The Times They Are – What?
Many analysts and commentators throughout the Charlotte real estate industry have half-joked that we’re stuck in Groundhog Day. Like Bill Murray’s Scrooge-like character, buyers and their agents wake up every morning to the same news: Inventory down, prices up. It’s the same for the Charlotte area, although with a few positive trends we can add, such as continued corporate relocation to a growing, highly desirable region, and a robust economy. At current activity levels, 2021 is on its way to setting new records. The National Association of Realtors expects home sales to hit a 15-year high, with 6 million homes sold. Home prices have also topped all past records as inventory stubbornly remains at rock bottom.
Can the market continue like this? Yes and no. The consensus is that we can expect buyer demand to continue, boosted by a strong economy and low interest rates. Low inventory will continue to be a major hurdle for home buyers. However, experts foresee some much-needed moderating trends. Mortgage lenders can expect the Federal Reserve to implement a number of rate increases, which should alleviate inflation concerns. And while home sales activity should remain strong, the ongoing inventory shortage will slow the dizzying pace we’ve been seeing.
As of December 31, 2021, the average sales price grew by a whopping 20% from $291,700 to $350,000, an increase of $58,300 over last year. The number of homes available for sale dropped by 2,056 units from 5,097 to 3,041, a decrease of 40.3% over last year. We can see the continuing intensity in sales activity in the number of days homes were on the market before they sold. In December 2020, the average was 26 days, but that figure dropped to 20 in December 2021, a 23.1% fall. And as competition for homes escalates, home buyers are continuing to offer more than sellers’ asking prices.