After a record-breaking year in 2021 that flowed into the first half of 2022, the real estate market has shifted. The early signs came this past summer, and the fall market confirmed that buyers and sellers are in much more of a “wait and see” mode. It may be a bit bumpy this year, but I feel this market will offer some opportunities that we haven’t had in the past two years.
In Charlotte, it is unlikely that Spring 2023 will feel the same as it did in 2021 and 2022 in terms of price growth, but I believe our prices won’t move too much. Other markets around the country may feel some depreciation, but our city has a lot going for it to stay current and stable. Fortunately, for most of you reading this, you live in Charlotte, an area consistently ranked as one of the nation’s fastest-growing cities, and where outsiders moving in still think our real estate is affordable.
The more challenging market for sellers seems to be the under $1M range. This market, of course, includes first-time homebuyers, but it also covers many move-up buyers who still need to obtain financing. The increased interest rates have definitely played a role in their “wait and see” mode, slowing down buyer movements. It certainly has not pulled them out of the market entirely, but they are lending more consideration to the right property and various financing options. They may try to put down a larger down payment in exchange for a lower rate or consider a five-year ARM with the option to refinance in the future. For buyers, it’s amazing to think they actually have an opportunity to think longer than a few hours on a home they viewed, as well as being able to negotiate with the seller. We will see a little less of the $100k over asking price offers, fewer appraisal or inspection waivers, and not as many sky-high due diligence fees this spring!
On the flip side, the $1M+ market may be more challenging for buyers. I think two major factors play in here: one, these folks are usually sellers too, and have owned their current home for multiple years, have tons of equity, big job promotions, and other accessible assets; and two, if they are moving from out of town, it is usually from the West Coast or Northeast, where they sold a multimillion-dollar home, and can now buy something better (meaning bigger, newer, and closer to town) than where they are coming from… sometimes with all cash! Not having to depend on financing and shifting interest rates means the slower mode that exists for financing buyers isn’t happening at this cash level.
Overall, the team and I are continuing to see that the importance of the right home is still more important than a slightly higher interest rate. Your home is where you raise your kids, where you rest and rejuvenate, and where life’s most precious moments happen. And after experiencing the pandemic, that importance has become that much more crucial!
With inventory still very limited in Charlotte, I believe 2023 will be one of great opportunity for buyers and sellers alike. It’s good to be living in Charlotte, and after a little bit of a pause in the fall, we are excited to see what 2023 brings!
Thanks for all the support from our clients, friends & family! Happy New Year to all.
Cover Photo: Discover CLT