Charlotte will be the seventh-hottest housing market in the U.S. next year, according to a new prediction from Realtor.com. But that might be bad news for first-time buyers and people looking at lower-priced houses.
The Charlotte region is one of several in the Southeast that made Realtor.com’s top 10 list released Wednesday, highlighting the region’s growth and economic strength. Realtor.com’s chief economist said that while more new houses are likely to be built, added inventory will probably go to the high end of the market – and won’t help relieve the crunch that buyers on the lower end of the spectrum face.
“The starter home category is probably going to be the last to recover,” said Danielle Hale. “That relief probably won’t come until 2019. The shortage is much more severe in that segment.”
Charlotte clocked in just behind Salt Lake City and ahead of Colorado Springs, Colo. Home prices in Charlotte are expected to rise about 3 percent next year – just below the national average – and the number of sales is expected to jump almost 6 percent, reflecting high demand.
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Las Vegas is forecast to be the hottest housing market, with prices jumping almost 7 percent, followed by Dallas/Fort Worth and Daytona Beach, Fla.
In Charlotte, home prices have been shooting up. In October, the average house in Charlotte cost $267,615. That’s a 4.2 percent jump from $256,812 in the same month last year.
At the same time, low inventory is discouraging many buyers from putting their houses on the market because they can’t be sure they’ll easily find somewhere else to move that fits their budget. That leaves many buyers and sellers stuck in a situation that only makes house prices rise faster because of high demand and low supply.
This problem was on display last month in Charlotte, when the number of houses for sale plunged 18.9 percent from last year. There’s a 2.4-month supply of houses on the market, less than half of what’s considered normal for a balanced market.
Realtor.com is predicting that increased construction will continue next year, gradually boosting the supply of homes and helping relieve the inventory shortage. Even more high-end houses will eventually help lower-priced buyers, Hale said, because more trade-up buyers will feel comfortable moving and putting starter houses on the market.
“We’re expecting to see more growth in construction in Charlotte,” she said. “That should do a better job of helping builders keep up with demand and hold price growth down.”