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Is Charlotte The Hottest Real Estate Market For Investors In 2019?

Charlotte Real Estate Market Overview

When someone considers investing in real estate, attention tends to drift to the hot markets like San Francisco or the places those residents are fleeing to due to the high cost of real estate. In other cases, investors focus on the “cool” places people want to be and assume that will yield a good return on the investment. We’ve taken the time to look for the better long term opportunities, and that brought us to the Charlotte real estate market. Charlotte is the largest city in North Carolina. The city proper is home to more than 800,000 people. The Charlotte metropolitan area is even larger – home to roughly two and a half million people. It is one of the country’s fastest growing metro areas, and it was the second fastest growing city in the southeastern United States. Only Jacksonville, Florida was growing faster between 2004 and 2014. The Charlotte housing market is a hot market for investors whether they want to renovate and flip, buy to hold and rent or invest in multi-family properties.

Charlotte Real Estate Market

Charlotte Real Estate Market Forecast 2019

Zillow, in a new report, named Charlotte the fourth-hottest U.S. housing market in 2018 as prices and rent keep going up. Charlotte was ranked in the top 10 in another forecast for 2018, coming in at No. 7 in a Realtor.com prediction. Like many fast-growing cities, the housing market in Charlotte has been defined by tight inventory, rising prices and climbing rent. As per Zillow.com’s data, the median home value in Charlotte is $212,100. Charlotte home values have gone up 8.9% over the past year and Zillow predicts they will rise 6.5% within the next year. The median list price per square foot in Charlotte is $144, which is higher than the Charlotte-Concord-Gastonia Metro average of $129. The median price of homes currently listed in Charlotte is $285,000. The median rent price in Charlotte is $1,445, which is lower than the Charlotte-Concord-Gastonia Metro median of $1,450.

Charlotte Real Estate Market Forecast 2019

Graph Courtesy – Zillow.com

Charlotte Real Estate Market Trends 2018

Charlotte real estate market trends indicate an increase of $15,000 (7%) in median home sales and and a 0% rise in median rent per month over the past year. The average price per square foot for this same period rose to $147, up from $136. Trulia has 4,302 resale and new homes in Charlotte lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.

Charlotte Housing Market Summary:
  • Median Sales Price: $235,000
  • Price Per Sqft: $147
  • Homes For Sale: 4,302
  • Median Rent Per Month: $1,445
  • Median Household Income: $54,542
  • Home Owners: 62%
  • Single Residents: 37%
  • Median Age: 35
  • College Educated: 46%
  • The median rent per month for apartments in Charlotte for Sep 1 to Oct 1 was $1,445.
  • The median sales price for homes in Charlotte for Jun 27 to Sep 26 was $235,000 based on 3,637 home sales.
  • Average price per square foot for Charlotte was $147, an increase of 8% compared to the same period last year.

As per the housing stats released by the Charlotte Regional Realtor Association, a total of 4,514 homes were sold in Charlotte in August 2018, which is down (-6%) from 4,800 a year ago. The year to date (August 2018) sales recorded were 32,961, which is down (-1%) from 33,307 a year ago. The total inventory of homes for sale in Charlotte (Aug 2018) was 10,052, which gives about 2.4 Months Supply of Inventory.

Charlotte Real Estate Trends

Table Courtesy – Charlotte Regional Realtor Association

As per Redfin.com’s data, Charlotte housing market is very competitive. Homes for sale in Charlotte typically receive 2 offers. Charlotte listings sell for about 1% below list price and go pending in around 42 days. Hot properties in Charlotte, NC can sell for about 1% above list price and go pending in around 24 days. The average sale price of a home in Charlotte was $230K last month, up 13.9% since last year. The average sale price per square foot in Charlotte is $126, up 14.5% since last year.

On Movoto.com, the median list price in Charlotte is $359,900. The median list price in Charlotte was less than 1% change from September to October. Charlotte’s home resale inventories is 2,693, which increased 0 percent since September 2018. The median list price per square foot in Charlotte is $166. September 2018 was $167.
Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in October.

Charlotte Real Estate Market Trend 2018

Graph Courtesy – Movoto.com

Charlotte Foreclosures And Short Sales 2018

Foreclosures will be a factor impacting home values in the next several years. In Charlotte 2.0 homes are foreclosed (per 10,000). This is greater than the Charlotte-Concord-Gastonia Metro value of 1.4 and also greater than the national value of 1.6. The percent of delinquent mortgages in Charlotte is 1.8%, which is higher than the national value of 1.6%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Charlotte homeowners underwater on their mortgage is 10.3%, which is higher than Charlotte-Concord-Gastonia Metro at 8.0%.

Charlotte is the largest city in North Carolina. The city proper is home to more than 800,000 people. The metropolitan area is even larger – home to roughly two and a half million people. It is one of the country’s fastest growing metro areas, and it was the second fastest growing city in the southeastern United States. Only Jacksonville, Florida was growing faster between 2004 and 2014.

