Charlotte’s housing market continued its upward trajectory in December, with prices and sales up from a year ago as the number of homes for sale hit its lowest level all year, the Charlotte Regional Realtor Association reported Tuesday.
But the association cautioned Tuesday that federal mortgage rules that take effect Friday could hurt sales as some buyers are disqualified for mortgages. The rules require lenders to scrutinize financial information about borrowers and are designed to prevent the sort of risky loans that contributed to the financial crisis.
Average home prices rose 9 percent from last year to $224,128, as the inventory of homes for sale sank to a 4.8-month supply, the report on existing-home sales showed. A widely accepted definition of a seller’s market is one in which the number of homes for sale is below a six-month supply.
Joe Rempson, president of the association, called December’s inventory the lowest it’s been “in a long time.” He said multiple factors are keeping supplies low, including a slowdown of new-home construction during the housing downturn and would-be sellers who are waiting for prices to rise more before listing their homes.
Rempson said he expects inventories to rise as potential sellers gain more equity in their homes and become more confident in the housing market. But it might still be a couple of years before some homeowners recover enough equity to be comfortable selling, he said.
Builders are expected to add to supplies in coming months, he said. “They’re starting to produce more new homes.”
Faster sales, slowing gains
Compared with a year ago, December sales were up 12.8 percent to 2,636 in the 18-county region, outpacing the 2,505 homes newly listed for sale in the month. The number of homes for sale stood at 13,918.
Home prices in Charlotte and elsewhere have been bouncing back from the housing downturn, according to various indexes. But monthly price gains nationwide have begun slowing, reports show. Real estate officials say they expect appreciation to continue but at a lower rate.
Amid the tighter supplies, homes are selling faster in the Charlotte region. The average amount of time it took for a home to sell was 101 days, down from 115 a year ago but up from 99 in November.
The Realtors association also reported Tuesday that there were 34,468 closings for all of 2013, up 24.6 percent from 27,660 the year before. Rempson said purchases from large investors were the primary driver of sales last year. An Observer investigation in July found that Wall Street-backed investment groups have been snapping up homes in middle-class neighborhoods across Charlotte to turn them into rentals.
Mortgage rates also rose last year, likely motivating some potential buyers to make a purchase.
New mortgage rules
As the new year begins, the Realtors association said is keeping an eye on the new federal mortgage rules, which stem from the 2010 Dodd-Frank Act. The ability-to-repay and qualified-mortgage requirements are intended to press lenders to make sure prospective borrowers are able to repay home loans. Rempson said the concern among the Realtors is that the rules will prevent some people from obtaining a mortgage.
“The more restrictions you put in place, it just naturally eliminates some borderline qualified persons.”
Overall, his outlook for 2014 is positive, he said.
Tuesday’s Realtors data come on the heels of last month’s Standard & Poor’s Case-Shiller index report, which showed Charlotte-area home prices in October posted their biggest annual gain in 26 years. According to that report, the region’s home prices climbed 8.8 percent from a year ago.
According to a separate report released Tuesday by real estate data firm CoreLogic, home prices in the Charlotte, Concord and Gastonia area rose 6.6 percent in November from a year ago when distressed sales were included. Prices fell 0.4 percent from October, the report on repeat sales showed.
Prices rose 11.8 percent nationally in November from a year ago and rose 0.1 percent from October, the report showed.
Roberts: 704-358-5248; Twitter: @DeonERoberts
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