This headline is one that hasn’t been written since 2011 and that’s because since 2011 (when the housing market in Charlotte hit rock bottom, it’s been all up hill. Since then, the median home price in the Charlotte area has increased 61.5%, housing inventories fell from 15.6 months to 3.7 and many properties are selling within days, instead of weeks. However this past September, something occurred has happened since 2011: year over year home sales declined.
Regionally, the home sales in the Charlotte area fell 16.5% compared to the year prior and pending home sales (new contracts) were off 6%. To put the pending contracts into perspective, 4,183 homes went under contract in September, which would be a remarkable year by any measure. In 2016, 3,947 homes went under contract during the month of September and prior to the Great Recession, only 3,485 homes were under contract in September 2005.
Here’s a closer look at the decline in sales by county:
- Mecklenburg County: -16.5% | 1,545 units
- Gaston: -24.1% | 252 units
- Union: -21.8% | 308 units
- Cabarrus: -4.0% | 334 units
- Iredell: -12.1% | 283 units
- Rowan: -15.1% | 146 units
- York: -6.6% | 425 units
- Lancaster: -4.0% | 144 units.
Some will point to Hurricane Florence as a reason for the decline in sales however there’s a serious flaw with that argument. First off, the remnants of the hurricane hit the Charlotte are on September 16 and save for a few outlying areas, the region was unaffected. Also, while insurers stopped issuing new homeowners insurance policies leading up to the storm, most sales were able to close the following week; well in advance of the end of the month.
The drop in sales volume has not translated into lower selling prices just yet. While prices on active inventories are being reduced for those properties that remain in the market greater than a few weeks, many of those properties were over-valued to begin with. Median home prices throughout the Charlotte area continued to climb last month, with the region seeing home prices jumping 5.8% / $227,500. The only county touching Mecklenburg that saw a decline was Iredell, as the median home price fell 4.1% / $235,000.
- Mecklenburg: $249,000 | +8.3%
- Iredell: $235,000 | -4.1%
- Cabarrus: $221,530 | +9.7%
- Rowan: $150,000 | +18.2%
- Gaston: $177,000 | +7.3%
- Union: $273,000 | +5.4%
- York: $239,400 | +1.1%
- Lancaster: $268,222 | +3.7%
Charlotte is just another city in a long line of major metros that are seeing their housing markets cool. In Seattle, home prices have fallen $70,000 in a three-month period heading into the fall and mortgage insurer Arch has rated Texas as having the most over-valued housing market in the nation.
It is way to early to declare that the steep rise in home prices have come to an end. The Charlotte area still has less than 3 months of available housing inventory and the slower pace of sales will take some time to show up in lower prices. Anecdotally, price reductions are starting to become more prevalent in the market as Sellers are working to get their properties under contract before the end of the year. Also, mortgage interest rates have risen nearly a full percentage point from this same period one year ago, also impacting affordability.