(This article is from brokers' mother company SPEEK. Navigate their website for more information on how they are shaping the future of real estate brokerage.)
Real estate markets across the United States have had a reoccurring theme: high prices & low supply. This deadly combination has been the headline of many news articles for over a year now. Charlotte is no different. In June we saw an 18.4% increase in median sale price in comparison to June 2020. A 56.3% drop in months supply of homes too. These numbers only speak towards a small piece of the story - let’s unpack some of our most common questions.
Are home prices going to continue to rise?
The short answer: yes. However, as our market normalizes we are going to see a slowing down in the appreciation of homes. Freddie Mac, Lawrence Yun (chief economist of the National Association of REALTORS), and Zillow all believe that we will still see growth in 2022. Freddie Mac & Yun are predicting single-digit appreciation and Zillow is predicting an impressive 11.8% appreciation in 2022.
Will it still be so competitive to buy? The short answer: no. The competitive nature of our market is driven by two large factors: low mortgage rates and the low supply. More people are looking at the same houses because there are fewer options and even more want to take advantage of the low interest. The first indicator it will become less competitive is the fact that interest rates will rise. Predictions range from 3.2% to 4.25% by the end of 2021. (Image from FRED)
Not surprising since we have been in a historically low range for months. Speaking of historic lows: supply. Charlotte bottomed out at .7 months supply in June. The “typical” supply is around 6 months. Supply has nowhere to go but up. Which would increase our days on market and lower the competitive nature. However, the market has done stranger things.
Should I capitalize on the market now, or wait? If you could predict the market I would hope you would be sitting on your private island drinking something tropical instead of reading this blog. However, we cannot. Whether you should buy or sell now depends on what you prioritize. It is easy to sell, record prices in record times, however, it is difficult to buy. There are plenty that live by “better the devil you know than the devil you don't” and want to capitalize on the low interests rates and low supply now, however, some are willing to roll the dice and see what happens. There is no right or wrong answer when it comes to what to do, just a long list of pro's and con's depending on which you choose.
Are you interested in learning more about the Charlotte market? Download our most recent market report on the Charlotte Metro area here.