As 2014 draws to a close, I look back over the past year of real estate sales in Charlotte. The market has returned to a place of stability for the time being and for the most part, 2014 looks a lot like 2013 did. Looking ahead I see controlled and sustainable growth. There are three major factors that define the state of the market as of December 2014.
1) Low inventory
2) Rising prices
3) Low interest rates
The combination of these three factors makes for a very rare situation. It is good time to both buy AND sell real estate right now. As a seller, there is low inventory and solid demand and prices are at their all time highs. This means getting an excellent price for your home in a reasonably short period of time. For buyers, the low interest rates mean an affordable payment that is very, very unlikely to go any lower. Prices are likely to continue on a slow and steady upward climb, likely based on a historical 3-5% increase per year.
Before the Great Recession of 2008-2010, real estate price NEVER fell from a national average standpoint since they started being tracked in the 1940s. However, our new recent perception based on the last several years is that housing prices can fluctuate much like the stock market. Not so. The Great Recession was caused by a perfect storm of events that ended with many homes going into foreclosure. It was the high foreclosure rates that ultimately caused prices to decline so dramatically. Current lending guidelines are very strict and the likelihood of another round of high foreclosures in the near future is extremely low. History does tend to repeat itself, but those days are a long way off. (By the way, next time I’ll be ready! Who else wishes they bought more real estate in 2011? Its amazing how quickly prices recovered.)
Over the past year, we’ve had many buyers waiting on the fence to make a purchase. Regretfully, they have watched prices rise and are realizing that the home they could have purchased last year is no longer within their reach. This means ultimately making compromises just to get into a house they can afford.
The spring market will turn up more inventory as it always does and hopefully enough to satisfy demand. But based on recent trends, the pent up demand will gobble up the well priced listings and prices will continue to climb. Buyers would be well served to recognize that the best deals were in the past and that not acting soon could result in an ultimately higher price AND interest rate.
There is a great deal of caution in the market right now. It is that caution that is keeping the market from becoming another bubble. The volume of sales activity occurring in today’s market is well over 30% less than it was during the bubble years of 2005-2007. That volume was not sustainable but today’s volume is.
Charlotte has a lot of things going right now. We are an amazing city full of vibrancy and growth. The rest of the country continues to take note of what is happening here and that means nothing but strength for the real estate market in the foreseeable future. W Realty Group is proud to be a part of helping families to become integrated in the community here and we looking forward to serving many of you in 2015. Happy Holidays, Happy New Year!
PS….for more details about current market stats, check out the market stats page at http://www.wrealtygroup.com/market/stats/