If you’re keen to invest in the Charlotte real estate market, you must read till the end. 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 housing market. It’s one of three cities leading the gain in the S&P CoreLogic Case-Shiller National Home Price Index, which is considered the “gold standard” for tracking appreciation. Nationally, home prices rose 3.5% in November 2019. Charlotte came second with a gain of 5.2%.
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. Is Charlotte going to be a sizzling real estate market for investors in 2020?
The Charlotte real estate market isn’t cooling off as yet. Charlotte 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 appreciation rate in the latest quarter was around 1.48% which equates to an annual appreciation rate of 5.92%.
You can choose to market your home to potential buyers. Any homeowner looking to cash out and sell off their property should do it in the current phase. It is better to avoid the price decline phase that will accompany the coming correction. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control.
Please note that there are many variables that can potentially impact the value of a home in Charlotte (or any other market) and some of these variables are impossible to predict in advance. In this article, our focus will be on the current state of the Charlotte real estate market and how it can affect the investors and home buyers.
Charlotte Real Estate Market Forecast 2020 – 2021
What are the Charlotte real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Charlotte has a record of being one of the best long term real estate investments in the U.S. Since 2015, the median home prices in Charlotte have appreciated by roughly 45.2% from $172,000 to $249,707, according to Zillow’s index.
In the past year, the Charlotte real estate appreciated by 4.5%. The latest Charlotte real estate market forecast is that the home prices will continue to increase by 3.8% – in the next twelve months. The latest real estate data from Zillow shows that the current median home value in Charlotte is $249,707. Charlotte is currently a warm seller’s real estate market. The demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. In other words, there are less homes for sale than there are buyers in the marketplace. Zillow reports that 13.7% of the listings in Charlotte had a price cut in Jan 2020.
Here is the Charlotte real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 3.8% till Jan 2021.
Charlotte Housing Market Forecast 2021
Here is a short and crisp Charlotte housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Charlotte is 88% and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in Charlotte is 88% during this period. If this price forecast is correct, the Charlotte home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Charlotte Housing Market Forecast..
Charlotte Housing Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Charlotte area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Charlotte is a minimally walkable city in Mecklenburg County with a population of approximately 727,822 people. High demand and low inventory in the Charlotte housing market led to the significant price rise in 2019. In the past ten years, the annual real estate appreciation rate has amounted to 3.95% in Charlotte, according to NeighborhoodScout.com. This puts Charlotte in the top 20% nationally for real estate appreciation.
Charlotte was ranked fourth-hottest U.S. housing market in 2018 as prices and rent kept going up. It 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.
On average, homes in Charlotte sell after 56 to 64 days on the market. The trend for median days on market in Charlotte has gone up since last month, and slightly down since last year. In a healthy, balanced market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, the Charlotte market can tip to favor buyers if the supply increases to more than six months of inventory. However, looking at the current trends, we don’t see things stopping anytime soon. The inventory will decrease further and there may be a 3.8 percent increase in home prices in Charlotte by Jan 2021.
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
According to Neighborhoodscout.com, a real estate data provider, three and four bedroom Single-family detached are the most common housing units in Charlotte. Other types of housing that are prevalent in Charlotte include large apartment complexes, duplexes, row houses and homes converted to apartments. The median house price in Charlotte is $233,118, which indicates that home prices in Charlotte are near the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods in or around Charlotte.
Charlotte Real Estate Inventory And Sales Data
Charlotte has a mixture of owner-occupied (53.09%) and renter-occupied (46.91% ) housing units. In the past month, 1059 homes have been sold in Charlotte on Redfin.com, a national real estate brokerage. Additionally, there were also 553 condos, 631 townhouses, and 19 multi-family units for sale in Charlotte last month. The median listing price is around $325,000. The average sale price of a home in Charlotte was $260,000 in Feb 2020, up 9.5% since last year. The average sale price per square foot in Charlotte is $142, up 10.1% since last year.
According their statistics, the Charlotte housing market is moderately competitive. Homes sell for about 2% below list price and go pending in around 56 days. A hot listing in the market can sell for around list price and go pending in around 30 days.
As per the housing stats released by the Charlotte Regional Realtor Association, a total of 3144 homes were sold in Charlotte in Feb 2020 as compared to 3035 in Feb 2019 – which is an increase of 3.6%. The year to date (Jan 2020 – Feb 2020) sales recorded were 6126, which is up (+7.7%) from 5690 sales (Jan 2019 – Feb 2019). The total available of homes for sale in Charlotte in Feb 2020 was 6757, which equated to 1.5 Months Supply of Inventory.
Currently, there are 1460 homes for sale in Charlotte on Zillow, an online real estate database company. Additionally, there are 987 homes for rent. Under potential listings, there are about 6 Foreclosed and 235 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS). The median list price per square foot in Charlotte is $153, which is higher than the Charlotte-Concord-Gastonia Metro average of $136. The median price of current listings in Charlotte is $292,000 and the median price of homes that have been sold is $256,000. The median rent price in Charlotte is $1,500, which is higher than the Charlotte-Concord-Gastonia Metro median of $1,495.
