– Charlotte real estate market named one of the top 5 cities to outperform in 2020
– Millennials will now make up more than half of the buyers
– Baby Boomer Seller trend is only just beginning
– Low interest rates aren’t going anywhere
– Market is still years away from an adequate supply of homes
– Expect more bidding wars in 2020, especially in entry level priced homes
– Election will slow the market next year, but only temporarily
Ranked as one of the top five cities to outperform in 2020, with an estimated 44,000+ new residents last year, it is not surprising that Charlotte is one of the hottest growing cities in the country. In the National Association of Realtors (NAR) Research Group, Charlotte was the only city in which every participant agreed it would outperform. Other cities on the list, such as Dallas, Las Vegas, Charleston, and Raleigh, all had at least one participant of the group who felt the city might not outperform.
There is strong job growth in Charlotte; it is outpacing the national average, which is driving folks to move here. This is compounded by the Northeast region and many coastal cities pricing out young buyers. Mid-sized markets such as Charlotte are attracting millennials and baby boomers alike; millennials are moving for jobs and boomers are moving to be near grandkids or for better retirement lifestyle.
With the influx of folks moving here, we will continue to see increased demand and insufficient supply, and as the inventory evaporates, the prices will continue to rise. It is estimated that Charlotte’s pricing will go up 5-7% in 2020, which is greater than the 2-4% we have seen the last two years.
The housing market is sensitive to mortgage rates, so we saw a small dip in late 2018 that carried into the beginning of 2019, but the rates are low again and will not be going anywhere in 2020. Coupled with the growth in Charlotte, we could see a marginal re-acceleration.
Buyers, however, are still frustrated with lack of choices and low inventory, so we continue to see more hesitation from buyers. Multiple offer situations create buyers who lost out or feel like they overpaid. My team and I have already experienced two different multiple offer situations in 2020 (it is January 14th!).
Clients, neighbors, and friends often ask the health of the market and if we are in a bubble or not. There won’t be a crash like last time. There will be (and we may have already seen it) some normalization, but there is good economic news that will better the housing market against a significant price contraction. We are in year nine (average is seven) of an upward cycle in housing, but we have yet to produce excess supply of inventory. With continued low interest rates and a strong job market, pricing is only going up in Charlotte.
Regarding 2020 being an election year: past election years show that buyers and sellers are hesitant to enter the market immediately before and after election day, but it’s a temporary pause. There is not expected to be a significant impact on the national housing market overall, and certainly not one here in Charlotte.
If you’re considering buying or selling, give me a shout. Or if you want more information on your neighborhood’s specific performance over the last year, please feel free to reach out!
Thank you all again for your business and support.