Charlotte's red-hot real estate market is squeezing potential home buyers out and driving down sales, a consequence of fast-rising home prices.
What should be a great market for sellers — with homes snapped up in days by a bumper crop of eager buyers — instead appears increasingly to be stuck, hamstrung by low inventory that drives prices higher each month. Homeowners are reluctant to put their properties on the market, because they're likely to have trouble finding something comparable to buy.
“Even though the Charlotte region is wedged into a solid seller’s market, incredibly low supply coupled with higher prices and rising mortgage rates are presenting challenges to buyers," said Jason Gentry, the Charlotte Regional Realtor Association's president.
Data compiled by the Carolina Multiple Listing Services show the average sales price in the Charlotte region jumped almost 6 percent in July compared with a year ago, to $302,177. Since 2012, the average home price in Charlotte has increased by about a third, from about $228,000.
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At the same time, the number of houses for sale plunged more than 17 percent from June 2017. That leaves just over two months of supply on sale in the Charlotte region, far below the six months that has historically indicated a balanced market. The number of houses for sale in Charlotte is barely more than half of what it was in 2012.
And the smaller number of houses on the market are also selling faster, an indication of the frantic pace of activity in the Charlotte's market.
Six years ago buyers didn't just have twice as many homes to choose from — they could browse at a much more leisurely pace and take their time to decide whether to make an offer. In June 2012, homes spent an average of 112 days on the market. That's more than three times longer than buyers typically have now.
Last month, homes spent an average of just 36 days on the market in June, or about five weeks. That's down a full seven days from the same month last year.
The inventory shortfall is particularly acute within Charlotte's city limits, where only 1.7 months worth of supply is on the market, down 11 percent from June 2017. The average price of a house sold in Charlotte jumped almost 8 percent, to $332,279, and houses sold after an average of just 29 days on the market.
Gentry said buyers are looking more outside Charlotte proper, to areas like Fort Mill, where the number of homes sold jumped almost 14 percent last month, compared with a year ago.
"Home sales are still occurring across the region, as buyers continue to seek homes outside Charlotte’s city limits," said Gentry.