Oct. 14, 2022
Kim Walker, 704-940-3149
CHARLOTTE, N.C. — Housing market conditions across the Charlotte region, continued to weaken in September, falling nearly 21 percent when compared to last year, as 4,246 homes sold. This time last year when the market was flush with buyers, there were a little over 5,300 homes sold across the 16-county region. The FED’s focus on lowering inflation by increasing interest rates, has resulted in mortgage rates rising into 6% territory, which continues to sideline buyers. Sales were down 3.3 percent when compared to the previous month (August), a further sign of weakness. Housing statistics included in this report are completed transactions that include single-family and condo/townhomes only, according to data from Canopy MLS.
Pending sales declined 23.4 percent year-over year as 3,845 homes went under contract in September compared to 5,017 that were under contract during the same period last year. Buyers have continued to shy away from the market, in the face of rapidly rising mortgage rates. Month-over-month contract activity is down 16.5 percent compared to August 2022, which means sales over the next few months will continue to be weak. Showing activity however continues to signal steady foot-traffic and buyer interest, as listings in the Charlotte MSA averaged 7.1 showings (or buyers) per listing in September.
New listings decreased in September, falling 15.8 percent year-over-year as sellers listed 4,676 homes for sale compared to 5,553 listed in September 2021. This is the third month of decline in seller confidence. Seller confidence, as displayed by new listings rose briefly in May and June 2022, helping to boost inventory and supply. The region needs to see consistent listing activity in order to ease inventory challenges. Inventory rose in September, increasing 32.5 percent year-over-year with 7,104 homes for sale at report time, which is 1.6 months of supply. Months of supply has increased 45.5 percent from 1.1 months in September 2021, to 1.6 months this past month (September 2022). September represents the fourth consecutive month of year-over-year increases in both inventory and supply. Subtle changes in supply will help to cool price appreciation over time.
“Contract activity has been down this year, but the steady foot traffic we’re seeing indicates buyers are still in the market for homes. The sharp rise in interest rates have dampened sales but rates are still historically low.” said Lee Allen, Canopy Realtor® Association/Canopy MLS president. “Current mortgage rates are nearly aligned with the 30-year fixed rates we experienced during the boom years of 2007 and 2008. We are seeing many lenders offering strategies and programs, like 2-1 Buydown, to help buyers with rates. Your local Realtor® is the best resource for buyers and sellers as we navigate this ever-changing market.”
According to Investopedia, there are several potential benefits for homebuyers with a 2-1 buydown. For one thing, it can help them afford a larger mortgage and a more expensive home than they might otherwise qualify for. For another, it buys them some time before their mortgage payments rise to the full amount, which can be helpful if their income is also rising from year to year. This is just one strategy to discuss with a Realtor®.
Prices however continued to rise in September, as both the median sales price ($380,000) and the average sales price ($449,927) rose 13.4 percent and 16.1 percent year-over-year respectively, while the average list price rose 16.6 percent to $472,651. This brought the original list price received to sales price ratio to 97.2 percent. This metric continues to slowly fall and is down 3.8 percent when compared to September 2021. It was as high as 102.8 percent in May 2022, but has steadily fallen since. This time last year it was 101 percent as sellers received more than asking prices for their homes. Canopy MLS reported that price reductions on active listings have started to increase, which means that buyers could be experiencing some leverage in the market.
Homes that are priced well and down to the local level, tend to attract more buyers while spending less time on market, however a look at the number of price reductions in September on listed properties across the Charlotte MSA, continues to show a significant increase, 153 percent year-over-year, a signal that sellers may be struggling to price homes in a shifting market.
Time on market continues to increase, but still shows homes selling at a very rapid pace, leaving buyers little time for negotiation. List to close which totaled 70 days in September 2021, increased to 79 days in September 2022, while days on market, the metric that accrues for “Active” and “Under-contract-show” statuses, showed homes averaged 22 days on market until sale, which is an increase from 16 days on market in September 2021.
Canopy Realtor® Association provides monthly reports on residential real estate market activity for the Charlotte region based on data from Canopy MLS. The Charlotte region, which this report is based on, includes 12 counties in North Carolina and four counties in South Carolina.
For more residential-housing market statistics, visit www.CarolinaHome.com and click on “Market Data.” For an interview with 2022 Association/Canopy MLS President Lee Allen, Realtor®/Broker-in-charge with RE/MAX Executive, please contact Kim Walker.
Canopy Realtor® Association owns and operates Canopy MLS, the region’s primary source for accurate and timely property data in a multicounty service area including the Charlotte MSA, Asheville MSA and Catawba Valley region spanning across North Carolina and South Carolina to outside the Carolinas. Canopy MLS provides the latest technology, tools and analytics that Realtors® utilize to support consumers with their residential real estate transactions.
Original Publish Date: 9/14/2022