Expect Rising Prices, But Watch Supply

I’m a little late with my blog post this month and that’s because it’s getting harder and harder to keep up with the pace of the new market. In just a few short months, the Charlotte real estate market has made a dramatic shift from buyer’s market to seller’s market. 2012 closed with a strong finish and 2013 is off to a great start. Right now the key statistics for Mecklenburg County are showing that 2013 is going to be a year of sold home sales and rising prices.

The shift has been amazing to watch. In a very short time, a seller’s experience has gone from not being able to find a buyer to having multiple offers to choose from. The issue in our market is no longer about being able to get a home sold, but rather it has become a problem of finding enough inventory to satisfy the buyer demand.
This week we are sending out our monthly E-Newsletter with the stats for Mecklenburg County. All stats point to a market that is beyond strong. Arguably, it has also shifted from one extreme to the other. The number of home sales is heading back to the levels they were at during the peak and prices are up over 10% since last year. As inventory levels remain low, you can bet that prices will continue to climb until supply and demand come back into balance.

Here’s a quick summary of the numbers when comparing January to the prior month and again to January of 2012:
– Home sales are down 7.6% from last month, but up a whopping 48.5% from last year.
– Average sales price is down 8.1% from last month, but up 11.0% from last year.
– Median sales price is down 1.3% from last month, but up 12.6% from last year.
– Average time on market is down 7.7% from last month and 14.3% from last year.
– Pending home sales are up 16.5% from last month and 27.0% from last year.
– Supply is up 4.3% from last month, but down 29.5% from last year.
– Mortgage rates are steady from last month, but down almost ½ point from last year.

Right now, I’m paying closest attention to housing supply numbers. As long as supply remains low, prices will continue to rise. And prices will only begin to plateau when supply comes into balance or starts to rise again. Interesting, you can see that supply has actually gone up from December 2012 to January 2013. This is very normal this time of year as many sellers will list right after the holidays. During the normal course of the year, supply should rise slightly through spring and then drop off again in mid-summer and into fall. But if supply starts rising faster than normal, it would be an indicator that the current recovery is slowing. Right now there are no signs of that happening.

It’s still a great time to be a buyer as interest rates are at record lows. But the opportunity to get a record low price is in the past. It’s a fantastic time for sellers as properties are selling quickly. 2013 should be a terrific year for real estate and I for one am excited to be part of it.

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