Buy Now Or Wait?
Last month, we noted one of the early signs of a market correction in the Charlotte real estate market. The most significant indicator was the Federal Reserve’s increase in interest rates. This month, we can report that the housing market is continuing its much-needed cool down. Demand for housing has weakened, and more potential buyers have postponed their plans to buy, with many opting to rent. This has spurred a modest increase in home inventory.
With these mixed signals, what’s a buyer to do? In a time of transition, with contradictory trends complicating an already difficult issue, it’s a good time to exercise caution. As Mark Zandi of Moody’s Analytics observes, “It’s a particularly bad time to buy right now. If I were a buyer, I’d be waiting.” He expects house prices to flatten, though it will be a gradual process.
The latest numbers confirm it’s a good time to be cautious. As of July 31, there are 6,637 homes on the market, an increase of 1,281 units, or 23.9%, compared to July, 2021. That’s welcome news after several months of a steady drop of inventory, but that hasn’t reversed home pricing – at least not yet. The median sales price increased by $55,000 to $385,000, growing by 16.7% from last year. That’s a bit of a slowdown, considering that Charlotte saw price hikes of 20.8% this May, and 19.4% in June. Demand remains strong, as evidenced by the number of days on the market, which dropped by 1 day to 15 days, a 7.1% decrease from last year.
However, in pandemic-migration destination areas, such as Austin, Texas; Sacramento, California; and Charlotte, motivated sellers are reducing their asking price to attract buyers. Analysts don’t expect mortgage rates to change any time soon, which gives buyers time to do their homework and find the most attractive deal. Buyers with reliable incomes can take the plunge, knowing that many others will avoid committing, fearful of a possible recession.
The smart move for buyers is to seek out the expert advice of an exclusive buyer’s agent to help navigate a tricky market.