The Charlotte market has officially made the shift from buyer’s market to seller’s market as the December market stats for Mecklenburg County have revealed. This change is representative of an extremely quick turn around for the real estate market and shows the true power of supply and demand.
Housing supply is defined as the number of months it would take to exhaust the existing supply of homes at the current sales pace. A six month supply is considered balanced, while greater than six month’s is a buyer’s market and less than six month’s is a seller’s market. In November of 2012, that number stood at 6.4 for Mecklenburg County and dropped to 5.8 in December. So we are beginning 2013 in a seller’s market according to the definition.
The last time we saw supply this low was May of 2007 which was near the peak of the market in Charlotte. Average sales price hit a high just a few month’s later that summer. Supply hit a low in December of 2006 at 4.7 months and then started creeping back up from there. It eventually bottomed out at 13.7 months supply in June of 2009 which was about eight months after the market crash of 2008.
Home prices lag supply. As supply falls, it means that either demand is increasing or that fewer sellers are listing. The current inventory levels are a combination of both. Demand has increased tremendously as the econonmy and consumer confidence improves. But this is coupled with fewer homes coming on the market as sellers wait for prices to climb back to 2007 prices.
Prices are already rising and will continue to do so with supply levels this low. However, as sellers realize that prices are increasing and they can now get more for their home, more and more will begin to get back on the market. That effect will keep supply from getting uncontrollably low. Keep watching this blog and my E-Newsletter as I report the supply stat. When starts climbing again, then the market price increases will likely settle a few month’s after that.
Today we will send out our monthly E-Newsletter reporting the real estate stats for Mecklenburg County. When comparing December 2012 to the previous month and again to the same month last year, here’s an overview:
– Home sales are up 2% from last month and up 30% from the prior year.
– Average sales price was up 6% from last month and up 18% from the prior year.
– Median sales price was even from last month but up 4% from the prior year.
– Average time on market was up 7% from last month but down 5% from the prior year.
– Pending home sales were down 6% from last month but up 30% from the prior year.
– Supply was down 10% from last month and down 29% from the prior year.
– Mortgage rates are at 3.35% from 3.96% this time last year.