The mortgage rates plummet after the Federal Reserve’s most recent meeting. Could this reinvigorate our local housing market? There’s a lot to unpack. In this month’s Housing market update, we saw the Federal Reserve meet again. We’ve seen that price decreases are on the rise and our housing inventory is increasing as well. We will cover all this and more this month as we review Charlotte, North Carolina’s housing market.

The Current State of Charlotte’s Housing Market

As we dive into November, Charlotte’s housing market presents a mixed bag of trends and opportunities. The Federal Reserve’s latest meeting has led to a significant drop in mortgage rates, potentially breathing new life into the market. This month, we’ve observed a notable increase in housing inventory coupled with rising price decreases. These developments could signal a shift in the market dynamics, offering both challenges and opportunities for buyers and sellers alike.

 In this post, we’ll explore the macro and 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 Number of Expired & Withdrawn Listings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

On October 31st and November 1st, the Federal Reserve held a pivotal meeting, resulting in a decision that’s set to impact home buyers and sellers alike. In a move that brought a collective sigh of relief, they announced that rates would remain steady, between 5.25% and 5.5%. This stability is certainly welcoming news in the real estate world.

A Word of Caution from Jerome Powell

However, it’s not all clear skies ahead. Jerome Powell, the Federal Reserve Chair, hinted at the possibility of another rate hike during their next meeting on December 12th and 13th, the final one for 2023. This leaves the door open for a potential increase in rates before the year wraps up.

Mortgage Rates Take a Dip

Post meeting, the mortgage rates took a surprising turn, dropping from just above 8% to slightly below 7.5%. This half a basis point change might seem small, but its impact is significant. Remember, in the world of real estate, it’s not just about the price, it’s about the payment.

2. Number of New Listings

In October, the Charlotte housing market saw a total of 1,212 new listings hit the market. This figure marks a 1% decrease from the number of new listings that appeared in September and it is down by 2% when compared to October 2022. 

Comparing Yearly Trends

The number of new listings are almost on par with last year’s numbers, a notable point for those who’ve been tracking our monthly updates. This year has seen a huge decrease in the number of new listings compared to the previous year. The persistently low levels of housing inventory have played a crucial role in shaping the dynamics of Charlotte’s housing market. This scarcity of available homes has not only intensified competition among buyers but also contributed to a steady increase in home prices. With fewer options on the table, buyers are often finding themselves in bidding wars, pushing prices upwards.

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.

October’s Encouraging Sign

One uplifting aspect of October’s market was the number of homes that accepted offers. This shows that, despite the market’s ups and downs, Charlotte’s housing scene remains active and resilient, with buyers and sellers still keenly engaged in the market.

3. Number of Pending Sales

In October, 937 homes in Charlotte accepted an offer. This marks a 8% increase from September and an 6% rise compared to October 2022. Defying typical seasonal trends, this surge in pending sales highlights a bustling period of activity in our local market.

Personal Insights from the Field

From my own experience, having personally closed deals on 13 homes in October, I can attest to this uptick in market activity. It’s a trend that deserves attention, especially considering that mortgage rates remained high throughout the month. 

Balancing New Listings and Pending Sales

Interestingly, the number of new listings in October outpaced pending sales. This means more homeowners listed their properties than those that had offers accepted, a pattern we’ve observed throughout the year. This is a key indicator suggesting a growth in housing inventory. This trend, where more homeowners are listing their properties than those securing offers, has been a consistent theme throughout the year. It’s a fascinating development, indicating a gradual shift in the market’s rhythm.

A Market in Transition

This rise in inventory suggests that Charlotte’s housing market is possibly transitioning from the extreme seller’s market we’ve seen in recent times. It’s a development that requires both buyers and sellers to stay informed and adapt their strategies accordingly. For buyers, it’s an opportunity to find homes that might have been out of reach in a tighter market. For sellers, it’s a reminder to focus on presenting their homes attractively to stand out in a gradually expanding market.

4. Number of Active Listings:

October marked a notable point in Charlotte’s housing market, particularly in terms of active listings. The average number of homes available for sale at any given time was 3,178. This represents a 5% increase from September, indicating a slight but significant uptick in available properties.

Year-Over-Year Comparison

However, when we compare these figures to the same period last year, there’s a stark contrast. We’re looking at a 17% decrease in active homes compared to last year. This year-over-year comparison is crucial as it highlights the ongoing trend of fewer homes being available in the market, despite the recent increase in active listings. 

