Charlotte home prices rise 5.8% in December

02/04/2014 10:50 AM

02/05/2014 5:09 AM

Home prices in the Charlotte region rose 5.8 percent in December from a year ago for the region’s 24th month in a row of annual gains, a report Tuesday showed.

Irvine, Calif.-based CoreLogic, which tracks repeat sales, said prices nationally rose 11 percent in December, the largest year-over-year increase since 2005. Nationwide, prices have risen on an annual basis for 22 months in a row.

Prices in the Charlotte, Concord and Gastonia area have returned to levels seen before the housing downturn, CoreLogic data show. But the data also show that annual gains are slowing.

In 2012, the region posted double-digit annual increases in each of the last three months of the year. There were no double-digit increases for any months in 2013.

In Charlotte and elsewhere, prices have been rising in part because of low supplies of homes for sale. In December, inventories in the region stood at a 4.8-month supply, according to the Charlotte Regional Realtor Association. A six-month supply is considered a balanced market.

Industry insiders say some would-be sellers still owe more on their mortgages than their homes are worth, which is preventing them from listing their properties. Home values need to rise more before those owners will be in a position to sell.

Compared with November, prices in the Charlotte region rose 0.2 percent in December. Nationally, prices fell 0.1 percent.

Many economists expect annual price gains to slow this year to a rate of about 3 or 4 percent. Mark Fleming, chief economist for CoreLogic, said he expects rising prices to attract more sellers, “unlocking this pent-up supply, which will have a moderating effect on prices in 2014.”

Nationwide, higher interest rates are making homes less affordable, especially for many first-time buyers. The average rate for a 30-year mortgage in December was 4.46 percent, up from 3.41 percent in January 2013. It remains unclear what impact even higher rates may have on the housing market.

CoreLogic forecasts a 10.2 percent year-over-year rise in home prices for January. Prices on a monthly basis are expected to fall 0.8 percent.

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