People looking to buy a house in Charlotte may soon have more options, as rising home prices could help increase lagging inventory levels. In recent years, the number of properties available for sale has been limited, as homeowners are still recovering from severe home value declines that put them underwater on their mortgages. However, recent appreciation is helping people return to positive equity, which could lead to more houses hitting the market in the coming months.
In March, strong home price appreciation continued, with an 11.1 percent year-over-year increase, according to the CoreLogic Home Price Index report. This marked the 25th consecutive month of annual gains. When compared to February, prices were up 1.4 percent.
One concern about rising home prices is that it could make purchasing a house unaffordable for some. But, once more properties hit the market, appreciation will slow, as sale prices won't be driven up by multiple bidders.
"Home prices continue to rise across the nation, but affordability, tight credit and supply concerns are becoming an increasing drag on purchase market activity," said Anand Nallathambi, president and CEO of CoreLogic. "In many markets – especially major metro areas like Los Angeles, Atlanta and New York – home prices are being driven up at double-digit rates fueled by a lack of inventory and record levels of cash purchases."
Rising inventory could spur housing activity
The limited number of homes available for sale has kept housing activity in check in Charlotte – and across the country. The latest report from the National Association of Realtors revealed a 0.2 percent drop in existing-home sales during March. On a year-over-year basis, completed transactions were down 7.5 percent.
NAR chief economist Lawrence Yun said there should be more home sales being completed at this time of year due to a number of factors.
"There really should be stronger levels of home sales given our population growth," he said. "In contrast, price growth is rising faster than historical norms because of inventory shortages. "With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly."
It appears as though rising home prices are already having a positive impact on inventory levels. In March, total housing inventory increased 4.7 percent to 1.99 million existing homes available for sale. This represents a 5.2-month supply at the current sales pace, which is an increase from 5 months in February.
With more properties becoming available for sale, the Charlotte housing market is expected to heat up, and buyers should be aware that they'll need to prepare for a competitive market.
Those interested in moving forward on a local housing acquisition, or hoping to sell a house in Charlotte, can benefit by partnering with Lodestone Real Estate. The trusted agency has helped hundreds of individuals successfully navigate the path to homeownership during its years in operation.