Charlotte NC home prices saw a sharp decline of 8% in January. Is the Charlotte NC housing market crashing? The Charlotte NC housing market is changing rapidly. In January alone the average sales price here in Charlotte NC dropped by 8%. If you’re interested in staying “in the know” about the most up to date information on the Charlotte NC housing market than this video/article’s for you!

Today we will look at the catalysts and trends that are affecting our Charlotte NC housing market, the leading and lagging indicators that can help us identify the current and future state of the housing market. We also discuss what we can expect from the Charlotte housing market in 2023.

 It seems like everyone has their own take on whats going to happen in this housing market.  Everywhere you look, you’ll find headlines preaching fear, uncertainty, and doubt. Our goal is to help you sift through all of the crazy headlines and focus specifically on the greater Charlotte area. Real estate is very local in nature and not all markets will be affected the same.

1. Housing Market Overview

2. Mortgage Rate & Effect On Housing Market

3. Number of New Listings

4. Number of Pending Listings

5. Number of Closed Homes

6. Average Sales Price

1. Market Overview

The Charlotte NC housing market started out with a ‘Bang’ in January 2023. The amount of pending sales increased rapidly, while the average home price dropped by over 8%. Numerous factors are: The average home price in Charlotte NC has dropped by 14% since the top of the market (In June 2022). However, the amount of pending sales increased by 80% from December 2022 to January 2023. To identify the fluctuation in the housing market, we can take a look at one of the major factors, the mortgage rate. 

2. Mortgage Rate & Effect On Housing Market

The mortgage rates have proven to be one of the most influential factors affecting our local housing market. We can see that November 10th of 2022 proved to be the peak for mortgage rates in 2022. Since the peak in November, the mortgage rates have steadily fallen to end the year at 6.42%. 

In real time, we can see the effects in our local housing markets. Pending sales were very strong towards the end of December and into January. The mortgage rate started at 6.48% in January and steadily fell to over just above 6% at the end of January. 

The Federal Reserve

The Federal Reserve met again on January 31st & February. At this meeting they raised the federal funds rate by 25 basis points, taking the FED prime rate to a targeted range of 4.5% and 4.75%. This takes the federal funds rate to the highest since October 2007. Currently, the market’s predicting the FED will raise rates one last time in March 2023. After this last rate hike, it’s expected the FED will keep rates where they are until the end of the year. This means, unless worsening inflation data is released, we are getting very close to the end of the FED’s rate hikes.

We know that the Federal Reserve’s #1 goal is to bring inflation under the 2% target. While we have a long way to go to get below 2%, we’re moving in the right direction.  

Why is this important? 

Home buyer’s don’t buy for price point, they buy for payment. Remember the rule of thumb, for ever 1% change in mortgage rates, affects a buyers purchasing power by 10%.   

3. Number of New Listings

In January, 954 new listings hit the market, which was an 50% increase from the number of new listings in December 2022. We can expect to see more people list their homes as we enter into the new year due to seasonal trends of the market. However, we saw a 19% decrease in the amount of new listings year over year. This shows us that many homeowners are still choosing not to put their homes on the market, which is keeping the Charlotte housing inventory low. The number of new listings coming to the market have continuously decreased throughout 2022 and into 2023. The year over year trends show a huge discrepancy in the amount of homes hitting the market. Most homeowners in the United States have a mortgage rate under 5% (many around 2-3.5%) , which could be persuading them to not make a move. If a homeowner wants to move, they would need to purchase a home at a much higher interest rate.

4. Number of Pending Sales

In January, 1107 homes in Charlotte NC accepted an offer. This was a 80% increase from December 2022 and a 9% decrease from the amount of homes that accepted an offer in January 2022.  

Fewer homes listed = Fewer homes accepting offer’s.

We can expect the number of pending sales to increase, due to seasonal trends. However, there was a HUGE increase in the number of pending sales from December 2022 to January 2023. One strong reason for this could be the mortgage rates. As we stated before, the mortgage rates fell by around 1% since their highs in November 2022, this means that buyers have 10% more in purchasing power. Buyers affordability had a boost, so we saw a boost in the number of pending sales in January 2022. 

One of the best leading indicators for the housing market is the number of new listings compared to number of pending sales. This helps us determine how to project the inventory levels we can expect in the future.

Sellers Market | Decrease In Inventory

If the number of pending sales continuously outpace the number of new listings, then we can expect the amount of homes for sale will decrease. This means that there will be less homes avaliable and buyers will have less homes to choose from. If this trend continues, then you can expect for the market to eventually transition to a sellers market.

January 2023 New Listings: 954 

January 2023 Pending Sales: 1107

This was the second month in a row that the number of pending sales out numbered the number of new listings. There are two factors that could have caused this trend:

1. Homeowners who would have put their homes on the market, are not.

2. The mortgage rates have slightly declined, increasing buyers purchasing power.

5. Number of Closed Homes

In January 647 homes closed in Charlotte, which was a 28% decrease from December 2022 and a 48% decrease from January 2022. 

We have seen the number of closed homes continuously decline throughout 2022. The number of closed homes is a lagging indicator. Since we have seen fewer newer listings and fewer pending homes, we can expect to see the number of closed homes to be lower. 

6. Average Sales Price

In January 2023, the average sales price was $456,000. This was a 8% decrease from December 2022. Remember, sold home data is a lagging indicator. This means closed home data paints a picture of what happened 30-90 days previously in the housing market.  

Most likely, the homes that closed in January 2023, accepted an offer in mid November 2022.  This means those buyers were faced with the highest mortgage rates of 2022. We know that buyers buy for payment, and they had the lowest affordability. This pressure on buyer affordability shows up in the closed home data of January 2023.  

This means we are now down 14% from the peak of the market in June 2022. 

Even though Charlotte has seen an average home price drop of 6% since June, we still see a healthy year over year appreciation of 6%. Charlotte is also outpacing the United States as a whole. The United States is only seeing a year over year appreciation of 1%. 

Even thought the Charlotte, NC housing market has soften, we are still outperforming the United States as a whole. The economic factors + mortgage rates will affect everywhere, however some cities will be affected more than others. 

For home sellers

The market has softened from the peaks we saw in Q1 & Q2, however we are coming off the best time in history to sell a home. You’re still seeing double digit year over year price appreciation. Also, if you bought in 2019, your homes value has increased by 75%. Will you see more competition on the market? Yes! However, homes are still selling, you just need the right agent with the right approach

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. 

For home buyers

Buyers purchasing power has been decimated this year. Housing affordability nationwide is the worst it has ever been on record due to spiking home prices and interest rates, Bloomberg reports. 

However, if you are in the market to purchase a home, you will find more avaliable homes to choose from. You may find you can negotiate more on the sales price and other terms. You could ask the seller to pay for your closing costs and/or a home warranty.

Strong strategies for buyers:

1. Ask for the seller to pay for your closing costs, and use the closing cost concession to “buy down” your mortgage rate.

2. If you have a home to sell, you can make an offer contingent on your home selling. Home sale contingencies have been almost impossible over the past few years, however, with the market softening more sellers are open to accepting a home sale contingency. 

Should you buy a home right now?

It really depends on what you are looking to accomplish, your goals, and your timeline. If you are wondering if NOW is the right time to purchase, visit Is NOW a Good Time to Buy a House in Charlotte? We explore who should be purchasing a home and who should wait a little bit. 

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

It really depends on what you are looking to accomplish, your goals, and your timeline. 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