Some Charlotte homes are considered ‘overvalued.’ New national housing report explains
A new report on the state of the housing market in the U.S. includes Charlotte as a community where values have skyrocketed to the point of being “overvalued.”
An analysis by Moody’s Analytics, first reported by Fortune Magazine, found that home prices in Charlotte are overvalued by more than 60%. The Charlotte market — which has been hot but recently shown signs of cooling off — is one of many across the country where homes have become overvalued, Moody’s says.
And those markets could be in for a precipitous drop in home prices in the event of a recession.
Here’s what to know about the value of homes in the Charlotte area and what that means for the region’s real estate market:
Are Charlotte homes ‘overvalued’?
Moody’s analysis, which looked at more than 400 markets around the country, concluded that home values in the Charlotte region are overvalued by 66%. That puts Charlotte among the 183 markets Moody’s says are overvalued by more than 25%.
Such sky-high home values could lead to a steep drop-off in the event of an economic downturn, Moody’s chief economist Mark Zandi told Fortune.
Zandi’s team predicts that home prices would fall nationwide by 5 to 10% in the event of a recession, Fortune reported, while communities such as Charlotte with especially inflated home values could see a drop in home prices closer to 10 to 15%.
State of the Charlotte housing market
Moody’s latest report on home values in Charlotte comes as the housing market shows some signs of cooling off.
The median home sales price in Charlotte in July was $395,000, according to RE/MAX’s National Housing report, down 4.1% from June’s median of $412,000.
“A seller cannot just put their house on the market and expect any price … We’re seeing buyers having a better positioning to work on the price and take some time to make decisions as opposed to those split decisions they had to make within a few minutes of being in a home earlier this year,” Tiffany Johannes, the broker-in-charge and general manager of Charlotte’s RE/MAX Executive, previously told The Charlotte Observer.
Still, July’s figure represented a year-over-year increase in the local median sales price, up 16.2% from July 2021’s median of $339,945.
Current Charlotte home values
Data supports the premise that home values are on the rise across many Charlotte-area ZIP codes.
Values have gone up by an average of 26.3% since July 2021, according to figures from the real estate website Zillow, in the area, reaching an average value of $509,400.
Use the interactive map below to see how home values are faring in your neighborhood:
This story was originally published August 29, 2022 at 6:00 AM.
