Monday, January 30, 2023

Charlotte homebuyers overpaying by more than $100k, study finds


CHARLOTTE, N.C. (Axios) – 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.

» Related: Viral TikTok shows the increase of home prices in Charlotte

A home in Plaza Midwood was listed for $585,000, but sold for $740,000.

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.

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.

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