Finding the New Normal
The phased reopening of the national economy has been a busy time for Charlotte NC buyer’s agents. In last month’s report, we noted the pent-up demand from buyers eager to relocate. Showing activity in June grew substantially from quarantine levels, but thanks to historically low inventory levels, the challenges for home buyers and their agents will only continue. Those challenges include seller reluctance to list their homes due to economic uncertainty caused by COVID, and builders’ ongoing inability to keep up with demand. Neither of these trends shows signs of going away soon.
The latest monthly indicators reveal how deeply entrenched these trends are. As of June 30, the number of months supply of homes for sale dropped by an unprecedented 50%. While the historic norm for this indicator is a 6 month supply, there’s only a 1.3 month supply for the greater Charlotte area. The inventory of Charlotte homes for sale plummeted by 4,997 units, a decrease of 46.7%. This pretty much guarantees the sellers’ market will continue for some time. However, home prices don’t seem to fully reflect these shocks to inventory – at least not yet. The percentage of the original list price received inched up only by .4%, and the median sales price notched up by $19,900, or 7.5% from June, 2019.
While we can expect employment trends and interest rates to continue to be favorable for the Charlotte real estate market, we will have to contend with unprecedented upheaval and change, both in the industry and in the overall climate. The possibility of new quarantine orders from state and local governments is only one of the uncertainties we’re facing, a variable that could further depress sales activity.