Report signals looming slowdown for Charlotte's housing market

Though home sales increased across the entire Charlotte region in March, a slowdown inflicted by the novel coronavirus pandemic appears to be in the early stages, shows Multiple Listing Service data from last month.

Home sales totaled 4,254 in March, representing a 5.5% increase year over year, according to Canopy Realtor Association's monthly report on local existing-home activity.

But pending home sales, an indicator of buyer demand, reversed course in March, declining 2.8% year over year. That's quite different from January and February, when local activity for pending contracts posted double-digit year-over-year increases — rising 26.7% and 24.8%, respectively. Nearly 4,800 contracts were written in March — down 1.8% from February. In March 2019, pending sales had increased 13.8% over the year to total 5,345.

The report notes that, over the quarter, pending contracts are 7.3% higher than the same three-month period in 2019.

The average list price in March fell 1.3% year over year to $350,430, shows the report, which was released on Tuesday. The number of new listings, however, rose 1.8% last month to reach 5,933 homes.

Inventory continued to plummet, falling 25.3% in March with just 7,454 local homes available for sale. That leaves the region with a 1.7-month supply of homes on the market, compared to a 2.5-month supply in March 2019. While still near record-low levels, local inventory increased by nearly 700 homes from February.

Sales prices of local homes trended upward in March. Year over year, the average sales price of a Charlotte-area home increased 8.7% to $315,243, while the median sales price jumped 11.3% to $271,500.

Homes in the region spent an average of 45 days on the market before going under contract — six fewer days than the previous year.

The report, based on MLS data, encompasses housing activity for 16 counties in the greater Charlotte region. In addition to Mecklenburg, that includes 11 other counties in North Carolina — Alexander, Anson, Cabarrus, Catawba, Cleveland, Gaston, Iredell, Lincoln, Rowan, Stanly and Union — as well as four counties in South Carolina — Chester, Chesterfield, Lancaster and York.

The report includes more than a week of data when the housing market was still performing without the strains of the coronavirus outbreak. It wasn't until mid-March that the first positive COVID-19 cases in Mecklenburg County were reported. Since then, local and statewide stay-at-home orders have been implemented. The county's order, which went into effect March 26, includes more restrictive measures in regard to real estate brokerage services than that imposed by the state of North Carolina and many surrounding counties. Mecklenburg leaders have twice clarified the county's order as it relates to residential real estate, easing some restrictions and allowing some aspects of brokerage to be considered essential. Currently, Mecklenburg's order runs through April 16 while the state's is set to end April 29.

“First-quarter housing activity showed that the Charlotte region was poised for a strong start to the spring selling season. Unfortunately, we will not know the impact of COVID-19 on the local housing market until April’s data is available. We are hopeful that this crisis will not linger long into the summer months, as there are buyers still trying to purchase homes and sellers interested in selling," said John Kindbom, president of Canopy, a Charlotte-based trade group that represents just over 2,400 Realtor members.

While the full extent of COVID-19's effects on the housing market remains unknown, several in the local industry voiced confidence in Charlotte's ability to bounce back after the coronavirus passes.

Even before the coronavirus pandemic swept across Charlotte, Canopy warned that lingering inventory woes would continue to present challenges for buyers this spring during what's typically a busy time in the residential real estate industry.

Here's a look at how local home sales have trended over the past year: