Is our local housing market overvalued and set for a huge correction? According to Fannie Mae, just 16% of consumers say NOW is a good time to buy a home.  With housing affordability conditions at the worst levels they’ve ever been & sky high mortgage rates, can we start seeing our housing market suffer? 

Many factors affect the Charlotte, North Carolina housing market, and a key driver behind its fluctuations is mortgage rates. These rates can determine buying power and affordability for many.

 In this post, we’ll explore the macro & micro trends affecting our housing market. We will review the most up-to-date local statistics, mortgage rates, the federal reserve, and some expert advice to help you if you’re considering buying or selling in our market.  

Charlotte North Carolina Housing Market Update:  

October 2023

1. The Federal Reserve & Mortgage Rates

2. Number of New Listings

3. Number of Pending Sales

4. Number of Active Listings

5.Number of Expired & Withdrawn Listings

6. Number of Closed Homes

7. Average Sales Price

8. Market Overview

9. What Does This Mean For Home Sellers?

10. What Does This Mean For Home Buyers?

1. The Federal Reserve & Mortgage Rates

There’s a key player that can significantly influence the fate of our local Charlotte housing market and the nation’s housing market as a whole – the Federal Reserve. Understanding their recent actions and their implications is crucial for anyone involved in real estate, whether you’re a buyer or a seller. Let’s delve into the latest updates and how they affect our housing market.

September’s Federal Reserve Meeting

Last month, on September 19 and September 20, the Federal Reserve gathered to discuss the state of our economy and, more importantly, interest rates. The outcome? They opted to maintain the status quo, keeping rates unchanged. However, the message they sent was crystal clear – they’re gearing up for one more rate increase before the year’s end.

The Impact on Mortgage Rates

Wondering how these Federal Reserve actions affect those in the market for a mortgage? Well, when the Fed decided to hike rates in September, we witnessed a direct impact on mortgage rates. They inched up a bit higher, and now they’re hovering just above the 8% mark.

Insights from the Federal Reserve Dot Plot

Based on the most recent Federal Reserve Dot plot, we can probably expect to see the higher rates for longer.  Projections showed a high likelihood of 1 more hike this year and only 2 rate cuts for 2024, most likely later in the year.  This is 2 fewer cuts than were indicated during the Fed’s June 2023 update.  

Anticipating Another Rate Hike

The Federal Reserve will meet 2 more times this year, once October 31st/ November 1st  & again December 12th/13th. These will be critical days to pay attention to and can give us valuable insight as to how the housing market will react for the rest of 2023 and into 2024. Currently, the Federal Reserve is eyeing one more rate hike for the current year. This suggests their confidence in the economy’s strength and their commitment to keeping it steady. For those tuned into the housing market, this indicates a potential shift in the financial landscape.

Economic Ripples

What does all of this mean for the broader economy and the real estate market? Well, these adjustments in the Federal Reserve’s outlook can send ripples through the financial world. A more cautious approach to rate cuts in the coming year implies some tightening in the financial landscape. This could impact credit availability and the cost of borrowing, including mortgage rates. Buyers and sellers should keep an eye on these evolving dynamics as they navigate the housing market.

2. Number of New Listings

In September, the Charlotte housing market saw a total of 1,216 new listings hit the market. This figure marks a 4% increase from the number of new listings that appeared in August, and it is down by 9% when compared to September of the previous year 2022.

Deciphering the Decline In New Listings 

This downward trend in new listings month over month can be attributed to a couple of key factors. First on the list are seasonal patterns. As we venture further into the winter months, it’s natural to see a decrease in the volume of homes hitting the market. This aligns with the typical ebb and flow of the real estate calendar.

However, the second reason behind this decline is particularly noteworthy. It relates to the slight increase in mortgage rates. If you’ve been following our previous market updates, you’re likely aware that throughout this year, higher mortgage rates have acted as a deterrent for potential home sellers, dissuading them from making the leap. As rates climb, we witness fewer individuals deciding to list their homes for sale.

