Charlotte home prices rise 7.8% in December over last year

02/25/2014 9:25 AM

02/25/2014 6:44 PM

Charlotte-area home prices posted yet another month of annual gains in December, a report Tuesday showed, as low inventories continued to tip the market in favor of sellers.

Prices in the region rose 7.8 percent, the area’s 22nd month in a row of year-over-year increases, according to the Standard & Poor’s Case-Shiller price index report.

Nationally, prices rose 13.4 percent, according to a 20-city index. But there are growing signs that the U.S. housing market could be losing momentum, according to the report.

Across the U.S., including in Charlotte, low inventories of homes for sale have contributed to rising prices. In January, existing properties for sale sank to a 4.7-month supply, the lowest level on record going back to 2005, the Charlotte Regional Realtor Association reported.

Many economists say they expect price gains to moderate this year.

“13 percent is not realistic to be repeated,” Craig Lazzara, senior director for S&P Dow Jones Indices, said in an interview. Nationwide, price gains could drop to mid to high single digits this year, he said.

He said he expects the price slowdown in Charlotte to not be as dramatic as in other parts of the U.S., where prices skyrocketed faster during the housing bubble.

“You didn’t boom as much. You didn’t deflate as much,” he said about Charlotte.

Charlotte-area home prices have recovered from lows hit during the housing downturn, Case-Shiller data show. But prices in the region remain 9 percent below their peak in August 2007.

In December, there were annual gains in all 20 cities tracked by index report. Charlotte was on the lower end, as areas such as Las Vegas and Los Angeles posted gains of more than 20 percent. Only Cleveland and New York recorded lower appreciation than Charlotte.

Lazzara said he was surprised that Charlotte did not post a annual gain as large as some other Southern cities. Atlanta logged a gain of 18.1 percent, while Tampa, Fla., recorded an increase of 15.8 percent.

The contraction in Charlotte’s banking industry could have played a role, he said.

“I would be surprised if that didn’t have some impact on prices there,” he said.

David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement that price gains nationwide are slowing from month to month.

“The strongest part of the recovery in home values may be over,” he said.

A combination of rising home prices and higher mortgage rates is making homes less affordable, Blitzer said. That could lower future demand for home purchases.

The widely watched Case-Shiller report tracks only repeat-home sales, omitting the effect of prices from sales of new homes. The report lags by two months.

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