For many months in a row, the Charlotte real estate market has been left with a lack of inventory. This shortage has caused many home buying woes for buyers and is leaving sellers worried as they become buyers. Charlotte was just named a hot housing market for 2018 by Realtor.com which will likely increase concerns and competition for homes. This can cause buyers and sellers to feel like they are stuck in their current homes with no way to move on and up to a new home.
This situation is not unique. Many markets around the country should be booming in this current economy, but with such low supply, sellers are reluctant to sell because they can’t find comparable homes in their price range. This leads to the vicious cycle that is keeping inventory low. Americans are spending longer than ever in their homes. The median length of time homeowners are staying in their homes has risen to 10 years. This is well above the six to eight years which was the historical average before the housing crash.
Prices are also on the rise, in fact it was just reported by S&P CoreLogic Case-Shiller index that home prices in Charlotte were up 6.2% for the year. This puts a pinch on first-time buyers and puts home ownership out of reach for many who have student debt. The percentage of first-time home buyers is near an all time low at 34%.
It appears to be a toxic combination. There are fewer homes on the market, people taking longer to move, rising prices, and higher student loan debt. The obvious solution is for builders to build more homes, but builders are not back to the pace of building from before the recession. Last year there were less than 4,000 single-family building permits issued. This is less than half the number issued in 2006.
It remains to be seen when the market will begin to correct itself. Either prices will need to come down or supply must go up because the demand is there.
If you are interested in purchasing a home in the Charlotte area, give us a call at (704) 525-4045. You can view current listings and create customized searches on our website here.