The short answer is: not yet. There is no doubt that the rapid increase in interest rates over the past year has taken effect to curb spending and the resulting inflation, real estate sales included. The number of home sales has declined sharply in recent months and the forward looking, pending home sales suggest that a trend of decreasing sales will continue for the near future. However, prices have not fallen any more than they usually do this time of year.
Recently I read a news article covering different parts of Charlotte and how home prices have fallen since the peak of the market in June. The data was accurate in that the average home price has fallen roughly 7% from June to September. However, this is a seasonal effect that happens every year in both good and bad markets. If you’ve followed this blog for any length of time, you’ve heard me talk about seasonality often. In the Charlotte market, prices typically peak every calendar year in late spring to summer and they bottom out in January or February. This year the peak average sales price of a single family home in Mecklenburg County occurred in June and was $608,000 according to Canopy Multiple Listing Service. In September, it fell to $563,000 and is holding firm in October at $565,000.
It is significant to note that in October, the average home price is up 20% over the same month last year when the average sales price was $472,000. That’s an almost $100,000 increase in average sales price in one year and hardly a statistic that suggests falling prices.
With pending sales down and inventory slowly beginning to rise, we will most surely see the numbers begin to change. A 20% increase in prices is not likely to continue nor is it healthy. Our team will continue to watch the market closely and keep you informed right here on this blog.
This week we’ll release the market stats comparing single family home sales in Mecklenburg County in October to the prior month and the same month last year. Here is a sneak peak of the numbers:
- Home sales are down 18% from last month and 30% from last year.
- Average sales price is about the same as last month but up 20% from last year.
- Median sales price is up 3% from last month and 21% from last year.
- Average price per square foot is down 1% from last month, but up 15% from last year.
- Sale to list price ratio is unchanged from last month but has dropped to 99% from 102% last year.
- Average time on market is up 9% from last month and 67% from last year.
- Pending home sales are down 21% from last month and 47% from last year.
- Mortgage rates, currently at 6.9%, are up from 6.11% last month and from 2.9% last year.
- Average house payment is up 9% from last month and 90% from last year.