Charlotte’s Red Hot Real Estate Market is Starting to Cool

The Charlotte real estate market is beginning to squeeze buyers out, as rising home prices and a low home inventory have left many looking elsewhere. As a result of fast rising prices and a low inventory, home sales dropped by 17% between June 2017 and this year.

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The supply of homes decreased by 20.7% between June of last year and this year. To put this in better perspective, the inventory of homes on the market has dropped by half of what was available at the same period in 2012.

Despite low mortgage rates, an affordable standard of living, and a robust economy, the real estate market in Charlotte is being squeezed thin. Buyers remain eager to snatch up any available homes. The time that homes sat on the market in June was 36 days on average a full week shorter than average in June of last year.

The median price of homes for sale in Charlotte on Redfin sits around $318k and data from the Carolina Multiple Listing Service has shown an annual rise of home prices by 6% in the Charlotte area.

With any seller’s market, there’s going to be an equal and opposite reaction when demand greatly outnumbers supply. Strangely enough, many homeowners are actually scared that if they put their home on the market, they won’t be able to afford a home of ordinarily equal value. This has forced many people in Charlotte to hold onto their existing homes rather then sell, further exacerbating the problem.

Of course, this hasn’t stopped home sales from occurring, but buyers are slowly moving away from Charlotte city limits as the data shows.

As more millennials enter the real estate market, Charlotte will remain a hot ticket. In fact, it was ranked the best city for millenials just last year by Business Insider. As Charlotte's economy continues to grow, the city’s ability to keep up with its inventory crises will need to be addressed.

Until new homes can be built to match the low inventory of homes on the market, prices will continue to rise and buyers will look elsewhere. The end result will be uncertain, but hopefully the city will handle it better than San Francisco and other cities with massive housing shortages.

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