Low Inventory – July 2019 – My HomeLeasing

What’s Driving Low Inventory In Charlotte?

Charlotte’s long slog out of the national recession has picked up speed in the last few years, and the city is reemerging as a destination for new residents from throughout the country and world. More than 37,000 more people moved into the Charlotte metro area than moved out in 2016, the most recent year for which United States Census data is available, up from more than 29,000 in 2013.

Newcomers, many of them post-college millennials arriving for entry-level professional jobs, have filled the thousands of newly-built apartment complexes in Charlotte’s close-in neighborhoods, such as South End and NoDa. At the same time, longtime homeowners are staying put, whether to recover financial losses from the recession or because they can’t find any comparably priced homes in the area.

“The boomers aren’t really trading down anymore,” Gentry says (former president of the Charlotte Regional Realtor Association). And that’s led to fewer houses coming onto the market. According to CRRA data, available home listings fell by 40 percent from 2012 to 2017, decreasing from 13,415 to 8,019 in the broader Charlotte area, with larger drops in Gaston (58 percent), Cabarrus (57 percent), and Mecklenburg (45 percent).

That’s all good news for sellers in the Charlotte area, who in 2017 managed to get more than asking price in 27 percent of sales, according to a report from Zillow. That’s above the national average of 24.1 percent, but nowhere close to Silicon Valley (nearly 70 percent of sales above asking) or Sunbelt rivals such as Dallas (nearly 40 percent).

Still, the tightening of Charlotte’s market has come remarkably fast, as the same Zillow study notes. In 2012, 9.4 percent of Charlotte-area homes sold for more than listing price, ranking Charlotte the 30th of the 35 cities studied. Five years later, only three markets—Columbus, Boston, and New York—outpaced Charlotte’s 187 percent growth in the share of above-listing-price sales from 2012 to 2017.

And in Charlotte, experts say, the competition is fiercest at the low-to-mid price range, either among young professionals looking to move out of apartments or cash investors looking to rent or flip homes in hot areas.

The tightened market at the low-to-mid price range may be leading to a new wave of growth in the suburbs.

“Those are your first-time homebuyers, and you’re starting to see them move farther and farther out,” Gentry says.

While growth along the light rail line has made headlines lately, previously slow-growing suburban areas such as Gaston County have also been home to new development and rising prices. That’s especially true south of Charlotte. In fact, only one county in the Charlotte area—Lancaster, South Carolina—has seen available home inventories increase since 2012. Renewed suburban real estate growth is changing the region’s geography.

Through 2013, Mecklenburg County’s rate of population growth outpaced all suburban counties in the area. Since 2014, Cabarrus, York, and especially Lancaster, which grew at a whopping 4.4 percent in 2016, have surpassed Mecklenburg.