A Shrinking Pool Of Buyers
Potential homebuyers can’t help but notice that the number of their competitors for Charlotte homes is shrinking. This is evident in a number of trends, including fewer Google searches for homes for sale, a decreasing number of requests for home tours, a drop in the number of new mortgage applications, and the Redfin Homebuyer Demand Index, which tracks the number of requests for home-buying services from Redfin agents, fell by 7%.
The result is a gradual cooling down of buying activity, which in the long term is expected to exert a moderating pressure on home prices. With mortgage rates in the Charlotte area at their highest level since 2011, it’s no surprise the number of mortgage applications has fallen by 70% from last year. However, it’s unrealistic to expect these trends to reverse long-standing issues with inventory and price, as buyers push for quick closings to lock in more favorable rates.
As of April 30, the median sales price in the greater Charlotte region grew by a whopping 20.6% from $315,000 to $380,000, an increase of $65,000 over last year. The number of homes available for sale dropped by 1,083 units from 4,251 to 3,168, a decrease of 25.5% from 2021. We can see the continuing intensity in sales activity in the number of days homes were on the market before they sold. In April 2021, the average was 21 days, but that figure has dropped to 16, a 23.8% fall. And as competition for homes escalates, home buyers are continuing to offer more than sellers’ asking prices.
Buyers are already adjusting their behavior. Many now opt to offset rising home prices by leaving larger, more expensive cities for smaller communities offering a lower cost of living.