Charlotte’s housing market, like a US Airways 767, has been climbing fast as the area pulls out of the economic slump. Home sales through the regional MLS increased 40 percent in January, to get 2013 off the ground quickly. The increase wasn’t quite as high in June – but still hit 31 percent, compared to the same month the previous year.
The ascent has been breathtaking in some neighborhoods.
“The sales.... have been in the those areas that have traditionally been popular and – very important – those that are priced properly,” said Eric Locher, president of the Charlotte Regional Realtor Association. Neighborhoods closest to employment centers like uptown Charlotte are leading the surge, he said.
Home prices haven’t risen as fast as sales, but are rising. The average price for homes sold through the MLS in June was up more than 5 percent, to $239,842.
Sales of new homes were booming at mid-year, too, although precise figures are harder to track. “I’ve very bullish about the rest of the year,” said Alan Banks of Evans Coghill Homes, who’s the 2013 president of the Home Builders Association of Charlotte. “The market is strong. Demand is strong.”
That’s the take at mid-year.
So, where will it level off?
Locher and Banks say they aren’t sure what the numbers will look like, but that area homeowners will be comfortable on board.
The impressive sales figures reflect Charlotte’s allure as a place to live and work. Momentum slowed during the slump. Now, though, the improving economy means employers are hiring and workers are gaining enough confidence to pack up and head this way.
What drives the real estate market, said Locher, who’s with CottinghamChalkHayes, is that people want to move here. “And, increasingly... they can.”
Also, he said, renters are gaining enough confidence – and financial resources – to move back into the housing market.
The impressive sales increases during the first half of the year reflect pent-up demand that built when prospective buyers lacked confidence and resources, he said. “You’re looking at people who really would have liked to buy, but couldn’t.”
What are the headwinds?
Interest rates were rising from historic lows at mid-year, although national economists say rising rates aren’t likely to slam the resurgent market any time soon.
On the other hand, distressed sales are falling. Locher said that is significant for the Charlotte region. Many of the most deeply discounted homes have worked through the system, and the topic no longer dominates industry conversations. “As a talking point,” he said, “(distressed sales) have kind of come and gone.”
At mid-year, it was the lack of inventory that dominated conversations among agents and brokers.
Realtors say there just aren’t enough homes to meet the growing demand, especially in the most popular neighborhoods, and a closer look at the sales figures reveals the problem.
At mid-year, the regional Carolina Multiple Listing Services offered a 5-month supply of homes. Not bad, compared to the 6-month supply that’s traditionally considered a balance of buyers and sellers.
But there was just a 3.4-month supply in Mecklenburg County. And the tally was even lower in some listing areas in the county. For instance, in Area 7, which stretches from uptown across southwest Mecklenburg, there was a 2.5-month supply. That’s half the overall supply.
Buyers are regaining confidence. Now, to restore inventory and balance, sellers have to follow.
New home builders, like agents and brokers, faced an inventory shortage of their own.
Some reported that they were having trouble hiring enough workers to keep up with demand. Banks said some builders faced larger hurdles than others, and that sometimes the problem is just finding workers quickly when they’re needed. “I need you Tuesday, you show up Thursday, I have a problem.”
Banks said the labor issues are likely to work themselves out as demand continues the rest of the year and into 2014.
By then there might be something else for builders to worry about: A shortage of home sites. Builders are gobbling up lots in existing neighborhoods, and development of new subdivisions stalled during the downturn.
Banks predicts that will mean an increase in tear-downs in older, infill neighborhoods, especially by smaller builders who don’t have the resources to develop larger suburban neighborhoods.
Allen is a retired home editor and current home columnist for the Observer.
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