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Charlotte residential real estate market takes off in the second half of 2019; we explain why

The number of Charlotte home sales increased 3.7% in the first 11 months of 2019 (or by nearly 700 closings) compared to 2018. The real story however was that the market gained strength in the second half of the year even as fewer homes for sale were added to the market. Home sales increased just 1.5% in the first six months of the year compared to the first six months of 2018, but rose 8.7% from July to November. The market shift coincided with announcements by SunTrust and BB&T to merge and move the headquarters of the combined companies to Charlotte (June 12) and Lowe’s announcement that it was relocating its tech hub to South End (June 27).

Another anomaly for Charlotte’s real estate market in 2019 was that it bucked the trend of most U.S. cities which saw housing inventory increase from the previous year. Five hundred and fifty more homes for sale in Charlotte hit the market in 2019 but the city’s inventory of available houses still fell 5.7%. Charlotte home buyers essentially absorbed every new listing that came on the market in 2019 plus another 333 that were already on the market (total absorption rate of 106%). It wasn’t surprising considering Charlotte is among the hottest growth cities in the country with and estimated 44,000+ new residents added in 2019. Sufficient housing inventory continues to be the thing that keeps Realtors up at night. Charlotte had just a four​ months’ supply of inventory at the endof 2019. The National Association of Realtors says a housing market in balance between supply and demand should have a six months’ supply of homes on the market.

As housing inventory declined, there was increased upward pressure on home prices. For the year, the average home sales price in the Charlotte MSA rose 6.9% in 2019 to $270,000. Still, the average home sales price is just 27.5% more than it was in 2008 or an average annual increase of 2.5%.

How can Charlotte’s housing inventory grow to meet current and future growth in demand? The area desperately needs more single family new construction but permits are expected to finish the year down 3%. More investor flips in up-and-coming neighborhoods would also help since few first time home buyers aren’t comfortable with taking on renovations. In a December article in the Charlotte Business Journal, the city was named the four most active city for investor buyers of residential homes and with 7% of Mecklenburg County’s homes currently unoccupied, opportunities abound.

Best wishes to all in 2020! Let us help you make the best real estate decisions in the new year….Contact a Carver Pressley broker today!​

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