Another year of real estate sales is almost over. 2016 started hot as the strong, year-end finish of 2015 rolled right into the new year. Last year was a great year of continued recovery, yet the year over year home sales were up every month except two in 2016. At the beginning of the year it was uncertain whether or not 2016 would be the year where the market cools off a little. That certainly did not happen. This past year in Charlotte real estate has been defined by low inventory, which has lead to record numbers of multiple offer situations, which has resulted in rising prices. Over the course of the 2016, prices continued to rise month after month as compared to the prior year. We will finish out 2016 with prices around 5-10% higher than last year.
Its always fun for me to look back at archived blog posts of mine to see what I was thinking this time last year. Interestingly, in my blog for December 2015 I wrote about a recent Fed rate hike and its expected impact on mortgage interest rates. Pretty funny considering that I could probably cut and paste that post and use it again today! Just recently, the Fed hiked rates again for the first time since 2015. Last year, when the Fed rate went up, the mortgage interest rates had already anticipated the jump. The highest mortgage rates we’ve seen in the past 12 months were in December of 2015. Right after the Fed hike, mortgage rates dropped slowly and bottomed out in July. Then they jumped back up in November in anticipation of the December raise (surprise!). So if last year is any indication, this recent Fed hike does not necessarily mean rising mortgage rates.
In January 2015 I wrote about low supply in the market and a prediction that inventory would rise in the spring. It did rise slightly for a few months then towards the end of the year it dropped right back where it started. So we finish 2016 in about the same place as we did last year in terms of housing supply.
The first half of the year for sales were steady and strong, but the numbers almost seemed to suggest that the market was ready to level off. Then, in the second half of the year, the market picked up momentum and hasn’t taken a break. Now, we are at the end of 2016 and my sentiments about 2017 are about the same as they were around this time last year. The market has shown great strength for several years now. Prices and sales are up, all due to strong demand and low inventory. Markets move in cycles and 10% appreciation in real estate is not sustainable long term. I think 2017 will be another solid year for real estate, but a plateau has to be in our future.
This week we’ll publish the market stats for our monthly E-Newsletter. Here’s a brief summary of the current market comparing November’s sales to both the prior month and the same month last year:
- Home sales were even with last month but up 27% from last year.
- Average sales price was up 4% from last month and up 10% from last year.
- Median sales price was even with last month, but up 6% from last year.
- Average price per square foot is up 2% from last month and up 3% from last year.
- Average time on market was up 16% from last month, but down 7% from last year.
- Pending sales were down 9% from last month but even with last year.
- Housing supply was up 9% from last month, but down 12% from last year.
- Mortgage rates jumped up almost .25% from last month but are still down from last year.
- The average house payment is up 8% both from last month and last year.
Happy Holidays to all! See you next year!