At present, Trulia has 2561 resale and new homes for sale in Charlotte, NC, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sales price of homes in Charlotte is $263,000 and homes are selling for about $159/sqft.
There are currently 4028 homes for sale and 2094 homes for rent in Charlotte on Realtor.com, a real estate listings website. According to their statistics, in January 2020, the Charlotte housing market was a balanced real estate market, which means there was a healthy balance of buyers and sellers in the market. In January 2020, the median list price of homes in Charlotte, NC was $294.9K, trending up 1.7% year-over-year. The median listing price per square foot was $151. The median sale price was $255K. Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Charlotte have managed to hold good leverage in these negotiations in the past month. On an average, they could sell homes for 98.67% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
The asking price of single family homes in Charlotte can start from $68,000 and can go up to $7M for a luxury property located in Eastside neighborhood. Eastside is an expensive neighborhood in Charlotte with the median price of $235,000. Myers Park has a median listing price of $1.2M, making it the most expensive neighborhood in Charlotte. Coulwood West is the most affordable neighborhood, with a median listing price of $222,500.
|Homes For Sale||4028|
|Homes For Rent||2094|
|Median Listing Price||$294,900|
|Median Sale Price||$255,000|
|Sale to Asking Price Ratio||98.67%|
|New Construction Houses||793|
|Median Listing Home Price/Sq Ft||$151|
|Home Price Range||$12K to $9M|
|Most Expensive Neighborhood||Myers Park|
|Most Affordable Neighborhood||Coulwood West|
Charlotte Foreclosures And Bank Owned Homes Statistics 2020
As per the Charlotte foreclosure data by Zillow, in Charlotte 0.5 homes are foreclosed (per 10,000). This is lower than the Charlotte-Concord-Gastonia Metro value of 0.7 and also lower than the national value of 1.2. The percent of delinquent mortgages in Charlotte is 1.2%, which is higher than the national value of 1.1%. The percent of Charlotte homeowners underwater on their mortgage is 6.3%, which is higher than Charlotte-Concord-Gastonia Metro at 6.0%.
There are currently 1,070 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 2,136. In January 2020, the number of properties that received a foreclosure filing in Charlotte, NC was 31% higher than the previous month and 32% higher than the same time last year.
|No. of Foreclosures in Charlotte||1070 (RealtyTrac)|
|Homes for Sale in Charlotte||2136|
|Median List Price||$260,000 (3% drop vs Dec 2018)|
In Charlotte, the zip code with the highest foreclosure rate is 28278, where 1 in every 619 housing units is foreclosed. 28269 zip code has the lowest foreclosure rate, where 1 in every 886 housing units becomes delinquent.
Is Charlotte a Good Place For Real Estate Investment?
Now that you know where Charlotte is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Is Charlotte a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Charlotte is good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2020.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Charlotte real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Charlotte that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Let’s take a look at the number of positive things going on in the Charlotte real estate market which can help investors who are keen to buy an investment property in this city.
1. The Job Growth in Charlotte
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. Charlotte’s unemployment rate was 3.1% in Dec, 2019 as compared to 3.8% in Dec 2018. The US average is 3.9%. 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. Between 2018 and 2019, Charlotte saw a 2.3 percent increase in jobs, adding more than 27,300 jobs year over year. Future job growth over the next ten years is predicted to be 45.2%, which is higher than the US average of 33.5%.
2. It is Relatively Affordable for Investors
Home prices in Charlotte 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 $33,209 and the Median household income of a Charlotte resident is $53,274 a year. The US average is $53,482 a year. This prices many out of the housing market, since median rent is roughly $1,500 a month. If you do the math, you’ll find that with an average household income of $53,482 and a median list price of $292,000, the Charlotte area sports a price to income ratio of 5.45. In other words, it’s just as unaffordable here as it is for those living in New York or Denver.
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. Charlotte’s 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 in Charlotte
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. 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.
9. The Redevelopment in Charlotte 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 Charlotte Real Estate: Advice For New Buyers
Maybe you have done a bit of real estate investing in Charlotte, North Carolina but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. 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.
A good cash flow from Charlotte investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Charlotte real estate investment opportunity would be a key to your success. If you invest wisely in the Charlotte real estate, you could secure your future.
The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Charlotte investment real estate and you should be able flip it for a lump sum profit.
The neighborhoods in Charlotte must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools and shopping malls. Some of the best neighborhoods in or around Charlotte, North Carolina are Ballantyne West, Highland Creek, Provincetowne, Myers Park, Beverly Woods, Cherry, Eastover, Barclay Downs, Elizabeth, Dilworth, Foxcroft, NoDa, Madison Park, Cotswold, Greenville, Sedgefield, South End, and Belmont.
As with any real estate purchase, act wisely. Evaluate the specifics of the Charlotte housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Charlotte. If it is your first time to invest in Charlotte real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Other Good Markets To Invest in Real Estate in 2020
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.
Let Us Help You In Buying Your First Investment Property In Charlotte
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
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*Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Charlotte real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
- Mobile homes
- Quality of life
- Landlord friendliness
- Property taxes
- Latest Market Trends and Statistics