As per RealtyTrac.com, there are currently 1,343 properties in Charlotte, NC that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 2,631. In August, the number of properties that received a foreclosure filing in Charlotte, NC was 95% higher than the previous month and 40% higher than the same time last year. Home sales for July 2018 were down 35% compared with the previous month, and up 58% compared with a year ago. The median sales price of a non-distressed home was $230,000. The median sales price of a foreclosure home was $0, or 0% higher than non-distressed home sales.

10 Best Charlotte Neighborhoods With Highest Appreciation: From NeighborhoodScout.com

Appreciation rates for homes in Charlotte have been tracking above average for the last ten years, according to NeighborhoodScout data. The cumulative appreciation rate over the ten years has been 21.28%, which ranks in the top 30% nationwide. This equates to an annual average Charlotte house appreciation rate of 1.95%. Here are the top 10 appreciating neighborhoods in Charlotte:

  1. E 3rd St / S Mcdowell St
  2. S Kings Dr / S Independence Blvd
  3. East Blvd / South Blvd
  4. South Blvd / Hartford Ave
  5. Central Ave / Hawthorne Ln
  6. Eastway Dr / Arnold Dr
  7. Hawthorne Ln / Belvedere Ave
  8. Central Ave / Saint Julian St
  9. New Life Theological Seminary / N Davidson St
  10. Grace St / Parson St

10 Reasons To Invest In the Charlotte Real Estate Market

1. The Job Market

Why do people move to an area? They may relocate because they want to retire there or they think it is safer. However, the general reason people move to – or away from – an area is economic opportunity. North Carolina’s unemployment rate dipped below 4% in August, 2018. The area’s historically strong economy explains why roughly 100 people a day move into the area. And that propels demand for the Charlotte real estate market.

2. Its Affordability for Investors

The median home/condo in Charlotte was worth $200,000 in 2016. Home prices here are somewhat more expensive than the rest of North Carolina but affordable when you look at national prices. Detached homes cost around $300,000, townhomes around $200,000. You can buy duplexes roughly $400,000. Three and four unit structures cost around $120,000 apiece. This makes the Charlotte real estate market a particularly good value for real estate investors.

3. Demographic Momentum

Charlotte has a median age of 34, several years younger than the national average. That is because many people are moving here for work. This means the Charlotte real estate market is going to see demand from both people moving here for work and young adults who stay and raise families here; young adults who come here for school and work will eventually move up in the Charlotte housing market, whether in the city or in the suburbs. The fact that the city is a top destination for Millennials guarantees long-term growth for the Charlotte real estate market.

4. Quality of Life

Charlotte, North Carolina ranks rather high in the U.S. News rankings of the best places to live. They were ranked 22nd in both on the list of best places to live and best places to retire. Other places ranked higher on desirability, sometimes due to a “coolness” factor that brings people to Austin, Texas. Charlotte’s good score was due to the availability of jobs, overall value, amenities and safety of the community.

That will attract people who may not be moving specifically for work and lead many who were raised here to stay. This suggests the Charlotte real estate market is going to remain strong even if the local economy isn’t so hot in the future. The huge demand for homes in Charlotte provides uncommon stability in its housing market. There are also intangibles such as quality of life and strong southern comfort than can’t be measured by metrics. Residing in the south usually equates to easy living, but few southern cities offer Charlotte’s stable housing market.

5. The Mobile Home Market

We’re not going to spend time gushing about the upper end of the Charlotte housing market. Instead, we’re going to address a market that is generally overlooked, the affordable options in the Charlotte real estate market. Per-capita income in Charlotte is around $35,000 a year. This prices many out of the housing market, since median gross rent was roughly $1000 a month in 2016. The solution for many is staying in a mobile home. Mobile homes cost around $40,000 a year, still out of reach for many would-be renters.

The relatively mild climate of the Carolinas eliminates the problem of keeping mobile homes warm in the winter, as well. The Carolinas contain large number of mobile homes, so they’re considered an acceptable alternative for many renters. Nearly 20% of homes in South Carolina are mobile homes, and 17% of homes in North Carolina are. Yet there are relatively few people building mobile home parks, though they’re still regularly installed on private rural land. Given the incredibly high ROI of mobile home parks due to their low maintenance requirements, we couldn’t neglect this unique aspect of the Charlotte real estate market.

6. Landlord Friendliness

North Carolina is considered landlord friendly. The state doesn’t have notice of entry laws. A written agreement is recommended by not mandated for leases that last less than a year. There’s a five day grace period before you can assess late fees on rent. You don’t have to have a rental license to be a landlord. The state doesn’t have rent control or rent regulation. If they don’t pay the rent, you can begin eviction on the 11th day. If they violate the lease, especially for criminal offenses, there’s no need to give notice and the eviction process is expedited.
A new law makes Charlotte even more landlord friendly. A law that passed in the summer of 2018 allows landlords to recover attorney’s fees and court costs from tenants when the eviction goes to court. Therefore, one of the reasons we recommend the Charlotte housing market is the fact that you won’t own a property where the tenants aren’t paying rent for months while you rack up insane legal bills.

