Highlights from this report:
- A new report ranked the nation’s biggest housing markets by the rate of first-offer success.
- Charlotte, North Carolina was ranked #1, followed by San Jose and Minneapolis.
- In Charlotte, 70% of home buyers closed on the first house they made an offer on.
- Despite this, housing inventory in Charlotte is still below what is considered to be a “balanced” market.
Charlotte Had Highest ‘First-Offer Success Rate’
According to a report published this month by the national real estate brokerage Redfin, 56% of home buyers nationwide who bought a home in the first quarter of 2019 closed on the very first home they made an offer on. That’s up from 52% a year earlier, marking a slight uptick in home buyer success.
But some cities and metro areas performed even better. In those areas, a higher percentage of buyers closing on the first home they made an offer on.
The Charlotte, North Carolina housing market was ranked #1 among the nation’s major metro areas, having the highest “first-offer success rate” during the first quarter of 2019.
According to an accompanying news release: “The report is based on an analysis of home offer and purchase data from thousands of people who bought homes with Redfin agents nationwide over the past five years.”
Many cities across the country are now seeing a higher first-offer success rate. This is the latest sign of an ongoing shift within housing markets nationwide.
As we reported last month, there’s a general shift occurring in many real estate markets (including Charlotte). In these areas, housing conditions are beginning to favor buyers over sellers. That’s a departure from the past few years, when tight inventory conditions and soaring demand gave sellers the upper had in negotiations.
In an April 2019 report entitled, “Shift to More Buyer-Friendly Conditions Chipping Away at U.S. Home Sellers’ Years-Long Advantages,” the real estate information company Trulia also noted this trend. They too named Charlotte, North Carolina as one of those markets currently undergoing a “shift toward buyers.”
Key distinction: There’s a difference between a classic buyer’s market and one that is starting to shift toward favoring buyers. The housing inventory situation in Charlotte prevents it from being a true buyer’s market, as of spring 2019 at least. But this could change over the next year or two.
Inventory Still Tight in This Real Estate Market
Despite the reported shift toward buyer’s market conditions, the Charlotte real estate scene still has a relative shortage of housing inventory.
According to the latest MLS data and real estate reports, Charlotte had about a 2.7-month supply of homes for sale as of March 2019. The broader metro area (which includes Concord and Gastonia) had a 3-month supply during that month. Both of those figures are well below the 5- to 6-month level that economists consider to be a “balanced” market.
It seems unlikely that the inventory situation in the area will change significantly anytime soon. According to a March 2019 article from The Charlotte Observer:
“New construction isn’t keeping up either. Housing market research firm Metrostudy found that Charlotte has the lowest inventory of new housing out of any of the cities it surveys across the country, including places like San Francisco with white-hot markets.”
Despite this inventory lag, local housing conditions in Charlotte do appear to be shifting in favor of buyers. Those buyers who enter the market later this year or in 2020 could have more negotiating leverage, compared to those who purchased over the past couple of years.
Home-Price Growth Slowing, But Not Stopping
Like many real estate markets across the country, Charlotte, North Carolina has experienced a slowdown in home-price growth over the past year or so. But this is merely a return to “normal” appreciation levels, following a period of above-average gains.
In April, the real estate research team at Zillow wrote:
“Charlotte home values have gone up 7.7% over the past year and Zillow predicts they will rise 4.9% within the next year.”
The median home price in the area was around $225,500, as of April. That was right on par with the national average for that same month.
Population Growth Boosts Housing Demand in Charlotte
Population growth, meanwhile, has created steady demand within the Charlotte real estate market. The city — and the broader metro area — have outpaced the nation over the past decade, in terms of population growth.
From 2010 to 2018, the estimated population of the Charlotte-Concord-Gastonia grew by an average of 43,550 per year. That put it well ahead of many other major U.S. cities.
According to a 2018 report from HUD: “As of May 1, 2018, an estimated 977,800 households reside in the Charlotte HMA [Housing Market Area]…”
Population growth tends to increase demand for housing, on both the rental and purchase side. This helps support home values. So, while home prices have slowed down in the Charlotte real estate market, they are expected to continue rising for the foreseeable future. And population growth has a lot to do with those forecasts.