2020 is behind us and, at this point, we all likely know someone who has had COVID-19 and someone who has received the vaccine. While I will admit that there was some good for our family that came out of quarantine, we are all happy to move into this next year! It is safe to say, the virus has changed our lives forever.
As far as real estate in 2020, it boomed loudly, with everyone seeking more space at home for work, school, and outdoor sanctuary. My team and I had the privilege of selling 44 homes last year totaling over $24 million in sales.
The demand from buyers in a market with already below-average inventory caused Charlotte prices to soar. This shift in our growing market has lead Charlotte to rank #3 on Realtor.com’s list of Top Housing Markets in 2021. According to Realtor.com senior economist George Ratiu, who spoke to our local Realtor Association last week, “Over one-third of demand in Charlotte came from out of state. People are moving here for jobs, affordability, good weather, and quality of life.” So what do buyers & sellers have to be ready for in 2021?
5 Things to Expect in the 2021 Charlotte Real Estate Market:
1 – Multiple Offers
Just last month, my team and I listed four properties; ALL of them received multiple offers within hours of hitting the market! It is safe to say a seller’s market will continue into 2021. Buyers continue to seek more space both in the home and yard as well as wanting more outdoor amenities. Lack of inventory continues, as builders have not ramped up production and investors are not unloading properties, and Charlotte’s inventory is at a record low.
How do you compete? Get your ducks in a row early! If you need to sell a house before buying, then sell the house! You will have NO chance in a multiple offer scenario if you are contingent. If you don’t need to sell first but want the equity in your current home for the down payment, then get an equity line set up. And even if you have the luxury of buying before selling, start taking care of the checklist items around the house you are going to sell. Deals are moving faster than ever due to competition.
2 – Appraisal Issues
Prior to the pandemic, I had not had an appraisal issue since 2016; and it wasn’t something I was hearing other agents having issues with either. Since the pandemic, my team and I are having appraisal issues on multiple properties we are selling, often resulting in buyer and seller both having to give. This is due to multiple offer scenarios and buyers paying tens of thousands of dollars over asking. Over the last few months, we’ve seen more buyers offering appraisal contingencies, making their offers that much stronger.
3 – Rent Backs
You have to sell before buying, and we know the issue won’t be selling the house. The issue is finding the next house, and not ending up homeless between selling your current home and finding the next one. Enter “rent backs” – meaning you rent your current home back from the buyer that bought it from you. My team and I are currently negotiating rent backs for about fifty percent of the deals we are doing. Some of the rent backs are two weeks and some of them are up to three months. The timing piece of the buy & sell process we find to be one of the most stressful things right now for our clients. Our experience can help guide you through the timing terms of the deal, relieving some of that stress.
4 – Top Dollar! (but not for dated homes)
Sure, we are in a seller’s market with very little inventory for buyers to choose from, but this doesn’t mean the market will pay top dollar for every available home. Even in this market, about 40% of homes will not sell due to being overpriced given the updates needed. If you have sold your home with me, then you know I love to calculate the Odds of Selling as well as the Absorption Rate of your neighborhood’s inventory. Sellers are usually shocked to know the odds of selling are only about 60-70% even now. The takeaway here isn’t that you need to completely update your home. It is that having a solid pricing strategy is essential when entering the marketing, and my team can help you find that pricing sweet spot.
5 – Off-Market Sales
We do a handful of off-market deals every year, but I do expect to do more this year. In this challenging market for buyers, it is going to be even more important than ever that buyers work with agents who: 1) know their local market; 2) have a realtor network informing them of upcoming inventory; and 3) knows how to hustle to find off-market homes for their clients. I’ll be the first to tell my sellers that to drive the highest and best price, you need to expose the home in MLS. However, many of my seller clients who are working full time, parenting full time, virtual schooling full time, etc. are more than happy to take that off market deal and not have to deal with the on market process. I believe we will see more of this in 2021.
We are always here to help, answer questions or give guidance on any of your real estate needs. We truly believe that our relationship with our clients starts at that first sale. We expect you will reach out when you have questions about the addition you are considering, or what your home might appraise for on the refi process you’re starting. We are happy to pull comps and send them your way. It is truly an honor to be your real estate advisors; don’t hesitate to reach out.