Charlotte homebuyers overpaying by more than $100k, study finds
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If you’ve purchased a house recently, you may have overspent by more than $100k, according to market trends.
The average home in Charlotte is selling for about 55% more than its expected amount, according to recent data released by the Florida Atlantic University (FAU) business school.
- Of note: This is not an analysis of how much homes are appraising for, as those numbers are determined based on the fair market value and calculated in a case-by-case scenario.
By the numbers: In April 2022, the average expected price of a home here was $239,803, according to FAU’s study. Instead, the average house was selling for $372,300 — about a 55% difference.
- One year before that, in April of 2021, the selling price was 21.5% higher than the average expected price.
- FAU researcher Ken Johnson tells me that home prices in Charlotte have been above the predicted pricing trend since March 2018.
- “The run-up in prices in the last couple of years is the highest in our data stream which goes back to 1996,” Johnson tells Axios.
Why it matters: This has been great news for sellers in Charlotte.
- Yes, but: Homebuyers are still navigating record-high prices, and now mortgage rates are up over 5%.
Zoom in: Two key factors happening in the housing market right now that support Charlotte’s home prices at this time — an influx in population and an inventory shortage.
- Johnson says these “help support Charlotte home prices, making a catastrophic housing price crash unlikely.”
- Plus, there are more people moving from larger metros who don’t have to adjust their spending habits for a similar or better lifestyle in Charlotte.
- On average, Charlotte buyers paid 102.9% of original asking price in May, or 2.9% over asking, per the latest from Canopy MLS. And one Charlotte realtor says her client was outbid on a Charlotte home by $150K.
Big picture: The prices will continue to grow as the demand for homes stays strong.
- 60% of experts say the housing market is heating up but not in a bubble, according to a recent Zillow survey.
- Many experts from the survey said they believe there will be a short recession by 2024 as the Federal Reserve works to tame inflation.
The bottom line: Charlotte buyers are paying a lot for their homes.
Editor’s note: An earlier version of this story incorrectly stated that homes sold for 102% over asking in May. This story has been updated to say homes sold for 102.9% of the original list price in May.