Contextualizing the Current Market

While the increase in active listings might seem like a positive shift, it’s essential to view it in the broader context of the year’s trends. Throughout the year, the number of new listings consistently outpaced pending sales. However, the overall number of active listings at any given time has been on a decline. This was partly due to a significant rise in expired and withdrawn listings over a few months.

A Shift in the Recent Trend

October’s data, however, paints a slightly different picture. This month diverged from the recent trend, showing an increase in active listings. This change is noteworthy as it could signal a shift in the market dynamics, offering more options for buyers who have been navigating a tight market.

5. Number of Expired/ Withdrawn Listings

In October, we observed a decrease in the number of expired and withdrawn listings. Specifically, 1,279 homes were either expired or withdrawn from the market. This figure represents a 4% decrease compared to September, indicating a subtle yet noteworthy shift in seller behavior and market conditions.

Balancing Active Listings with Market Withdrawals

This change becomes even more significant when we consider it alongside the 5% increase in active listings during the same period. The simultaneous occurrence of these two trends, an increase in active listings and a decrease in expired/withdrawn listings. This paints a complex picture of the current market dynamics.

Interpreting the Market Indicators

The relationship between new inventory, pending sales, and the number of expired/withdrawn listings is a critical one. It provides valuable insights into the health and direction of the housing market. In this case, the decrease in expired and withdrawn listings, coupled with the increase in active listings, suggests a market that is slightly shifting gears.

What This Means for the Charlotte Market

These trends are leading indicators that help us gauge the future trajectory of the housing market. The decrease in expired and withdrawn listings could imply that sellers are either more confident in the market or adjusting their strategies to align with current buyer demands. It might also indicate that homes are being priced more realistically, aligning better with buyer expectations and market values.

The Bigger Picture

For buyers and sellers alike, understanding these nuances is key to making informed decisions. Sellers might take this as a sign of a stabilizing market, where their properties have a better chance of selling without the need to withdraw or let listings expire. Buyers, on the other hand, can interpret this as a signal of a competitive market with fewer homes being pulled off the market.

In summary, October’s decrease in expired and withdrawn listings, against the backdrop of an increase in active listings, offers a unique perspective on the evolving Charlotte housing market. It’s a reminder that in real estate, every trend and shift counts in understanding the bigger market picture.

6. Number of Closed Homes

In October 863 homes sold, marking a 15% decrease from September. More strikingly, this represents a 19% drop compared to the number of homes that closed in October of the previous year.

Year-Over-Year Decline & Its Implications

This 19% year-over-year decrease is quite telling. It underscores a trend where fewer homes are entering the market, leading to fewer homes going under contract and, consequently, fewer homes reaching the final stage of sale. This pattern is a clear indicator of the changing dynamics in the local real estate market.

The Impact of Higher Mortgage Rates

One of the key factors behind this trend is the recent rise in mortgage rates. This increase has led to an unexpected consequence. Many homeowners are choosing not to sell. With 80% of homeowners in the United States currently enjoying a mortgage rate of 5% or lower, and a significant 33% locked in at rates below 3%, there’s a reluctance to move. These low rates have essentially ‘trapped’ people in their current homes, as they are hesitant to give up these favorable rates for the uncertainty of a new mortgage.

The Role of Low Housing Inventory

This reluctance to sell has contributed to the low levels of housing inventory, one of the most significant factors in maintaining the stability of our housing market. With supply at an all time low, buyers have had fewer options to choose from. Despite this, there remains a strong demand with many buyers actively searching for homes.

7. Average Sales Price

In October, Charlotte’s housing market saw the average sales price settle at $537,000. This figure represents a slight dip from September’s average, yet it’s important to note that it still signifies a 9% increase compared to October of the previous year.

Fluctuations & Year-Over-Year Growth

The average sales price in the Charlotte area has experienced some fluctuations over the past few months. Despite these variations, the year-over-year trend reveals a robust increase in the average sales price. This growth is a testament to the resilience of the housing market in the area, even in the face of challenging economic conditions.

The Impact of Higher Mortgage Rates

The recent period has been marked by significantly higher mortgage rates, which have inevitably impacted buyer affordability, now at near all time lows. These higher rates are beginning to take a toll on home buyers, as evidenced by the changing dynamics in the market.

Market Resilience Amidst Challenges

Despite these hurdles, the Charlotte housing market has shown a remarkable degree of resilience. The steady year-over-year increase in the average sales price indicates a market that, while adjusting to new economic realities, continues to maintain its strength and appeal.

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8. Market Overview

Inventory Trends:

• • In October, there was a 5% increase in active listings compared to September, totaling 3,178 homes.
  • However, this represents a 17% decrease compared to the same period last year, indicating a long-term reduction in available homes.

