2023 is expected to be a record year in the Charlotte real estate market. In this video, I discuss some of my key predictions for the market this year.
#1 Growth and Appreciation
The market experienced double-digit growth in the past two years, and this year I don’t think that’s going to happen again. We’re still going to grow, but the pace of appreciation will slow down in 2023.
The Federal Reserve’s decision to raise interest rates drove intense demand in 2022 as buyers rushed to find homes and secure mortgages with a low rate. If rates continue to stabilize this year, the market is likely to transition to a more normal market, and less of this “Covid crazy market” where everyone was rushing to get a house.
The last couple years were historically low interest rates that we’ve never seen before, and no-one knows if we’ll ever see them again. Now that we’re sitting where we are, in the 5-6% range, we’re still going to see growth, but not as rapidly as in previous years.
#2 Inventory Levels
Low inventory usually means high demand and low supply. I still think we’re going to see relatively low inventory levels in Charlotte this year compared to the rest of the country. What that’ll look like is going to vary across different price points.
At the entry level price point, we may see more inventory because buyers are going to be much pickier at that price point. They may not want to live in some of those neighborhoods or deal with some of the issues in the homes that they’d have to deal with. With interest rates higher, it costs more money to buy these homes with a loan, and because of that, buyers are going to be pickier.
Shifting into the meat of our market, which is anything from $400-$500k up to $600-$700k, inventory should still remain low. These buyers oftentimes come from dual-income households or are moving from more expensive markets out of state where Charlotte is still very affordable. If buyers are flexible about where they want to live, they usually can find a home that checks all their boxes in this price range, which means inventory will still remain low.
In the luxury market, I predict that we’re going to see more inventory because there are going to be less buyers at that price point. However keep in mind that for buyers moving from more expensive markets out of state, our luxury price point will still be affordable for them. So the best homes in the luxury price point are still going to fly off the market, but the others might sit a little longer.
#3 Market Conditions
In Q4 of 2022, most real estate professionals didn’t speak highly of market conditions. This year, if interest rates remain stable, the market is expected to stay in a more normal state. However, if the Fed decides that they’re going to drop rates this year, real estate professionals are going to change their tune.
Opportunities for Buyers and Sellers
Last year in our 2022 Predictions video, we talked about how inventory was going to be super low and demand was going to be very high. I think that compared to the rest of the country, Charlotte is still going to be a low inventory, high demand city this year. If your home is staged well, priced well, and located in a great location, it’ll still sell fast and for top dollar.
Last year all the homes that weren’t like that were still selling for top dollar because people were desperate to buy homes at a lower interest rate. That’s different now, so if you’re home doesn’t check every box, be prepared to work with buyers because they’ve got more negotiation power.
If you’re a buyer in the Charlotte market, it’s a great time to buy. You’ve got less competition and more opportunities to find homes that better suit your needs.
If you’re a seller in the Charlotte market, it is still a good time to sell if you have a reason to sell. If you’re moving, getting divorced, inheriting a home, etc, you can still sell your home for a great price. There are still lots of active buyers in Charlotte who are ready to buy your home.
If you’re in the market to buy or sell in Charlotte, contact Andy Griesinger – Charlotte NC’s Top Realtor – to learn how he can help you maximize the value of your real estate transaction.