First quarter 2019 saw an inventory increase, mainly due to home sales declining in Fall 2018 as mortgage rates rose to an eight-year high. In the early part of 2019, interest rates settled back down and homes sales picked back up. Interest rates have continued to decline, re-engaging the buyers, as many were on the sidelines at the end of the past year. Overall, home prices rose about 3.9% in 2018, will rise again about 2.3% this year, and are forecasted to rise 3.3% in 2020. Homes sales are expected to be flat this year, and then are predicted to gain about 3.7% next year.
Affordability has been a factor I have discussed in previous market updates. Incomes have been gaining at a pace closer to home-price growth as average hourly wages have also increased. With strong job growth, income and home prices are finally starting to align.
Charlotte, like many areas of the country, is still challenged by a low supply of inventory, especially in the in-town neighborhoods. Until the lack of supply of homes is resolved, I don’t believe we will see much change to the market. Yes, things have shifted in the buyers’ favor a little bit, but with prices still increasing and not enough homes to choose from, it is still very much a seller’s market.