So, in essence, the trajectory of mortgage rates can serve as a barometer for the willingness of homeowners to enter the market. As these rates continue to evolve, we’ll be here to provide you with the latest insights and their potential impact on the Charlotte housing scene. Stay tuned for more updates as we decode the ever-changing real estate landscape

This data serves as a reflection of the market’s evolving dynamics and can provide potential buyers and sellers with insights into the market’s trajectory and potential opportunities. 

The Ripple Effect Of Low Mortgage Rates

These historically low mortgage rates are acting as a powerful incentive for homeowners to stay put. Selling and buying a new property often means taking on a new mortgage. For many, this could result in higher monthly payments, given that current rates for new mortgages are now higher than what many existing homeowners are locked into.

This reluctance to sell isn’t just about the numbers, it’s contributing to a palpable tension in the Charlotte housing market. With so few homeowners willing to list their properties, prospective buyers are left with fewer options, which can lead to competitive bidding wars and continually rising home prices.

3. Number of Pending Sales

In September, 912 homes in Charlotte accepted an offer.This marks a 12% increase from August and an 29% drop compared to September of the previous year. Without a doubt, we’ve witnessed a significant dip in the number of pending sales.

Year-Over-Year Reality

It’s worth noting that year-over-year, we naturally anticipate fewer homes accepting offers. This can be largely attributed to the fact that there are fewer homes entering the market in the first place. We’ve observed a consistent trend of fewer homes available on the market, both in pending and closed statuses, compared to previous years.

Yet, the pronounced decline in pending sales from August to September raises eyebrows. While this could partly be attributed to seasonal shifts, it’s a substantial decrease that warrants attention. Another factor in play is the uptick in mortgage rates, which currently hover just above the 8% mark. These higher interest rates appear to be wearing down potential buyers, resulting in a reduced number of homes going under contract.

New Listings Outpacing Pending Sales

An interesting trend continues to emerge – the number of new listings consistently outpaces the number of pending sales. When new listings surpass pending sales, it typically signals an increasing inventory. In simpler terms, more homes are entering the market than there are homes receiving offers. This shift can be one of the initial signs of a transition from a buyer’s market to a seller’s market.

However, the paradox lies in the fact that despite this trend, our local active listing inventory continues to dwindle. In this enigmatic scenario, we see the delicate balance between supply and demand, and it’s a phenomenon we’ll be keeping a keen eye on as we navigate the evolving real estate landscape in Charlotte. Stay tuned for further updates as we decode the ever-changing dynamics of the housing market.

4. Number of Active Listings:

In September, Charlotte had about 3,016 homes listed for sale. This was a 2% drop from August and a bigger 23% drop from September 2022.

Fewer Homes Listed Compared to Last Year: We’ve noticed fewer homes are being listed over the past year. It seems many homeowners are waiting before selling.

Why the Drop in Listings?: Even though more new homes are being listed than sold, there are still fewer homes available overall. This might be because more listings are being removed without selling. Some sellers might be unsure about the current market and decide to wait because of things like changing interest rates or the economy.

5. Number of Expired/ Withdrawn Listings

In September, we noticed an increase in listings being taken off the market, either withdrawn or expired. Specifically, 1,351 listings were removed, a 10% rise from August. This change gives us some insights into the current state of Charlotte’s real estate.

Why the Increase in Withdrawals?:

Why did this happen? Some homeowners might not have received the offers or interest they expected. This could make them rethink their strategy. They might change their agent, adjust their marketing, think about renting out their property, or even delay their moving plans.

The Market’s Ups and Downs:

Charlotte’s housing market is strong, but it’s seen some changes. Some months had lower prices, and houses took longer to sell. This might be due to higher interest rates and buyers being more careful with their budgets.

Choosing the Right Agent Matters:

If you’re selling, pick a knowledgeable agent. They should understand the market, keep up with changes, and have a good marketing plan to attract buyers. The market’s still active, but it’s different from a few years ago.

