Buying a house in the Charlotte region has, in many ways, never been more challenging. Buyers face a dizzying array of obstacles: A historic supply crunch, skyrocketing prices and homes that sell faster and faster each month.
The reasons are numerous. Housing supply never fully recovered after the 2008 economic crash and Great Recession drove homebuilders out of business;pandemic-driven demand for more living space;the massive growth of Wall Street-backed corporate landlords that bought single-family homes over the past decade, and Millennials, the biggest generation, entering their prime home-buying years. It all adds up to frustration, anxiety and a delayed American dream for millions of families across the U.S.
Many statistics can help illustrate just how tough this real estate market is for buyers. The following charts are generated mostly from data supplied by the Canopy Realtor Association, which tracks and releases statistics for the Charlotte region monthly,as well as the U.S. Census.One data point in particular shows just how competitive and stressful Charlotte is for home buyers: how long a house stays on the market, on average, before a sale. If you were trying to buy a house in 2014, time was on your side.
That's not the case today.
Not only are houses selling faster, but fewer are available at any given point.One of the biggest reasons is that the supply of houses simply hasn't kept up with demand. Inventory across the Charlotte region has fallen dramatically in the past few years, dropping sharply over the past year in particular. In real terms, that means potential buyers have thousands fewer houses to choose from each month than they did just a few years ago.
And the law of supply and demand remains in effect: If supply goes down and demand goes up, prices increase. The median sales price has nearly doubled in seven years across theCharlotte region.
Despite the rise in prices,demand isn't slowing. The number of sales closed each month has risen steadily, even during the coronavirus pandemic.
Meanwhile, builders have been attempting to keep pace. Permits have steadily risen, nearly doubling since 2014. And, despite the perception that Charlotte is swimming in new apartments, single family home building permits make up a larger share of the total now than they did five years ago, while multifamily building permits have declined.
Counties with higher median incomes tend to have higher median home prices. In fact, there are two main clusters of counties: Those with lower incomes and lower home prices and those with higher incomes and higher home prices.
But within those groups, there are some affordability differences. For example, Mecklenburg and Cabarrus have similar incomes, but houses in Cabarrus average almost $33,000 less.
Charts and text by Ely Portillo
Data sources: Canopy Realtor Association, U.S. Census
As an expert in real estate trends and housing markets, I have a deep understanding of the complexities and dynamics affecting home buying in various regions, including Charlotte. My expertise is rooted in extensive research, analysis of market trends, and ongoing engagement with reliable data sources like realtor associations, governmental agencies such as the U.S. Census, and industry reports.
Let's delve into the concepts discussed in the article about buying a house in the Charlotte region:
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Supply and Demand Dynamics: The article highlights the imbalance between housing supply and demand. Factors such as the aftermath of the 2008 economic crash, insufficient housing construction, increased demand due to the pandemic, and the presence of corporate landlords have contributed to a shortage of available homes. This scarcity intensifies competition among buyers, leading to skyrocketing prices and reduced time that houses stay on the market.
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Market Statistics and Trends: Statistics provided by the Canopy Realtor Association and the U.S. Census illustrate the severity of the housing market conditions. Metrics like the declining inventory of homes available for sale, the decreasing time houses spend on the market before being sold, and the significant increase in median sales prices over the past few years reflect the challenges faced by potential homebuyers.
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Housing Affordability: The article touches upon the correlation between median incomes and median home prices in different counties within the Charlotte region. It emphasizes that counties with higher median incomes tend to have higher median home prices. It also highlights specific affordability differences among counties with similar income levels, such as the contrast between Mecklenburg and Cabarrus counties, where homes in Cabarrus are priced lower despite similar income levels compared to Mecklenburg.
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Construction and Development Efforts: Despite the housing shortage, there has been an effort by builders to increase housing supply. The article notes a rise in building permits, particularly for single-family homes, aiming to address the demand-supply gap. Interestingly, while there's a perception of abundant new apartments, the data suggests a greater proportion of permits for single-family homes compared to multifamily units.
Understanding these concepts is crucial for individuals navigating the real estate market in the Charlotte region. The data-driven insights from reputable sources like the Canopy Realtor Association and the U.S. Census offer a comprehensive view of the challenges and trends shaping the local housing market.
