When I was a kid I always knew there was something important to talk about, or very possibly I was in trouble, when both my parents were quietly sitting at the kitchen table saying we need to talk. Well, imagine I’m sitting at the virtual kitchen table and telling you, my readers, we need to talk about the real estate market in Charlotte right now. Things they are a changin’, and with rising interest rates and high inflation the real estate market is responding as it does. Real estate ebbs and flows but there is always opportunity buyers and sellers just need to be on the right side of the market.
Yup, no surprise right now this is a huge player in what’s going on. Loan buyers, especially first-time homebuyers, have really taken a beating over the last few years and now they have to deal with rising interest rates. The current interest rates at the time of writing this blog are:
- 30 year fixed conventional 5.539%
- 30 year fixed FHA 5.512%
- 30 year fixed VA 5.078%
Although these rates are significantly higher than the lowest rates of 2.75% seen in 2020-2021, these rates are still historically low. Honestly, my first real estate purchase in 1998 had a 9% interest rate. Still, some economists predict that mortgage rates could cause year over year home price growth to slow to zero by this time next year .
The rising interest rates are putting a chokehold on the seller’s motivation to move. Sellers are more dug-in than ever. That’s keeping the inventory still very low.
Cash is king!
Hopefully, buyers have saved money to have at least the 20% down or more to buy down interest rates and not have to pay PMI (Private Mortgage Insurance). If you are fortunate enough to have a stock of cash. Pay cash.
Sellers are liquidating excess property.
I have worked with several sellers that own property in Charlotte and live out of State. There is a general concern about the market slowing way down. Some Sellers with excess property want to cash in before the interest rates go up too much more. This may mean a bit more inventory to choose from.
New construction is also helping inventory, though not enough to prevent a slowdown according to an economist with the National Association of Realtors.
Higher interest rates usually mean a price adjustment down. Let’s hope the prices do slow or dip just a bit for the first-time homebuyer. There are programs to help first-time buyers specifically, like this one in South Carolina for front line workers or this one in North Carolina.
Don’t fret just be aware.
My buyers are still buying homes they love. Sellers are still selling and getting a great price. We always anticipate the worst and things usually never get as bad as we expect. Just look for the opportunities. You aren’t in trouble. There WILL be opportunities coming our way as the market shifts.
Now don’t you feel better after we had this chat?
If you want to talk about what this market means for you and whether or not now is the time to buy or sell or invest, then give me a call. I’ll share my insight with you.