Sales of existing homes in the Charlotte region rose in September from a year ago, as inventory continued its downward trend, the Charlotte Regional Realtor Association reported Tuesday.
But the strengthening numbers came as many area real estate officials were focused on the lingering federal government shutdown, which they say is creating hassles for buyers seeking loan approvals and some uncertainty for the housing market.
Closings were up 26 percent, to 2,825 from 2,243. The average sales price increased 7.5 percent, to $220,866 from $205,459. The report is based on an 18-county region.
Although the market is improving for sellers, buyers still face a tight supply of homes for sale, which is credited with boosting prices. Eric Locher, association president, sounded a word of caution for prospective buyers about the low inventory, saying they should expect to face competing bids.
As prices rise, it could encourage more people to sell, boosting inventory levels, he said.
“Those who say they’re going to wait until next spring might want to consider putting their home on the market now,” Locher said. “You want to sell when people are buying. And we have people who are buying.”
With shrinking inventory, sellers raised listing prices 6 percent on average, to $256,205 from $241,831. Buyers paid 94.6 percent of original listed prices, up from 91.9 percent.
Charlotte-area inventory has been locked in what is widely considered sellers’ market territory since November. A sellers’ market is generally considered one that has a less than a six-month supply. Last month, the number of homes for sale fell 9.7 percent from a year ago, resulting in a 5.4-month supply, unchanged from August.
In Charlotte and elsewhere, the housing industry is also watching rising mortgage rates to see what impact they will have on the market. According to mortgage giant Freddie Mac, the average rate for a 30-year mortgage in September was 4.49 percent, still a historically low level but up from 3.41 percent at the start of the year. As rates rise, they are expected to push some prospective buyers out of the market.
Rising mortgage rates have been motivating some to hurry and purchase a home before rates get even higher. In the Charlotte region, it took on average 133 days for a home to sell from the time it was listed, down 17 days from a year ago.
From August to September, the average home price in the region fell 7 percent. Locher attributed that to a drop in sales of expensive homes. That decline was driven by fewer expensive homes being on the market after many such properties were gobbled up in the first seven months of the year, he said. Those that are still on the market have already been picked over, he said.
Eyes on the shutdown
Meanwhile, with the government’s partial shutdown in its second week, the Charlotte-area housing industry is wondering what impact it might have on the housing market if it continues.
Mortgage lenders have said they’ve been unable to obtain tax transcripts from the Internal Revenue Service during the shutdown, forcing them to decide whether to underwrite mortgages without the documents. Some companies have said they will not close on loans until they can get the transcripts.
Locher said the potential that home loans won’t be funded without the transcripts is on the minds of the real estate industry.
“We wonder what the effect will be,” he said.
He said there’s also uncertainty about how government-backed home loans will be processed.
“We just don’t know,” he said. “I don’t want to be ‘sky is falling if the government isn’t at work.’ But there are a couple question marks out there.”
Roberts: 704-358-5248; Twitter: @DeonERoberts
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