Charlotte-area home prices up 4.4% as gains continue to slow
06/24/2014 11:31 AM
06/24/2014 2:11 PM
Charlotte-area home prices rose 4.4 percent in April from a year ago, as a trend of slowing annual appreciation in the region and nationwide continued, a closely watched survey showed Tuesday.
April marked the 26th month in a row the Charlotte region has posted year-over-year gains in prices, according to the Standard & Poor's/Case-Shiller index, which is based on sales of existing homes.
Annual appreciation in the region has slowed for six consecutive months. Nationwide, annual gains have slowed for five months in a row.
The 20-city index and a separate 10-city index measured a 10.8 percent increase in year-over-year prices, the lowest annual gain since March 2013. Nineteen of the 20 cities in the index posted lower annual gains in April than in March, with the exception of Boston.
“Although home prices rose in April, the annual gains weakened,” David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement. “Overall, prices are rising month-to-month but at a slower rate.”
In Charlotte, fewer home purchases by big investors has been cited as a reason for slowing price gains. The investors have bought homes across the U.S. since the housing downturn to turn them into rentals. Earlier this month, the Charlotte Regional Realtor Association attributed a drop in May home sales from the same month a year ago to the pullback in purchases by the investors.
Joe Rempson, the association’s president, said Tuesday part of the reason for the cooling of annual price gains is a slowdown in homebuilding.
A low supply of homes for sale has been cited as a key factor pushing up home prices in Charlotte and elsewhere.
Last month, the Charlotte region had a 5.4-month supply of existing homes for sale, down from a 5.7-month supply a year ago, according to the Charlotte Regional Realtor Association. A buyer’s market is one with six months or more of inventory.
In Charlotte, year-over-year appreciation has been slowing every month since October 2013, when prices rose 8.5 percent. That was the largest annual gain on record going back to 1987, according to Case-Shiller.
Home prices in Charlotte remain 7.6 percent below their peak in August 2007 but are above pre-recession levels.
Some economists say stricter lending requirements since the housing crisis are making it difficult for first-time buyers to purchase a home. That, coupled with higher home prices, has pushed some first-time buyers out of the housing market, economists say.
“First-time homebuyers are not back in force, and qualifying for a mortgage remains challenging,” Blitzer said.
“My first-time homebuyers are working with a budget,” said Alyce Walker of Re/Max Executive Realty in Charlotte. “They’re not willing to add to their debt with a mortgage.” Staff Writer Deon Roberts contributed.
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