Charlotte home prices rising as housing supply continues to shrink
A key measure of the sales prices for homes saw its largest jump this year, as Charlotte's real estate market continues to struggle with a shortage of homes and rising demand.
The median sales price for homes in the Charlotte region rose by 10.4% in July from the year before, to $265,000, according to data released Thursday from Carolina Multiple Listing Services.
Prices are rising because there aren't enough homes for sale to keep up with the demand, said Brenda Hayden, president of the Charlotte Regional Realtor Association and CarolinaMLS.
Inventory fell by 15% compared to last July, giving the region around 2.3 months of supply. Experts say that an area should have about a six-month supply of homes to have a balanced market.
"Builders are trying to give us some additional supply, but the demand is outpacing what we can fulfill right now on the supply side," Hayden said.
A recent UNC Charlotte study found that while the city's population has grown by about 2% per year since 2007, the number of housing units has increased by just 1.3%.
Though it's normally a busy time for home buying, year-over-year sales fell 1.3% in July.
Hayden said there's some good news for buyers: last month, the Federal Reserve cut interest rates for the first time in a decade. That could mean lower borrowing costs for consumers.
"A lower interest rate will definitely give folks a little bit more purchasing power," Hayden said.
Still, the 30-year-mortgage rate is already near its lowest level in three years.
Even as Charlotte struggles with sluggish sales, some of the surrounding counties are seeing a boost.
Year-over-year sales rose 9% in York County, S.C., 6% in Gaston County and 2.9% in Iredell County.
Hayden said the high prices are driving many buyers out into suburban counties. "If you're not finding what you need in your price point where you are, then naturally you're gonna look outside (the city)," she said.