Why Charlotte Housing Inventory Remains Stubbornly Low
Why does Charlotte have one of the worst housing supply shortages in the country? The short answer is low supply and heavy demand. Lee Allen, the president of Charlotte’s Canopy Realtor Association notes that while demand for Charlotte real estate remains high, local builders simply cannot keep up. As Allen puts it, “As a result, we are a million and a half homes short of inventory to meet with the buyer demand.”
That’s the reality, despite many factors at play that tend to cool down the market. The Federal Reserve has boosted interest rates. Freddie Mac reports that the current rate on a 30-year mortgage remains above 6.5%, the highest in twenty years. However, not only do higher rates pressure many potential buyers to hold off on making an offer on a home, it also forces many present owners to stay put in homes with low mortgage rates, thereby intensifying the home inventory shortage. The result is that buyers are competing with each other for limited resources.
The bottom line is that the seller’s market is still very much with us. While it’s cooled somewhat in the last few months, it remains a hot market tilted firmly toward sellers. A balanced home market has a 6-month supply of homes, but the Charlotte area has only a 1.5 months’ supply.
The latest numbers indicate these conditions aren’t changing any time soon. As of August 31, the inventory of homes for sale fell from last August’s 7,307 units to 5,309, a decrease of 1,998 homes, or 27.3%. The median sales price in August, 2022 was $389,900; this has dropped by $2,990, or .8%, to $386,910. The number of days on market until sale, a reliable indicator of whether a market is cooling or heating, shows the Charlotte market is cooling. That figure stood at 19 last year, and is now at 29, an increase of 10 days, or 52.6%.