2016 has proven to be a record year for Charlotte real estate as demand and prices have risen to new highs. There is a seasonal effect in our market which leads to both demand and prices peaking during the early summer months. Over the past ten years, June is historically one of the best months for closed sales in any given calendar year. This June the average home price for single family sales in Mecklenburg county hit $330,000 over 1651 sales. These numbers represent a 9% increase in home prices since last year and a 3% increase in the number of sales.
Charlotte has recovered from the 2008/2009 recession substantially better than most other cities and many say that Charlotte has been one of the best cities for real estate growth in past several years. We are fortunate to live in a city with such a vibrant, growing economy.
To put things in perspective, below is a chart of June home prices and sales over the past 11 years going back to 2005:
|Average Price||# of Sales|
The previous peak for prices was right before the recession was in June 2007 and many said that prices would never get back to those levels. But the chart above clearly shows we have pushed well passed those levels and continue to grow. The peak for number of sales was back in 2006 and we have not yet gotten back to that level although at 1651 sales in June, we are close. At the peak of the market back in 2006, demand had gotten to an unstainable level and I remember a time when almost 50% of sales were investors. If that starts to happen again, then it may signal the need for caution. However, this time around buyers, investors, and banks seem to be more cautious.
Historically (prior to the recession), Charlotte real estate prices grew at rate of around 2-3% per year. The last ten years have seen huge swings both up and down, but the average home price over a ten year period has only grown 2% per year. So while the last few years have experienced higher than normal price appreciation, that may just be the balancing out of the decline from the first few post recession years .
Charlotte is peaking now and markets always experience both highs and lows. So the question remains, how much higher will the market go before the next dip? We just have to wait and see.