Market Dynamics:

• • • The number of new listings slightly decreased compared to last year, reflecting a trend of fewer homes entering the market.
    • Despite more new listings than pending sales, overall inventory remains low.
    • Expired and withdrawn listings decreased by 4% in October, affecting the overall market dynamics.

Sales & Prices:

• • Home closures in October decreased by 15% from September and 19% year-over-year.
  • The average sales price in October was $537,000, a slight decrease from September but a 9% increase from October of the previous year.
  • High mortgage rates have impacted buyer affordability and influenced market trends.

Mortgage Rates and Buyer Impact:

• • Post Federal Reserve meeting, mortgage rates dropped from just above 8% to below 7.5%.
  • This decrease in rates potentially increases buyer purchasing power by about 5%, equating to around $25,000 more in buying capacity.

Seller & Buyer Considerations:

• • Homeowners are hesitant to sell due to low mortgage rates locked in previous years.
  • Buyers face a market with limited supply but potentially more purchasing power due to recent rate decreases.

Future Outlook:

• • The market’s direction will be influenced by the Federal Reserve’s decisions in upcoming meetings.
  • Any further decrease in mortgage rates could increase competition among buyers.

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:

Market Stability Despite Challenges: Despite the overall decrease in the number of homes sold year-over-year, the Charlotte housing market remains relatively stable. The average sales price in October was $537,000, showing a healthy 9% increase from October of the previous year. This indicates that while the volume of transactions may be lower, property values are still appreciating.

Impact of Low Inventory: The current low inventory levels are a significant advantage for sellers. With fewer homes on the market compared to last year, sellers face less competition. This can lead to more favorable selling conditions, such as better offers and potentially quicker sales.

Influence of Mortgage Rates: The recent drop in mortgage rates, from just above 8% to below 7.5%, could reinvigorate buyer interest and activity in the short term. For sellers, this means there might be an increase in the pool of potential buyers, especially as buyers’ purchasing power has increased slightly.

Charlotte Home Sellers, What Should You Consider? 

Optimal Time to Sell: With the current market conditions, including the slight increase in active listings and the decrease in expired and withdrawn listings, it’s a favorable time for sellers to enter the market. The reduced competition and potential increase in buyer interest create a conducive environment for selling.

Pricing Strategy: Given the stable yet fluctuating market conditions, pricing your home correctly is crucial. The market shows resilience with a steady increase in average sales prices, but being mindful of current trends and buyer affordability is key to attracting serious offers.

Future Market Trends: Sellers should keep an eye on the Federal Reserve’s decisions and mortgage rate trends. Any further reduction in rates could lead to increased buyer activity, while a hike could dampen it. Staying informed will help in making timely and strategic decisions regarding the sale of your property.

In conclusion, for home sellers in the Charlotte area, the current market presents a unique set of opportunities. The combination of low inventory, increasing average sales prices and fluctuating mortgage rates creates a potentially advantageous situation for sellers ready to enter the market

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:

Challenging Inventory Levels: The current market is characterized by low inventory levels, with a 17% decrease in active listings compared to last year. This means buyers have fewer options to choose from, which can lead to a competitive buying environment.

Recent Increase in Listings: There was a slight increase in active listings in October compared to September. While this offers a bit more choice, the overall low inventory still makes it a seller’s market.

Impact of Mortgage Rates: The recent decrease in mortgage rates, from just above 8% to below 7.5%, is beneficial for buyers. This reduction can increase purchasing power, allowing buyers to afford more expensive homes than they could have just a few weeks prior.

Charlotte Home Buyers, What Should You Consider?

Market Timing: For buyers, navigating the current market requires a balance of urgency and caution. The slight increase in inventory provides more options, but the overall low supply means good properties may still sell quickly.

Budget & Affordability: With the average sales price in Charlotte at $537,000 and showing a 9% increase from last year, buyers should be mindful of their budget. The recent drop in mortgage rates can help, but it’s important to factor in long-term affordability, especially with the possibility of future rate hikes.

Strategic Approach: Buyers should be prepared for potential competition and have their financing in order. Working with a knowledgeable real estate agent can help navigate the market, make competitive offers and find the right property within budget constraints.

Future Market Trends: Keeping an eye on mortgage rate trends and Federal Reserve decisions is crucial. Any further decrease in rates could make buying more attractive, while an increase might reduce affordability.

In conclusion, for home buyers in the Charlotte area, the current market presents both challenges and opportunities. The key is to stay informed about market trends, be clear about budget limitations, and act decisively when the right opportunity arises. With strategic planning and a thorough understanding of the market, buyers can navigate these conditions successfully.

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