Spring is here and with it comes a spring selling season that seems to have started early this year. Actually, the spring selling season feels like it started last year and never slowed down. Seasonality plays a larger role in real estate sales here in Charlotte. Typically sales are strongest in the spring with prices peaking in the summer time. Sales units and prices usually decline into the fall and winter and the cycle starts over.
That pattern was consistent again this year in terms of homes sold, but prices really didn’t dip like they usually do. Typically we see the number of sales and prices bottom out in January or February. Sales were way down in both of those months this year, but due to limited inventory and strong demand, prices did not fall. In fact, both the average sales price and the median sales price hit record highs in February, which is typically the month where prices are the lowest!
The average home price hit $427,651 in February which was 16% higher than the same month last year. The median price was $340,000 which was 17% higher than last year. I’ve been tracking the Mecklenburg County real estate stats very closely since 2004. This is the first time I’ve seen the average price in February exceed the peak price from the previous summer. Spring has definitely come early this year.
If history is an indicator, we will see prices continue to rise into this summer. This might be worrisome to many as it seems that prices are rising too quickly. Prior to the great recession of 2008, real estate had historically risen 3-4% on average. If you compare the average sales price in February of this year, to the same month ten years ago, the average rate of return is about 7%. Considering that prices in 2011 were the bottom of the market after a horrible market real estate crash, that rise in prices does not seem unreasonable. Couple that with the incredibly low interest rates and we find that affordability has not been nearly as affected as one might think.
I will be very interested to see where prices go in the next six months as we head towards summer. It is an amazing time to be an owner of real estate and if you are thinking about selling, I have never seen a better time. For buyers, the low interest rates still making buying right now a smart decision. As always, we are here to help.
We’ll send out our E-Newsletter this week summarizing all the stats comparing single family home sales in Mecklenburg County for February to the previous month and the same month last year. Here’s a sneak peak:
- Average home sales are down 3% from last month and 6% from last year.
- Average sales price is up 4% from last month and 16% from last year.
- Median sales price is up 3% from last month and 17% from last year.
- Average price per square foot is up 4% from last month and 17% from last year.
- Average time on market is up 36% from last month, but down 43% from last year.
- Pending sales are up 14% from last month and 11% from last year.
- Supply is up 9% from last month and down 17% from last year.
- Mortgage rates at 2.81% are about the same as last month, but down from 3.74% last year.
- Average house payment is up 5% from last month and 7% from last year.