Two North Carolina cities found themselves – again – ranked in the top 10 hottest United States real estate markets for 2022.
Zillow has ranked Raleigh third and Charlotte fifth out of the 50 largest U.S. metros, as some of the faster-growing markets of 2021, Austin, Texas, and Phoenix, were expected to slow somewhat this year. Tampa Bay, Florida, was ranked at number one overall for 2022.
The typical home value in Charlotte is $329,961, according to Zillow, and home values are forecast to rise 21 percent through November.
The housing market will slow a bit compared to last year, economists expect, but the market will remain a seller’s one. The usual seasonal cool down reappeared this fall as fewer homes were selling above listing price, homes were staying on the market a few days longer than they did in the summer and more sellers were cutting their price, the Zillow report said.
Those trends are expected to continue , but the market will stay on the seller’s side. Charlotte and Raleigh, along with other Sun Belt cities like Jacksonville, Florida, and San Antonio, Texas, saw home values increase, high job growth, fast-moving inventory and a big number of likely buyers.
The growth in home values was fueled by historically low mortgage interest rates and shifts among millenials and boomers who are retiring or downsizing. “At the same time, inventory of available housing has been limited, as builders play catch-up after years of under-building and sellers list their homes in fewer numbers,” Zillow reported.
“None of those trends is expected to change much in 2022 from 2021, and limited housing supply coupled with sky-high housing demand is a classic Econ 101 recipe for rising home values.” Larger cities like New York and Chicago are expected to fare OK this year, but have some of the coolest markets in the country, according to Zillow. Each has relatively fewer new jobs and less favorable shifts in demographics.
Will Charlotte’s House Market Cool Off?
In Charlotte, you can expect the housing market to remain a seller’s market. “We don’t expect a cooling off whatsoever,” said Lee Allen, president of the Canopy Realtor Association, which covers a 16-county region around Charlotte. The only way you’re going to get out that is if more inventory comes online, either from homeowners listing their houses or from new construction. Issues with the global supply chain have contributed to builders struggling to get supplies, Allen said, and that has contributed to lower inventory. Sellers, too, have held back a bit because they’re unsure about getting into their next home. It will take a long time to get back to “market equilibrium,” Allen said. A true market has three to five months of supply, or homes available for sale. Right now, it’s only in the days or weeks.
The growth in home values around Charlotte and elsewhere was fueled by historically low mortgage interest rates and shifts among millenials and boomers who are retiring or downsizing. Still, Allen said Charlotte continues to be an attractive place for people to move to, including for its quality of life, relative affordability and proximity to the beach and mountains.
He pointed to how people have options to choose to live in the center of uptown, along Lake Norman or in a small town like Fort Mill, S.C. “It’s the livability,” he said. “You can find something for everyone.”
Affordable Housing Concerns
In October, Charlotte ranked No. 6 for hottest housing market, according to the Urban Land Institute. Charlotte was listed as a “magnet” city, meaning it’s a destination for both people and companies. But the issue of affordable housing has worsened as U.S. home prices and rents bounced back after the worst months of the pandemic. Higher home prices strain younger households, including first-time home buyers, because they lack the savings needed for a down payment, the Urban Land Institute report found. That challenge is especially acute for many households of color,” the report states, “as the racial ownership gap has widened since the onset of the housing crisis and the Great Recession.” In recent months, housing inventory in Charlotte has been low, real estate experts have told the Observer.
This story appears courtesy of our media partner The Charlotte Observer.