Charlotte’s real estate market remains healthier than during the depths of the housing crisis, but rising home prices and tighter mortgage requirements are among factors constraining sales, a top real estate executive said Wednesday.
“We do have some challenges over the horizon that we’re trying to deal with and figure out,” Pat Riley, CEO of Charlotte-based Allen Tate Cos., said at a SouthPark luncheon organized by the Hood Hargett Breakfast Club.
Among the issues he cited:
Low supplies: Buyers continue to encounter a “huge undersupply” of homes for sale, Riley said. The Charlotte metropolitan area had a 3.7-month supply as of September, according to the Charlotte Regional Realtor Association, below the six months widely considered a balanced market.
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Rising prices: Prices for new homes have become unaffordable for some buyers, in part as the cost of undeveloped land is back to pre-recession levels, Riley said. “Land is skyrocketing,” he said.
Rising prices for new homes also stem partly from higher labor costs driven by a lack of construction workers, he said.
Tighter mortgage rules: Since the housing crisis, lenders have implemented tougher requirements for borrowers to get mortgages. Riley said that is preventing some first-time homebuyers from getting a home loan.
Despite such challenges, Riley pointed to rising home sales in the Carolinas. Contributing factors include people moving to the region and millennials beginning to buy homes, he said.
He said his company is on pace to have about 22,000 closed transactions in the region from Raleigh to Greenville, S.C. That’s up from about 19,700 last year and a post-crisis low of about 15,900.
“This shows you how healthy we are in North and South Carolina,” he said. “Overall, compared to where we were, we’re in heaven.”