment buildings or single-family homes priced for the affluent, cutting the options for the middle class.
The latest figures for Charlotte home sales reflect the mixed messages that are still spooking many would-be buyers. As of May 31, the number of homes for sale inched up by 293 units, or 6.7% more than last year, to 4,667. The cooling off of the Charlotte market can also be seen in the number of days on market until sale, which ballooned by 142.9%, or 20 days, to a new high of 34 days compared to last May. The median sales price in the greater Charlotte area decreased by 2%, or $8,000, to $385,000.
The bottom line is that this state of affairs isn’t going away any time soon, though there are private and government efforts underway that address housing affordability. For example, Charlotte has beefed up its Housing Trust Fund with $218 million in voter-approved bonds to make homes more affordable, and the city’s new Unified Development ordinance will allow for greater density in areas that once banned or restricted multi-family homes. But growth is so robust here, and demand is so overwhelming that consumers won’t feel their effects for some time.