Changing Buyer Behavior
Home buyers must face many obstacles these days. Supply chain issues, rising cost of living expenses, and steadily decreasing inventory only add to the challenge of landing a home –which has never been easy. But like any other competitive endeavor in a changing landscape, the smart players know how to adapt and win. The good news is: it can be done.
Let’s look at the issues confronting home buyers. Shortages in building materials and labor continue to drive prices up. While the US Census Bureau reports that housing starts are up by 22.3% from last year, the impact won’t be felt for many months. And with pent-up demand being so great, that amount of new home activity may not afford any relief. Nationwide, consumers face rising inflation and mortgage interest rates, which are presently at 4.6%, a rise of 1.4% since January.
These trends are rapidly changing the home buying experience. Odeta Kushi, a deputy economist at First American Financial, writes that a year ago, 31% of new homes were below $300,000. Today, that figure has dropped to 18%. And George Ratiu at Realtor.com points out that the average buyer of a moderately priced home is paying $300 more per month than they did a year ago.
But as we said earlier, smart buyers are adapting. They’re changing their criteria, selecting homes offering shorter commute times, and focusing on larger homes in smaller markets. Buyers looking for Charlotte homes are discovering the smaller towns surrounding Charlotte. In this post-pandemic world, working from home offers a way to cut expenses and improve one’s quality of life.
As of March 31, 2022, the median sales price of a home in the greater Charlotte region rose by $62,486 to $369,236, an increase of 20.4% from last March. Plummeting home inventory remains the biggest obstacle to new home buyers. The latest figures show that the number of homes on the market dropped by 1,557 to a sadly inadequate total of 2,455 homes. That’s a drop of 38.8% from the previous year. Clearly, determined buyers are marching ahead, lowering the number of days homes are remaining on the market until closing. That figure dropped by 5 days compared to March, 2021 to a total of 20 days, a decrease of 20%.