Residential resale prices are up 5.6 percent year over year in Charlotte, a little less than the national average, but a strong showing nevertheless. Charlotte has traditionally seen more moderation around highs and lows than cities like San Francisco or Miami.
The national average for December 2016 over December 2015 was 5.8 percent.
According to the Charlotte Regional Realtors Association the median home sales price has increased 7.5 percent while closed sales in the area have increased 8.4 percent.
Seattle led the way with a 10.8 percent year-over-year price increase in December, followed by Portland with 10 percent, and Denver with an 8.9 percent increase.
Obviously this is great news for the local market. But tax reform, including a proposal that would double the standard deduction from $12,600 to $24,000 for a couple filing jointly, has some Realtors on edge.
Could that cause future buyers to rent instead of purchase?
“Interest rates continue to reside at historic lows so the mortgage interest deduction has remained minimal,” says Kathleen Kercher, luxury specialist at Re/Max Executive
“It is believed by many that most individuals would therefore opt for a standard deduction. Homeowners can still minimize their taxes by deducting their real estate taxes as well as other items pertaining to their home,” she says.
Inventory is still at record lows in many areas of Charlotte, so appreciation is almost a sure thing. In fact, Realtors say more people are flipping homes as prices continue their upward climb.
“Home ownership is often about gaining equity for your future. Home ownership still stands as one of the largest single investments most people will ever make in their lifetime—thus creating another reason to purchase when the time and situation are right for the buyer,” Kercher says.
Home prices are expected to increase at a slightly slower rate than in 2016. The October to November price increase in Charlotte was .3 percent; from November to December resale prices climbed .1 percent.
“Home prices continue to advance, with the national average rising faster than at any time in the last two-and-a-half years,” says David M. Blitzer, the managing director at S&P Dow Jones.
With all 20 cities in the S&P data base seeing prices rise over the last year, questions about whether this is a normal housing market or if prices could be heading for a fall are natural.
Looking at real or inflation-adjusted home prices based on S&P, the annual increase in home prices is 3.8 percent. Since 1975, the average pace has been 1.3 percent. Two-thirds of the time, Blitzer says, the rate is between -4 percent and +7 percent.
Home prices are rising, but the speed is not alarming, he says.
Diane Honeycutt, with Allen Tate in Concord, says the first two months of 2017 are off to a strong start “holding its own with 2016.”
Showings across all price points continue to increase, particularly in the luxury category with showings up dramatically. Inventory remains tight under $250,000 in Cabarrus County with extremely short market time if priced properly and staged to sell. “The luxury price point has a little longer market time but we are definitely seeing an increased activity and improvement,” Honeycutt says.
A lakefront house at 17811 Largo Place in Cornelius has sold for $871,000 after being listed at $975,000 by Jan Cameron with Allen Tate a year ago. The 3,400 square foot house on the property—a little more than three-fourths of an acre—is likely a tear down. Naturally, it has good views of the lake. The selling agent was Renee Hornor, with Mooresville Realty.
A 4,000 square foot house at 18502 Green Knoll Trace in River Run has sold for $890,000 after being listed at $900,000 by Bret Mastery of Lake Realty. The house, which has an in-ground pool and newly finished hardwoods, was on the market two weeks. The house has a two-story family room and a master on the main floor. The selling agent was Ryan Miller of Allen Tate.
A 3,600 square foot lakefront home at 8160 Mallard Road in Lincoln Forest has sold for $1.05 million after being listed at $1.14 million by Lee Ann Miller with Allen Tate. The house, which was built in 2008, has an outdoor fireplace, and a fourth bedroom complete with its own kitchen and private bath. The Craftsman-style house has exposed beams and double tray ceilings. Robyn Oakley, with Keller Williams, was the selling agent. It was on the market a little over three months.