We are three weeks into the new year and the real estate market is booming. I spend much of my days networking and talking with other Realtors across our region and the message is consistently very clear. The market is great and 2015 is likely to be a big year for Charlotte real estate.
This week we will release our Market Stats for December as compared to the previous month and to same month last year. Here is a quick summary:
– Home sales are up 23% from last month and up 15% from last year.
– Average sales price is even with last month, but up 2% from last year.
– Median sales price is even with last month, but up 7% from last year.
– Average price per square foot is up 3% from last month and 5% from last year.
– Average time on market crept up 10% from last month, but its down 29% from last year.
– Pending home sales are down 7% from last month and 6% from last year.
– Mortgage rates are at approximately 3.86% which is down both from last month and last year.
– The average housing payment is down 1% from last month and down 3% from last year.
So what does all this mean? There are a couple of compelling stats that jump out for me. Home sales jumped up substantially both from the prior month and from the prior year. I’m betting that this new demand is due in large part to decreasing interest rates and falling average house payments. Even though sales price appear to be steadily appreciating, the average housing payment has fallen because of lower rates. This will be a huge factor as we head into the spring selling season.
The high number of home sales in the month of December shows the greatest amount of demand in that month since 2006. During that year, the demand was largely from investors taking advantage of shady loan products. That is not the case this time around and also a good explanation for why we have not gotten back to those levels. The 2006 demand levels were unsustainable. As much as I would love to see that kind of demand again for my personal business, it is a scary place to go back to.
However, we also see that pending home sales are down both from last month and from last year. So while, December was a big month for sales, the pending home sales number suggests that closings will be lower in January and February.
Realtors are busy right now and the market it hopping. Based on all this early activity, I would anticipate this spring season will be as good as any we’ve seen in the past few years if not better. To me, the key indicator to watch is the interest rates as they are driving affordability. If prices continue to rise AND interest rates start heading back up, then we will likely see a slow down in demand. But that doesn’t appear to be happening at least in the immediate months ahead.
Back to work…..it’s busy out there!