There’s Still Hope for Sellers:

If you tried to sell and faced challenges, there’s still hope. We’ve helped many homeowners who had trouble at first. If you’re in this situation, give us a call. We can discuss a strategy because houses are still selling.

Now, let’s talk about the number of homes that were sold.

6. Number of Closed Homes

Shifting our lens to September’s housing transactions, we see that 968 homes were ushered to new beginnings. This figure is significant, indicating a 16% decline from the closures in August. Even more pronounced, there’s a 25% dip when stacked against September’s statistics from 2022. This trend is in line with what we’ve been observing — a downward trajectory in home sales.

The narrative of dwindling homes on the market, combined with a reduced number of properties securing contracts, naturally results in fewer ownership transfers.

A cornerstone of our housing market’s fortitude remains the sustained low housing inventory. This dearth of available homes has fostered a competitive landscape, catalyzing an upward drive in property valuations.

7. Average Sales Price

In September, the average sales price soared to $540,000, marking an impressive 4% surge from the average sales price recorded in August. What’s more, it demonstrates an even more substantial 11% increase when compared to the average sales price in September of the prior year, 2022. These numbers signal robust and healthy appreciation in real estate values year over year.

September’s Resurgence:

While the previous months may have shown a slight softening in the average sales price, September brought with it a notable surge in month-over-month housing valuations. Such a trend accentuates the enduring vitality of Charlotte’s housing market, even as it grapples with pronounced rate fluctuations.

A Market Steeled Against Storms:

The real marvel lies in Charlotte’s housing market’s unwavering resilience, especially when viewed against the backdrop of significant rate hikes. The market’s ability to remain buoyant amid such economic turbulence speaks volumes about its inherent stability and the sustained appeal of Charlotte real estate

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8. Market Overview

Diving into the Current Climate: As we navigate the current ebb and flow of Charlotte’s housing market, it’s vital to understand the multitude of factors molding the landscape for both buyers and sellers.

The Echo of Student Loans: October ushered in a pivotal shift: the return of student loan payments. After a multi-year hiatus, this change brings with it a financial weight for over 40 million Americans, collectively shouldering an immense $1.7 trillion in student loan debt. For aspiring homeowners, this translates to added monthly expenses, ranging from a couple of hundred to several thousand dollars. Its ripple effect is vast, affecting not just Charlotte’s buyer demographic but also casting a nationwide shadow. This shift has the potential to impact inflation rates, influence purchasing capacities, and even sway the Federal Reserve’s strategic moves as they sift through this complex maze of economic indicators.

Navigating a Transformed Sellers’ Terrain: For sellers, the market is undergoing a metamorphosis. There’s a surge in the number of homes being listed, yet not all find eager buyers immediately. This imbalance has led to a slight uptick in the average days a property spends on the market. Now more than ever, it’s imperative for sellers to be agile, aligning with a savvy realtor to ensure strategic market positioning, and realizing the best possible price for their homes. Despite the shifting sands, the fact that numerous homes continue to change hands underscores the enduring vibrancy of Charlotte’s real estate sector.

Unyielding Fortitude Amidst Hurdles: The hallmark of Charlotte’s real estate market has always been its resilience. Even when confronted with rising interest rates and a dip in housing affordability, the market showcases a robust ability to bounce back. Challenges are ever-present, but so are opportunities for those equipped with knowledge and foresight.

Charting the Course Ahead: Our pledge is to remain steadfast in monitoring these shifts, ensuring that you’re always armed with the latest insights. Knowledge is power, and in the ever-shifting realm of real estate, staying informed is your best ally.

9. What Does This Mean For Home Sellers

For home sellers in Charlotte, NC, the current housing landscape may seem somewhat different than in the recent past. Here’s a breakdown of what’s happening and what you need to consider:

1. Increased Competition: The balance has slightly shifted with more homes entering the market than there are buyers. This inevitably means more competition. As a seller, it’s crucial to differentiate your property from the rest.

