Local citizens looking to buy a home in Charlotte may need additional help from real estate experts, as there could be some hiccups related to new residential construction.
Overall homebuilder confidence slipped to 45 in May from April's 46, according to the Housing Market Index completed jointly between the National Association of Home Builders and Wells Fargo. Due to the figure being lower than 50, the majority of industry members felt that the home construction market has room for improvement in future months.
Sales conditions took a hit, and went into negative territory, with a figure of 48, the report noted. Buyer traffic rose two points, but was still far lower than the overall benchmark, as it posted a 33 in May. However, the measurement of sales expectations did make an improvement, as it rose to 57, one point higher than April's level.
"After four months in which the HMI has shown little signs of fluctuation, it is clear that builder sentiment is becoming more in line with the market reality of a continuing but modest recovery," said Kevin Kelly, a home builder and developer from Wilmington, Delaware, and chairman of NAHB. "However, builders expressed some optimism that sales will pick up in the coming months."
While the situation could be better across the country, it may be improving in the South, which could be good for those who want to purchase a home in Charlotte. The report explained that the South's measurement rose one point in May to 48, which was the highest level of any region in the country.
The West had the most significant movement of any region, as it fell four points to 47 in May, the report showed. The Midwest also dropped to 47, but it was only a one point decline. The Northeast experienced no change month-over-month, and had the lowest figure, posting a 33.
Home prices should rise this year
While there may be some slow conditions in new home construction, the overall price of properties is on the rise. According to a report from CoreLogic Case-Shiller, home prices rose 11.3 percent during the fourth quarter of 2013 compared to the same point in 2012. However, that level was more than 20 percent lower than the peak in 2006. This was still 20 percent higher than the low point recorded at the end of 2011.
While the fourth quarter's progress was a help, there should be further gains this year. The report showed that prices should continue to rise by more than 5 percent by the end of this year.
"Limited construction of new homes and low inventories of existing homes for sale contributed to the jump in prices," said Dr. David Stiff, principal economist for CoreLogic Case-Shiller. "Developers remain cautious about building too many new houses until they see stronger demand in their markets."
Despite the lowered momentum, it should still make an impact, as it would be improved from the annual average of 4.5 percent since 1975, the report added.