Charlotte-area home prices jumped 7 percent in March from the same month last year, as the area’s housing market continues to improve for sellers.
The Standard & Poor’s/Case-Shiller home price index reported the price increase Tuesday.
Case-Shiller also said Charlotte was one of five U.S. metropolitan areas to record their largest month-over-month gains in more than seven years: In the Charlotte area, home prices were up 2.4 percent in March over February.
Charlotte has recorded year-over-year price gains on the index every month since March 2012.
But Charlotte’s 7 percent jump was more than what some observers expected.
Mekael Teshome, economist for Pittsburgh-based PNC Financial Services Group, which operates bank branches in Charlotte, said 7 percent was “a little stronger than I would have anticipated.”
He added, though, that he doesn’t think Charlotte is in a real estate bubble, because the area’s higher housing prices are based on what he called the region’s improving economy.
“It is a dynamic economy,” he said, pointing to income and population growth in the area. “We’re not building more than we need. We’re really not seeing that in Charlotte.”
Housing “is still affordable in the region,” he said.
The increase in Charlotte home prices came as U.S. housing prices rose 10.2 percent in March from a year ago, according to Case-Shiller. All 20 U.S. cities tracked by the index saw prices increase in March from the same month last year.
Although Charlotte’s home prices rose, the region did not see the double-digit percentage increases found in other parts of the U.S. in March. Of 20 cities, 12 had double-digit percentage increases in the year-over-year comparison, with Phoenix logging the largest uptick, 22.5 percent.
Charlotte’s falling inventory
Some of the cities where housing prices are climbing the most are in areas hit the hardest during the housing downturn, Teshome said.
“The foreclosure glut in many of these markets was really large,” he said. “The correction in Charlotte wasn’t as much due to speculative overbuilding as compared with, say, Phoenix and Las Vegas. So one should not expect a dramatic an increase in prices. But that’s a good thing in my opinion.
“The improvement in Charlotte’s housing sector is really due to fundamentals: an increase in demand versus the supply of homes.”
Mark Watson, a Keller Williams broker who specializes in the Ballantyne area, said the 7 percent price rise in March for Charlotte is “definitely a much larger increase than what I expected.”
“I’m not going to complain,” he said. “And sellers aren’t going to complain about that, either.”
Falling inventory is driving up home prices, he said. In April, according to the Charlotte Regional Realtor Association, inventory in the Charlotte region declined 30 percent from April 2012, resulting in a 4.9-month supply of homes for sale.
Buyers make multiple offers
As the supply of homes shrinks, real estate brokers in the Charlotte region are reporting more situations where buyers are making multiple offers.
Despite the higher housing prices, Watson said he doesn’t expect to see a real estate bubble in Charlotte anytime soon. But if prices continue to rise at their current rate in Charlotte, he said, “that could lead us back into a situation where we’re becoming overpriced quickly.
“But I don’t think that’s the case. I think just as long as the lenders are still doing a good job at prequalifying the buyers ... I say let the prices go back up.”
Roberts: 704-358-5248; Twitter: @DeonERoberts
The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.
Have a news tip? You can send it to a local news editor; email email@example.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.Read moreRead less