Fix-and-Flip
August 29, 2022

Market Conditions in North Carolina

The real estate market in the Charlotte area is experiencing some changes, but local real estate professionals say this is nothing to worry about just yet. Real estate investors looking to flip houses in the North Carolina should remain optimistic about the market.

After years of rising sales and prices, a dip in home sales in the Charlotte area is most likely a slight correction.

Since the Great Recession, home sales have been on an upward trend in Charlotte. However, one of the most detailed reports by RealtyTrac shows that in March 2019 home sales dropped about 6% from February and nearly 11% from a year earlier.

Housing analyst Todd Porter attributes this slight downturn to a lack of inventory for buyers to choose from. He also noted that fewer people put their homes up for sale because many sellers were waiting for prices to go up even more before selling their houses.

Despite these recent changes, real estate observers expect the housing market will continue its upward trajectory as long as interest rates remain low or fall further than they already have (they're currently at 3%).

The National Association of Realtors reports that existing-home sales are down nationwide.

The National Association of Realtors reports that existing-home sales are down nationwide. While this is bad news for sellers, it may be good news for you as a buyer. Here's what's going on:

  • The number of homes available to buy is decreasing because many homeowners have chosen to stay put during the downturn, with some waiting longer than usual before moving out. This has reduced inventory and caused prices to rise further. (It's the classic supply and demand conundrum.)
  • In addition, investors have been purchasing cheap foreclosed properties and renting them out for profit rather than letting them sit vacant or selling them at a loss, which contributes to inventory shortages in certain areas—especially those where there was heavy speculative buying during boom times such as Charlotte's Plaza Midwood neighborhood on North Davidson Street near UNC Charlotte campus."

For the fourth straight month, median home prices are also down.

Median home prices are also down. Again, what this means is that half of homes sold in the past month were priced above their median value and half were priced below it. This is not a good thing for homeowners, who would like to see their homes rise in value. But it's okay because...

Median home prices are down nationally: In other words, this isn't just happening in North Carolina—it's happening across America as well! How can we be so sure? Well...

Median home prices are also down from last year: The numbers tell us that the average price of a house has gone down by 1% since April 2018 (the end of last year). And if you've been paying attention to your math class at all since kindergarten, you know that means they're still flat compared to March 2019, when they were essentially unchanged from February 2019 (which was basically unchanged from January 2019).

So if we add these two things together we get...

The number of Charlotte area homes on the market increased by 1.3 percent from December to January. That's about 700 additional homes for sale across the region.

The number of Charlotte area homes on the market increased by 1.3 percent from December to January. That's about 700 additional homes for sale across the region.

The increase was driven by demand in both starter and luxury home sales, according to MDA DataQuick. The addition of so many new listings is great news for buyers looking for a home in one of our popular neighborhoods such as Dilworth or Myers Park!

Regionally, the Southeast saw the second-highest decrease in January. Home sales were down 14.2 percent compared to December 2017 and 3.8 percent compared to January 2017.

Regionally, the Southeast saw the second-highest decrease in January. Home sales were down 14.2 percent compared to December 2017 and 3.8 percent compared to January 2017. Only the West saw a larger decline at 17.3 percent compared with December and 5 percent compared with last year's levels.

In addition to a strong economy, continued population growth has helped fuel housing demand across different areas of North Carolina and other states in our region," said William Hall, president of Hall Realty & Insurance Agency Inc., headquartered in Wilmington, N.C. "Also, interest rates remain low relative to historical norms."

Local real estate professionals say we shouldn't start worrying just yet.

"I don't think we should be worried," says realtor Robert Risley of the Raleigh-based Keller Williams Realty. "The housing market has been strong for a long time and we're going through a cyclical period that's not uncommon."

Raleigh is booming with new residents and new business, which Risley says will continue to drive demand for housing. "People want to live here," he says. "It's affordable and people enjoy living here, which makes it easy for both buyers and sellers."

Real estate agents are reporting higher sales volumes in all markets statewide, from big cities like Charlotte to small towns like Hendersonville in Avery County, where homes are being snatched up quickly at record prices thanks to solid job growth across North Carolina (the state currently boasts an unemployment rate of just over 5 percent). The work of fix and flip investors in invaluable in these markets. Newly renovated inventory is highly desirable and sold quickly.

Conclusion

There's nothing to worry about yet. For one, the Charlotte region still has a shortage of homes for sale and a strong demand for them. Prices aren't going down much either — just slightly — so it's unlikely that prices will be affected by the dip in sales. The opportunity for fix-and-flip investors in still very strong in North Carolina. Junegrass Lending is still originating hard money loans in Charlotte and will continue to do so.

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