Charlotte-area home sales fell 6.5 percent in May from the same month a year ago, largely the result of big investors scaling back purchases, the Charlotte Regional Realtor Association reported Tuesday.
There were 3,193 sales during the month, down from 3,414 a year ago, the report on existing-home sales showed. It was the region’s first annual decline in sales since a February slump that was attributed to harsh winter weather.
Joe Rempson, the association’s president, blamed May’s sales decline primarily on fewer homes being bought by large investors compared with a year ago.
Looking for deals in the wake of the housing downturn, such investors have flocked to Charlotte and other metro areas, buying properties with cash to use as rentals. Investors’ purchases have declined as home prices have risen and inventories of distressed homes have dwindled, data show.
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In the Charlotte-Gastonia-Concord area, large investors bought 13.1 percent of residential properties sold in the first three months of this year, compared with 14.4 percent in the same period last year, according to a report last month from RealtyTrac, an Irvine, Calif.-based real estate data firm.
“I think a lot of our (sales) right now are more of your traditional buyers, buying their home for a primary residence,” Rempson said.
From April, sales in the Charlotte region in May rose 6.8 percent. The average time it took for a home to go from listing to a sale being finalized was 126 days, down by seven days from a year ago.
Tuesday’s Realtors’ report provided fresh evidence of cooling annual gains in the region’s home prices.
The average sales price of $235,109 in May was only 0.9 percent higher than a year ago, following a 2.2 percent rise in April from the same month a year ago.
Across the U.S., annual appreciation has slowed in recent months, other national reports have shown. Some economists have attributed the slowdown partially to first-time homebuyers being unwilling to take on more debt, hurting home purchases.
Low supplies of homes on the market have helped drive up prices in the Charlotte region. According to the Realtors association, the average listing price in May was $285,377, up 7.2 percent from a year ago.
The region last month had a 5.4-month supply of homes for sale, down from a 5.7-month supply a year ago. A widely accepted definition of a buyer’s market is one with six months or more of inventory.
In a twist, low inventories are discouraging some potential sellers from listing their homes, because they can’t find a new home to purchase amid the thin supplies, real estate insiders say.
As home values rise, fewer properties have been going into foreclosure in the Charlotte region.
A separate report released Tuesday by RealtyTrac showed foreclosure filings – defined as default notices, scheduled auctions and bank repossessions – for 915 properties in the region in May, down 35 percent from a year ago.
Rempson said he’s optimistic about the overall direction of the area’s housing market.
“We’re not seeing double-digit growth in things, but I don’t think we want to,” he said.
He said it’s better for the market to have slow and steady growth to avoid creating fears of another real estate bubble.