Highlights from this real estate update:
- Forecasts suggest that home prices in Charlotte will continue rising in 2020.
- This housing market has experienced steady price growth in recent years.
- Population growth is a contributing factor, bringing more buyers into the market.
Charlotte, North Carolina offers a good quality of life, comparatively low home prices, and a strong local economy. And people have noticed. The city’s population has swelled over the past decade, bringing more home buyers into the market.
As a result of all this, home prices in the area continue to rise steadily, outpacing most other big cities across the U.S. A recent forecast for the Charlotte housing market suggested that prices will continue to climb for the foreseeable future.
Charlotte Housing Forecast for 2020: Better Than Average
The research team at Zillow recently issued a positive prediction for the Charlotte, North Carolina real estate market that extends into 2020. In late October 2019, the company stated:
“Charlotte home values have gone up 6.5% over the past year and Zillow predicts they will rise 4.1% within the next year.”
Both of those numbers beat the national average. The median home price for the nation as a whole rose by 4.8% over the past year. In October Zillow predicted the national median would climb by around 2.8% over the next 12 months.
So, in terms of annual home-price appreciation, the Charlotte housing market is currently outperforming the nation as a whole. This is largely the result of a supply-and-demand imbalance, as explained below.
The chart below, provided by Zillow, shows their estimate of the median home price for Charlotte, North Carolina going back nine years or so.
As you can see, home values in the area dipped slightly in the wake of the last recession. They turned north again in late 2012, beginning an upward climb that continues to this day. The company’s forecast for this housing market is shown in the green shaded area to the right.
This real estate market is outpacing other major cities as well. According to an October 2019 report from the property data company CoreLogic:
“Charlotte, North Carolina and Tampa, Florida follow Phoenix as the fastest-growing housing market in the 20-city index, with home price growth of 4.5% and 4.3%, respectively.”
Supply Shortage Making Things Tough for Home Buyers
Home buyers planning to enter the Charlotte, North Carolina real estate market in 2020 could be in for an unpleasant surprise. Supply remains tight in the area, forcing buyers to compete for a limited number of properties.
According to data provided by Redfin, a national real estate brokerage, the Charlotte housing market had a 2.4-month supply of homes for sale in September 2019. That’s significantly lower than three or four years ago, and well below what is considered to be a “balanced” market.
So from an inventory standpoint, the Charlotte real estate scene currently favors sellers over buyers. Those conditions could carry over into 2020 as well.
Data published by Canopy MLS last month showed that the inventory of homes for sale in the area dropped 17.5% in August from a year earlier.
The inventory decline was even more severe for properties priced under $250,000. That’s the “starter home” price range where first-time buyers tend to shop. Properties within that pricing bracket declined by roughly 25% over the past year or so.
Given the supply shortage in the area, it’s no surprise to see Charlotte housing market forecasts predicting additional home-price gains in 2020.
Tremendous Population Growth in Recent Years
Forecasters are predicting that house values across the Charlotte-Concord-Gastonia metropolitan area will continue to climb throughout 2020.
Population growth has a lot to do with that. This area has experienced above-average population growth over the past few years, and that brings more home buyers into the market.
According to the U.S. Census Bureau, the population for the city of Charlotte rose by a whopping 18.6% from 2010 to 2018. That was triple the growth rate for the nation as a whole, and roughly double the rate of growth for the state of North Carolina.
It was ranked as one of the fastest-growing cities in the U.S. from 2017 to 2018, and is now the nation’s 16th most populous city.
This trend has brought more home buyers into the Charlotte housing market over the past decade or so. When you factor in the supply shortage mentioned above, it’s easy to see why home prices in the area are rising steadily.
It’s a supply and demand story, as always. There are plenty of buyers in the local market seeking homes, but not enough properties to meet that demand. This puts upward pressure on house values.
Our View: A Good Time to Buy in Charlotte
Charlotte, North Carolina offers residents a strong local economy with an unemployment rate below the national average. The real estate market is stable with additional home-price growth projected through 2020. Mortgage rates, meanwhile, continue to hover near historic lows.
For these and other reasons, 2020 could be a good time to buy a home in the Charlotte area. But buyers will want to allow plenty of time for house hunting, given the lingering supply shortage in the region.
Disclaimer: This story contains predictions for the Charlotte, North Carolina real estate market stretching into 2020. Those forecasts were issued by third parties not associated with the publisher. Housing predictions are the equivalent of an educated guess, not a certainty.