If you're trying to buy a house in Charlotte, buckle up for a rough ride: The inventory shortages and high prices that have plagued buyers for months got worse in July.
According to data released Friday by the Carolina Multiple Listing Services, the average home sales price in July rose 5.1%, to $290,486, compared to the same month last year. The number of homes sold fell almost 3% in the Charlotte region, a blow to the real estate industry during its busiest time.
"Without a doubt, limited inventory continues to pressure prices across the region, while also effectively slowing sales during what's typically our prime selling season," said Jason Gentry, president of the Charlotte Regional Realtor Association. "Demand and pending contract activity remain strong, which means buyers must move quickly to purchase the home they want."
Charlotte is being impacted by the same dynamics that are dragging down home sales nationwide. Homebuilding, which fell off dramatically after the Great Recession, hasn't rebounded enough to keep pace with demand, limiting the supply of available houses and pushing up prices.
Across the U.S., existing home sales are down 2.2% for first half of the year, the National Association of Realtors said last month. Lawrence Yun, the group's chief economist, blamed "the severe housing shortage that is not releasing its grip on the nation's housing market."
"What is for sale in most areas is going under contract very fast and in many cases, has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales," said Yun.
In Charlotte, the number of houses for sale in July is down 16% from last year. Inventory is down even more dramatically from July 2012, when there were more than 18,000 houses available.
Now, there's barely half that amount.
The crunch has been most severe at the lower end of the market, where the inventory of starter homes has fallen by roughly half.
Another side effect of the lower inventory: Houses are selling fast. In July 2012, houses spent an average of 109 days on the market. By last year, that had fallen to 40 days. Last month, it dropped to 36 days.
All of those factors — rising prices, a smaller selection and a fast-moving market with fierce competition — are hurting sales during what would otherwise be a healthy market, with low unemployment and strong local population growth. The number of homes sold through July is down 1% from last year.
The market is even tighter inside Charlotte city limits, where the average July price jumped more than 8%, to $308,713. The supply of homes for sale within city limits fell more than 9%, and houses sold in an average of just over three weeks.
