A view of downtown Charlotte, which has become one of the fastest growing cities in the United States and … [+]
Charlotte, North Carolina, is one of the hottest places in the United States. From 1990 to 2000, its population increased by 36.6%: from 395,934 people to 540,828. From 2000 to 2010, it increased by another 35.2%: from 540,828 to 731,424 people. And while less so but still impressive, from 2010 to 2020, Charlotte’s population grew by nearly a fifth, from 731,424 people to 874,579.
All this growth has not coincidentally led to a surge in real estate market activity in Charlotte. The city was already buzzing ahead of the pandemic-induced home-buying frenzy in 2021 and 2022. Read on to learn about the top trends that will develop in Charlotte’s real estate market in 2023 and the likelihood of a real estate market crash .
Charlotte Housing Market 2023: Overview
Through our analysis of housing data from red fin
RDFN
, the Charlotte metro area real estate market may not be as hot as it was in 2021 and 2022. As a result, several central cities in the greater Charlotte real estate market have experienced a decline in prices. That said, other real estate markets in the Charlotte metro area are seeing prices continue to rise.
The median sales price of a home in the Charlotte metro area reached a high of $410,000 in June 2022. As recently as July 2023, the median sales price was $400,000. As of September 2023 (most recent data available), the median sales price in the Charlotte metro area was $390,000 – unchanged from September 2022.
For the city of Charlotte proper, home prices peaked in June 2023, with a median sales price of $425,000. This represents a 5.1% increase from $385,500 in September 2022. More importantly, the new higher price levels in the Charlotte real estate market established as a result of the pandemic are here to stay. Comparing average house prices over 12 months makes this clearer. For the 12-month period from October 2022 to September 2023, the average median sales price in Charlotte was $399,573. Compare that to $319,083 for the period October 2020 to September 2021 and $271,873 for the period October 2019 to September 2020.
Below is a table of the 24 Charlotte metro area real estate markets we examined, ranked in order of highest year-over-year growth in home prices:
The town of Waxhaw, located 25 to 30 miles south of Charlotte, saw the largest year-over-year growth in real estate prices. It is also one of the fastest growing cities in the state. From a median sales price of $600,000 in September 2022, prices increased 30%, reaching a median sales price of $780,000 in September 2023. The city of Matthews is closer to Charlotte and to the south -East. Its median sales price increased by more than a quarter (27.2%), from $458,000 in September 2022 to $582,500 in September 2023.
Meanwhile, Weddington, which is between Waxhaw and Matthews, saw the biggest year-over-year decline in home prices. But they were descending from very high heights. As of September 2020, the median sales price in Weddington was $730,277. It then climbed to $1,224,997 in September 2022. A year later, the median sales price fell 20.4%, to $975,000 in September 2023.
Inventory in the Charlotte real estate market continues to decline
Unlike many other major real estate markets, like Las Vegas, which have seen their housing inventory build up, in Charlotte this is not the case at all. Only five of the 24 real estate markets we analyzed in the greater Charlotte area experienced a year-over-year increase in available inventory. For the Charlotte metro area as a whole, available inventory fell 16.2%, from 8,720 homes for sale in September 2022, to 7,305 homes in September 2023. In Charlotte proper, the decline was more pronounced, with a drop of 22.1%, of 2,476 available housing units. housing available in September 2022, up to 1,929 housing units available in September 2023.
In Indian Trail, a southeast Charlotte suburb next to Matthews, available supplies have been cut in half. It decreased by 51.7%, from 172 available homes in September 2022 to 83 available homes in September 2023. This decrease in inventory most likely puts downward pressure on the number of active listings, which decreased by 45 % from one year to the next. On the other side is Harrisburg, a suburb to the northeast. Its inventory increased 23.1%, from 65 homes for sale in September 2022 to 80 homes for sale in September 2023. As a result, prices there fell, with the median sales price in Harrisburg falling 7%. going from $505,500 last September to $470,000 in September.
The percentage of active listings with price drops has decreased
One of the most useful metrics for analyzing real estate market activity is the percentage of monthly active listings that have had their list price reduced. When sellers attempt to move, the percentage of active listings with price drops typically increases. On the other hand, when demand is high and inventory is low, it is more likely that price cuts will decrease.
This is essentially what happened in most of the Charlotte area. In the city of Charlotte, a third of active listings in September 2022 had price drops. This figure fell to just 27.1% in September 2023. For the entire Charlotte metro area, nearly 35% of active listings saw their prices drop in September 2022, before falling to 27% in September 2023 .
Below is a chart detailing trends in the percentage of active listings with price declines in the 24 areas we analyzed in the greater Charlotte real estate market:
The result of a Charlotte housing market crash
Based on the data and our analysis, it doesn’t appear that Charlotte’s real estate market is going to collapse. One of the main indicators of an impending housing crash is the build-up of a large housing inventory. This certainly hasn’t happened in the Charlotte real estate market. While it’s true that homes for sale are staying on the market longer than last year in the Charlotte metro area, in the city of Charlotte, homes themselves are spending fewer days on the market than last year .
Another important thing to consider when trying to anticipate a crash is the sales-to-listing ratios of real estate markets in a certain area. For example, when you have a sale price to list price ratio of 99%, that means a home was sold for 1% below its list price. A sale price to list price ratio of 101% means a home sold for 1% above its list price. During housing bubbles, sales-to-listing ratios tend to exceed 100%, as purchasing a home drives up the final sale price. In housing crashes, the opposite is true, as the initial listed price remains on the market without being sold and therefore has a lower final sales price when ultimately purchased.
In the Charlotte real estate market, sales-to-listing ratios have remained very stable over the past three to five years. There have been fluctuations, with some cities exceeding 100%, but the highest sales-to-listing ratio achieved in the Charlotte real estate market was 101.1%, in Matthews in September 2023.