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Charlotte home sales rise 10% in October

Met Life Home Sales
T. Ortega Gaines - ogaines@charlotteobserver.com
Shortages in the supply of existing and newly built homes is driving up home prices nationwide, a trend expected to run into 2014, a real estate expert said. The low inventories have been leading to bidding wars among some homebuyers in parts of Charlotte.

Charlotte-area home sales rose 10 percent in October from a year ago as fewer properties were listed in a market that continues to have tight supply, the Charlotte Regional Realtor Association said Friday.

The average sales price also increased, climbing 3 percent to $210,278, the report that tracks only existing-home sales showed. Compared with September, prices were down 5 percent.

There were 2,831 closings in October, up less than 1 percent from September. It was the 28th month in a row of year-over-year increases in closings for the 18-county region.

But in bad news for buyers, the number of homes for sale fell. The figure sunk to a 5.3-month supply from 6.9 months’ worth a year ago. The association’s president, Eric Locher, said the shortage is slowing down sales and is a “significant” reason for rising home prices.

“That’s just basic economics of supply and demand,” he said.

The dip in inventory gives buyers fewer homes to choose from. It also makes it more likely that potential buyers will face competing bids.

Low inventory has some brokers taking extra steps to find homes for buyers interested in particular neighborhoods. Susan May, with Charlotte-based HM Properties, said she’s been sending letters to homeowners to let them know buyers are interested in their properties – just in case they might be thinking about selling.

“I really don’t have a lot of luck with those,” she said. “But they’re worth a shot.”

Brokers from different companies are telling one another about what their buyers are looking for, in the hopes of connecting them with sellers, she said.

During a visit to Charlotte last month, Lawrence Yun, chief economist for the National Association of Realtors, said U.S. supplies of existing homes for sale are at a 13-year low and inventories of newly built homes are at a 50-year low. Supplies are expected to remain low into next year, he said.

In October, 15,366 homes were listed in the Charlotte region, down 8 percent from a year ago and a decline of 1 percent from September. Locher said it’s likely that some sellers put their houses on the market much earlier in the year because they worried that rising interest rates would scare off buyers.

“Every year, this time of year, we’re challenged with inventory,” he said, “but especially this year because we had such a run of sales for the first several months of the year.”

Investor competition

Charlotte-area buyers face added competition for homes. Large, out-of-town investors have been buying up properties in the region to turn them into rentals. A report in September from real estate data firm RealtyTrac showed the investors were responsible for one in five Charlotte-area home purchases from May to July, making the region the second-busiest market in the U.S. for such buyers behind Atlanta.

Buyers in October snapped up homes faster than they did a year ago. For the month, homes took 96 days on average to sell, down from 108 days. Homes sold for 93.9 percent of the original listed price, up from 92.3 percent a year ago.

Locher, the Realtor association president, said the housing market in the region overall favors sellers. Still, sellers can’t “ask what they want and demand what they want,” he said.

The market varies by location, he said. “Buyers have more power in different areas than they do in others.”

Charlotte-area home prices have been rebounding since the depths of the housing market’s downturn. Home prices in the area bottomed out in February 2011, when the average fell to $180,036, according to an Observer review of Charlotte Regional Realtor Association data. Since then, prices hit a high of $239,284 in June.

Real estate data company CoreLogic said Tuesday that home price gains in Charlotte and nationwide have slowed in recent months. The Charlotte area saw a 0.1 drop in home prices in September from August, according to the report. Prices in the Charlotte area have returned to levels not seen since September 2008, but they remain below highs hit in the summer of 2007.

Rising mortgage rates are said to be slowing home purchases. The National Association of Realtors cited that as a factor in a report last week that said pending U.S. home sales declined for the fourth consecutive month in September. Higher home prices were also blamed.

Roberts: 704-358-5248; Twitter: @DeonERoberts
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