2. Longer Days on Market: Properties are taking a bit longer to sell. This extended timeframe means you’ll need patience and the right strategy to attract potential buyers.

3. The Importance of the Right Realtor: Now, more than ever, having an experienced realtor by your side can be the difference between a swift sale and a stagnant listing. Choose someone who understands the current market dynamics, can offer invaluable advice, and position your home to attract the best offers.

4. Market Resilience: Despite the challenges, the Charlotte housing market is showing resilience. Many properties are still selling, as evidenced by the successes we’ve had with our current and recent clients. It’s a testament to the city’s enduring appeal and the robustness of the housing market.

5. Factors to Watch: Two significant elements could influence the housing market shortly:

   • Federal Reserve Rate Hikes: The decisions made by the Federal Reserve, especially concerning rate hikes in October or December, can impact mortgage rates. A hike can make mortgages more expensive, which in turn affects buyer affordability. Notably, the recent rate hikes have had a pronounced effect on potential buyers.

   • Student Loans: With the commencement of student loan bills this month, it’s uncertain how this will impact potential buyers’ purchasing power. As these debts start to weigh on potential homebuyers, it might influence their decision to buy.

In conclusion, while there are changes in the horizon, with the right strategy and by keeping a close eye on evolving market conditions, sellers can still find success in the Charlotte housing market. If you’re considering selling your home, now is the time to be well-informed and proactive

If you are considering selling your home, make sure you choose the best Realtor. Watch this video to make sure you are asking your potential realtor the RIGHT questions:  10 Questions You Must Ask Your Realtor Before Hiring Them. 

10. What Does This Mean For Home Buyers

For potential homebuyers in Charlotte, NC, navigating the current market might seem daunting. Let’s break down the current situation and key considerations for those looking to make a purchase:Affordability Concerns: The present market is considered one of the most unaffordable times to buy a home. It’s essential to assess your financial health before making such a significant commitment.

1. Buy Within Your Means: A crucial piece of advice we always give is to only buy a property if you’re financially comfortable. This means:
   • Ensuring job security.
   • Not overstretching your finances.
   • Avoiding putting yourself in a precarious financial situation by buying beyond your means.
2. Mortgage Rate Fluctuations: While the idea of purchasing a home with a higher mortgage rate and then refinancing when rates drop might seem tempting, it’s a gamble. Mortgage rates are unpredictable. Although they might decrease sooner or later, basing your buying decision solely on this anticipation can be risky. My personal experience, having recently bought a home well within our means, speaks to the peace of mind that comes with such a decision.
3. Housing Market Crash Unlikely: If you’re waiting for a housing market crash like the Great Recession, the current data doesn’t support such a scenario. With persistently low inventory, the market remains resilient, though minor fluctuations are always possible due to various factors, including student loans, rates, and broader economic conditions.
4. Risk of Waiting for Lower Rates: While it might seem wise to wait for mortgage rates to drop, remember you’re not alone. Millions are waiting for the same opportunity. When rates do drop, a surge in demand will likely follow, driving up prices and competition. In contrast, the current market might offer opportunities to negotiate more favorable terms.
5. Every Situation is Unique: While these insights provide a general overview, it’s essential to remember that everyone’s situation is different. Consulting with a realtor who understands your needs and the market’s nuances can help in making an informed decision.

In summary, while challenges persist in the current housing market, opportunities are still present. Ensuring that you make well-informed and financially sound decisions will pave the way for a successful home-buying journey.

Is it a right time for you to buy or sell? 

We would love to connect with you, discuss your real estate goals and help you determine if now is a good time to buy/sell or if it is better to wait. Feel free to call us, text us, or email us. We would love to be your real estate resource of choice! 

Contact us through:

📱Call/Text Direct (704)-631-3977

📧Email: info@thefinigangroup.com