7. Low Property Taxes

South Carolina has the sixth lowest property taxes in the U.S. North Carolina did worse at 22nd out of the 50 states, but that’s certainly better than neighboring Georgia; that state was literally average at 25th place. You would pay a little more than locals if you’re an out of state land owner.
Factor in its cheaper than average real estate, though, and you’ll pay an average of $1300 a year in property taxes on a South Carolina property. Compare that to the median $2700 bill in Texas, $3300 you’d pay in Wisconsin, $4000 you’d be billed in Illinois and the whopping $7600 bill for a home in New Jersey.

8. Its Overall Balmy Tax Climate

Property taxes are but one aspect of a state’s tax code. South Carolina has relatively low overall taxes. If you’re buying property as a corporation, their top corporate income tax rate is 5%. However, if the corporation counts as a pass-through business, you may be able to get the income taxed at the flat rate of 3% instead. The top individual income tax rate is 7%. This is better than the national average. In fact, South Carolina’s per capita tax rate is one of the lowest in the country according to the Census Bureau.

9. The Diverse, Sizable Student Market

Being the largest city in the state guarantees there’s a sizable university in town. Charlotte boasts several of them. The University of North Carolina has a campus here, of course. Queens University of Charlotte, Davidson College, Johnson C. Smith University and two dozen others are located in and around Charlotte, North Carolina. You could buy up apartment buildings in and around massive campuses or literally next door to smaller schools like Johnson and Wales University.

10. The Redevelopment in Downtown

Charlotte is seeing a wave of redevelopment of downtown. Properties along transit corridors are eligible for grants and special privileges. The city has targeted specific corridors for redevelopment like Rozzelles Ferry Road and Beatties Ford Road. North Charlotte, too, is slated for redevelopment. If you buy up properties in the vicinity and renovate them, you could either rent them out at higher rates in the future or sell them at a sizable profit. The interesting opportunity lies in the car-free city center that could result in rundown buildings becoming upscale properties. That project is called the North Tryon Vision Plan, and it covers a sixty acre, 50 city block area.

Investing In the Charlotte Real Estate Market In 2019: The Conclusion

Charlotte Housing Market

If you are a beginner in the business of real estate investing, it very important to read good books on real estate. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Charlotte, NC. One advantage to living in a big city like Charlotte is the constant demand for homes. Buying a home in Charlotte is a better investment, depending upon several factors. There are so many major companies and professional sporting events that people will always be interested in residing here. Therefore, interested investors aren’t likely to allow the listing prices to get to low before they swoop in and take advantage.

Similarly, the St. Louis real estate market is red hot! Homes are selling fast because inventory is low, creating a banner selling season for homeowners looking to move. If you’re looking for an amazing opportunity, the St. Louis real estate market can’t be beat. There are many opportunities in the St. Louis real estate market to investors regardless of who you want to target for renting or selling a newly renovated home. St. Louis is old enough to have aging inner-ring suburbs. You can find redevelopment opportunities in suburbs like University City, home to Washington University in St. Louis. About 800 acres are slated for redevelopment in University City. Wellston is receiving funds from HUD specifically for redevelopment.

Another housing market in Texas to go for diversifying your investments is the Austin real estate market. The Austin housing market may be one of the more expensive ones in the state of Texas, but it stands out for its large rental market and high rental rates. It is an excellent place to invest in real estate in the Lone Star State. Homes in Austin are 23% cheaper than the national average. It may be the second most expensive housing market in the state with a median home price of around $350,000, but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment.


References:

Demographics
https://en.wikipedia.org/wiki/Charlotte,_North_Carolina
http://www.city-data.com/city/Charlotte-North-Carolina.html

Mobile homes
http://www.statemaster.com/graph/hou_per_of_hou_uni_tha_are_mob_hom-housing-percent-units-mobile-homes
https://www.reonomy.com/blog/post/how-to-invest-in-mobile-home-parks

Quality of life
https://realestate.usnews.com/places/north-carolina/charlotte

Landlord friendliness                                                                                      https://www.avail.co/education/laws/north-carolina-landlord-tenant-law                        https://portcitydaily.com/local-news/2018/06/30/heres-how-north-carolinas-new-eviction-fee-law-changes-things-for-landlords-and-tenants

Property taxes
https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/

tax climate
https://taxfoundation.org/state/south-carolina/
https://carolinaliving.com/financial-matters/south-carolina-taxes

University
https://www.collegesimply.com/colleges-near/north-carolina/charlotte/

Redevelopment
http://charlottenc.gov/ED/Development/Pages/Corridor.aspx
https://www.bizjournals.com/charlotte/news/2017/02/17/developments-planned-for-north-end-neighborhoods.html
https://nextcity.org/features/view/charlotte-moves-toward-a-car-free-city-center

Market Trends And Forecast                                                                                          https://www.zillow.com/Charlotte-nc/home-values                                    https://www.trulia.com/real_estate/Charlotte-North_Carolina https://www.realtytrac.com/statsandtrends/nc/mecklenburg-county/charlotte        https://www.movoto.com/charlotte-nc/market-trends            https://www.redfin.com/city/3105/NC/Charlotte/housing-market                      https://www.carolinahome.com/market-data/monthly-reports

Best Neighborhoods In Charlotte                                              https://www.neighborhoodscout.com/nc/charlotte/real-estate


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