Charlotte Region Real Estate: September 2022

Latest news on the Greater Charlotte region’s real estate market in Setpember 2022 and what it means for you…

 

September 2022 home sales were down year-over-year for a ninth consecutive month. Pending sales were also down year-over-year for a ninth consecutive month. Higher home prices coupled with higher interest rates have impacted affordability and continue to cool buyer demand. Home buyers are frustrated by higher rates, rising home prices, and economic uncertainty. As a result, home sales and mortgage applications have fallen since last year at the same time. As pending sales are a good indicator or future sales and buyer demand, we should expect fewer closed sales in the months to come. Furthermore, the fact that we also see fewer new listings coming on the market indicates Charlotte region will continue to experience inventory challenges, which impact home price appreciation.

 

 Closed sales were down 20.8% year-over-year in September. Closed sales were down by 147 homes versus August 2022. Pending sales were also down  23.4% year-over-year and month-over-month.

 

The real cost to buy a house has spiked over 55% since the start of the year and will increase even more should the Federal Reserve raise interest rates again in November. Mortgage rates topped 6% for the first time since 2008. The Charlotte region housing affordability index continues to drop and impact sales volume. Housing affordability dropped 27.7% year-over-year by 26 points. Year-to-date the housing affordability index dropped 31.3% by 31 points.

 

Despite, lower closed and pending sales, average list and sale prices increased in September 2022, year-over-year. Average list prices also increased month-over-month, but declined month-over-month. Median sale price also increased year-over-year, but declined month-over-month. The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices. 

 

Pricing a home correctly is key for sellers, as the “right” price brings buyers and fewer days on market. In September 2022, the Charlotte region saw a 153% increase year-over-year in price reductions since the market began its shift and cooling.

 

Housing inventory increased for a fourth consecutive month in September 2022. Inventory is up 32.5% compared to the same time last year and the months supply of housing is up from 1.1 months to 1.6 months year-over-year. Month-over-month, the months supply of inventory was up by 0.1 months. Month-over-month, inventory increased by 366 homes. Continued increases in inventory should help cool price appreciation. Nonetheless, the 1.6 months supply of homes keeps Charlotte region in “seller territory.” We need four months of inventory to consider it a “balanced” market, much less a buyer’s market, which would need six months of supply.

 

While housing inventory has increased, new listing activity decreased 15.8% in September 2022 compared with September 2021 and is down 5.8% year-to-date compared with the same time frame one year ago. Month-over-month, Charlotte region saw 499 fewer new listings.

 

Averaging 22 days on market, homes continued to sell relatively quickly, increasing by six days year-over-year and by thee days month-over-month. Year-to-date days on market were flat compared with September 2021. With homes being purchased quickly and new listings down, increases in inventory will do little to alleviate the inventory shortage in the short term. Longer term, with buyer activity slowing because of rising rates and prices, should sellers continue to list, inventory will slowly increase and prices should also start to settle.

 

With a list to sale price ratio of 97.2% in September 2022 (down 3.8% year-over-year and down 1.3% month-over-month), buyers are carefully scrutinizing listing prices and are beginning to see more opportunities to negotiate on price.  Year-to-date, the list to sale price ratio declined 0.2% in September 2022.

 

Moving forward into the fall selling season, lack of adequate inventory to satisfy buyer demand coupled with increasing interest rates and home price increases reducing affordability are what will hold the market back in terms of sales momentum. While buyers are frustrated by rising interest rates, rising home prices, thin inventory, and inflation, it’s not unreasonable to assume that serious buyers continue to actively look for homes. Buyer foot traffic through listed homes is steady. Buyers are motivated to act sooner rather than later because of rising mortgage rates and rising rents which continue to outpace monthly mortgage payments.

 

There seems to be lots of talk about a market crash. However, the affordability issues the Charlotte Region market is facing do not point to a housing bubble or market collapse. Housing bubble are a result of speculation and not of rising buyer demand. Speculation is not driving Charlotte area housing demand. Historically, there has not been sufficient housing built in the Charlotte region to keep up with the demand we’ve seen over the past years and the population growth in the region.

 

 

Charlotte Region Real Estate Snapshot: September 2022 

• Closed Sales: down 20.8% year-over-year; down 9.8% year-to-date.
• Homes Sold: 4,246 in September 2022 versus 5,363 in September 2021; 40,096 year-to-date versus 44,475 for the same time period one year ago.
• Pending Sales: down 23.4% year-over-year; down 14.9% year-to-date.
• New Listings: down 15.8% year-over-year; down 5.8% year-to-date.
• Inventory of Homes: up 32.5% year-over-year to 7,104 compared with 5,363 in September 2021.
• Months Supply of Homes:  up 45.5% with 1.6 months supply of homes compared with 1.1 months in September 2021. 
• Days on Market Until Sale: 22 days in September 2022 versus 16 days in September 2021. Year-to-date, days on market were flat at 19 days in both September 2022 and September 2021.
• Average Sale Price: up 16.1% year-over-year to $449,927. Year-to-date, average sale prices are up 16.3% to $444,267 year-over-year.
• Median Sale Price: up 13.4% year-over-year to $380,000. Year-to-date, median sale prices are up 18.7% to $379,895 year-over-year.
• % of Original List Price Received: 97.2%, decreasing 3.8% year-over-year. Year-to-date, the percent of original list price received is 100.8%, down 0.2% year-over-year.
• Housing Affordability Index: down 27.7% year-over-year to 68 from 94; year-to-date, down 31.3% to 68 from 99.

 

Want to know what this would mean for your family if you decide to buy or sell a Charlotte region home?

 

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This Charlotte region housing market update for September 2022 is provided  by  Nina Hollander and Carolinas Realty Partners with Coldwell Banker Realty, Greater Charlotte area residential real estate experts serving Charlotte region home buyers and sellers for 22+ years.

 

If you’re considering selling or purchasing a home in the Charlotte region, I’d love an opportunity to earn your business, to exceed your expectations, and to show you why experience matters and how:

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