CHARLOTTE REGION REAL ESTATE REPORT: AUGUST 2023
WHAT YOU NEED TO KNOW...
WHAT IT MEANS FOR YOU...
Inventory Down | New Listings Down | Sales Down | Prices Up
August 2023 home sales declined in the 16-County Charlotte Region year-over-year, as did pending sales. Sales are happening, but not at the volumes experienced in 2021 and the first half of 2022. By the same token, closings increased month-over-month from July and contract activity remained steady. Although home buyers remain frustrated by fluctuating rates, lack of new inventory, rising home prices, and economic uncertainty it does appear that buyers are adjusting to the higher interest rate environment.
The Charlotte market has stopped seeing large fluctuations in sales and prices, which indicates the market is slowly moving towards stabilization.
Seller activity increased in August compared with the prior month of July. Although new listing activity has consistently been lower than in previous years, the year-over-year drop in August was not as steep as in previous months. The good news for buyers is that new listings increased nearly 9% in August over July.
Charlotte region's inventory declined in August by 27% compared with August 2022, while the months supply of homes declined 6.3% year-over-year to 1.5 months. This would indicate that the Charlotte region remains a seller's market and that demand in August increased relative to supply.
HOUSING MARKET OVERVIEW FOR CHARLOTTE REGION:
AUGUST 2023 VS AUGUST 2022
Closed sales declined 14.8% (by 675 homes) year-over-year in August. Compared with July 2023, closed sales increased by 408 homes. Pending sales also declined 9.2% year-over-year. Month-over-month pending sales declined by 49 properties.
The real cost to buy a house has increased significantly since 2022, as the Federal Reserve continued to increase rates. Since May 2023, the average 30-year fixed rate mortgage has remained above 6.5% and hit a two-decade high in August, impacting affordability. The Charlotte region housing affordability index continues to drop and impact sales volume. Housing affordability dropped 15.4% year-over-year in August 2023.
Year-over-year average list and sale prices increased modestly in August 2023 and year-to-date. Home prices continue to increase, but at a slower pace. Median sale price declined 0.8% year-over-year and is down 0.5% year-to-date versus August 2022. (The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices.) The median sale price drop year-over-year does not mean that home prices are falling. Rather it indicates that sale prices are moving towards stabilization.
Inventory declined 27.3% in August compared to the same time last year. In August 2023 there were 1,198 fewer properties for sale than one year ago. Month-over-month, the number of properties for sale also decreased.
The months supply of housing decreased 6.3% from 1.6 months to 1.5 months year-over-year. Month-over-month, the months supply of inventory increased by 0.1 months. The 1.5 months supply of homes keeps Charlotte region in “seller territory.” However, sellers don’t have the same strong position they had in previous years. Pricing key to attracting buyers and selling quickly. Although Charlotte Region is still technically a seller’s market, the days of receiving significant amounts over asking price are behind us and sellers need to reset their expectations, as well as ensure their homes are in good condition and show well.
New listing activity decreased 12.3% in August 2023 compared with August 2022, with 641 fewer properties listed. Month-over-month, Charlotte region saw an increase of 367 listings come on market.
Averaging 29 days on market, the days on market increased 52.6% by 10 days year-over-year. Days on market were flat compared with the previous months of July and June. Pricing a home correctly remains critical for sellers, as the “right” price brings buyers and results in fewer days on market.
With a list to sale price ratio of 98.1% in August 2023 (down 0.4% year-over-year and down 0.2% month-over-month), buyers are carefully scrutinizing listing prices and sellers are not in as strong of a position as they were during the pandemic years.
Moving forward into the fall selling season, both sellers and buyers will most likely continue to be distracted by growing economic concerns, higher interest rates, and negative housing headlines. The slowdown in home sales that began when mortgage rates increased in 2022 is expected to continue in the coming months. The costs to purchase a home will remain high, challenging affordability at a time when overall budgets continue to be squeezed by inflation. Buying power will remain on the decline with higher mortgage rates, pricing many first-time and workforce buyers out of the market.
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This Charlotte, NC region housing market update for August 2023 is provided by Nina Hollander with Coldwell Banker, Greater Charlotte residential real estate expert. I've been opening doors for Charlotte area home buyers and sellers for 24+ years. Let me open the door to your next home... you'll be glad you did!
If you're considering selling or purchasing a home in the Greater Charlotte area, I'd love an opportunity to earn your business, to exceed your expectations, and to show you why experience matters and how the right broker makes all the difference!
For more details, read the original report at www.GreatHomesInCharlotte.com
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