Charlotte Inventory Data June 2022
Hi everyone,
With the talk of a shift on everyone's mind, I thought I'd share some hard data for the area.
We look at supply as an indicator of what type of market we're in. 6 months of inventory is considered a 'balanced' market, where neither the seller nor the buyer have an advantage in negotiation. More than 6 months is a buyer's market, less than 6 months, a seller's market. For perspective, 2012 was the lowest point for Charlotte housing market after the recession in 2008. In April 2012 we had over 11 months of inventory. At our lowest point, we were at less than 1 month! (February 2022).
In the Charlotte Metro, months supply of inventory has gone UP consistently in the last 3 months. We're still super low (1.4 months for June) but that gives me hope that the craziness of the last 3 years is easing up.
Is a bubble bursting here? I don't think so. A bubble bursting would look like prices going down. They're not. Average and Median prices are still climbing, albeit at a slightly slower pace than last year. We're still solidly in a seller's market and will be for a while until inventory comes up, giving buyers more options.
I'd love to hear what you're seeing in the market!
I am seeing inventory climb, CLT seems to be a bit behind schedule compared to PHX, Dallas, Socal, Florida, Seattle areas on how fast its growing. Big areas of concern for me in CLT are Lake Norman area and the outskirts. CLT has a large mortgage lending / banking industry that is likely to be hurt in this downturn.
I personally would not buy a flip or any investment property in any market in the US without planning for a 10-15% price reduction when it comes time to sell it based on current comps.
@Tim G.why is the Lake Norman area a concern for you? Because of the banking industry in Charlotte? I wasn't quite sure of your correlation and just wanted to make sure I was following your thinking.
Quote from @Tiamo Wright:Couple reasons, first the factors that affect all real estate right now. Then my other concerns are values jumped significantly there, second home activity was high. People moving with remote work.
@Tim G.why is the Lake Norman area a concern for you? Because of the banking industry in Charlotte? I wasn't quite sure of your correlation and just wanted to make sure I was following your thinking.
Those are some factors I see that would concern me about that area. Also if Charlotte values drop, anyone who was looking outside of the city might have better options ahead as inventory grows and prices correct.
Thanks for sharing. Always love listening to folks thought process on their investing.
Quote from @Tim G.:Tim,
I am seeing inventory climb, CLT seems to be a bit behind schedule compared to PHX, Dallas, Socal, Florida, Seattle areas on how fast its growing. Big areas of concern for me in CLT are Lake Norman area and the outskirts. CLT has a large mortgage lending / banking industry that is likely to be hurt in this downturn.
I personally would not buy a flip or any investment property in any market in the US without planning for a 10-15% price reduction when it comes time to sell it based on current comps.
Could you elaborate further on your comment of why you think the banking industry is going to hurt in Charlotte? It is such a huge sector here and in my opinion continuing to grow but I would definitely want to understand it from your perspective. Thanks!
Quote from @Tim G.:
I am seeing inventory climb, CLT seems to be a bit behind schedule compared to PHX, Dallas, Socal, Florida, Seattle areas on how fast its growing. Big areas of concern for me in CLT are Lake Norman area and the outskirts. CLT has a large mortgage lending / banking industry that is likely to be hurt in this downturn.
I personally would not buy a flip or any investment property in any market in the US without planning for a 10-15% price reduction when it comes time to sell it based on current comps.
inventory is climbing, and at the same time our demand has not gone down that much compared to other markets because the reasons for Charlotte growth are organic. It's not inflated. We're not a huge second/vacation home market. Honestly, of all the places in CLT to be concerned, I'm not worried about Lake Norman at all. The infrastructure is there to support the homes and families living there. It's other far out towns that worry me more since you drive out there and there's nothing but new subdivisions. The shopping/restaurants/businesses haven't grown with the residential development. That's not true of Lake Norman IMO.
CLT does have a large banking sector, but that is not the biggest employer in the area, I don't even think it's top 5. Charlotte has done a lot of work attracting other industries to the area, including manufacturing, IT, etc. Tech jobs have grown 68% since 2010. Take a look at https://charlotteregion.com/in... which has a ton of data on the growth of industries and business in the CLT area. Charlotte learned a lot from the 2008 recession and has worked hard to diversify to prevent another huge hit to our economy.
From what I've seen, there are a lot of price reductions. Buyers are pickier than they were a year ago. We're going back to strong seller's market, reduced from a gangbusters, ridiculous seller's market. Remember back when buyers wanted updated, move in ready homes? We're back to that. If a flip is done well and priced correctly, it will likely still get multiple offers. I'd say the time when cutting corners on flips is over. Do it right the first time, and there is still profit to be made. There's no data to support the assumption that prices will drop overall. In fact, the median price is still climbing.
Inventory in Charlotte is definitely up! As of July 9th (per Canopy MLS data), inventory is up 22.5% to 5,773 properties. With that being said, there will be slightly less competition for price compared to what we've seen over the last two years.
If the market starts to turn, I see Charlotte being one of the last markets impacted. With over 100 people moving to Charlotte per day, we are super blessed to be in a hot market. Interested to see how it all pans out.
@Jack Delligatti I never thought I'd be excited by 1.5 months worth of inventory but here we are! Under contracts were up from May to June, so buyers are still buying. And we have increased listings, but still far from a buyer's market.