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Why Home Buying In Charlotte Is Tough

If you are looking for a starter home and are having a hard time finding something in your price range, there’s a reason for that. The beginning of the second quarter of 2017 is seeing a seller’s market – real estate prices are up and interest rates are still relatively low. This means that those with a limited amount to put down on a house cannot afford some of the higher prices, leaving them to continue renting.  Let’s dive into why home buying in Charlotte is tough at the moment.

A Vicious Circle

This is problematic for more than those looking for starter homes. Those who are ready to sell their starter homes and move up to a larger home cannot afford the higher prices of homes that are the next step up. Thus, they are staying in their homes, which means less starter homes are on the market.

Furthermore, all of the investors who bought properties at rock bottom prices are continuing to rent, since the rental market is at a high. Rents are high, and people are paying those rents, so the investors do not have motivation to sell their investment properties. This also removes some of the affordable housing off the market.

Why Home Buyers Are Not Necessarily Getting the Better End of the Deal

The average price of a starter home in the Charlotte area is in the $250,000 range. Since prices have gone up, it will take longer to build equity in a property, especially since the current trend must break at some point. In an article written in April 2016 for the Charlotte Observer, Mark Vitner, a senior economist for Wells Fargo, and Mike Ortlip, the senior vice president at Grandbridge Real Estate Capital, and Louis Stephens, the managing director at JLL were predicting that uncertainty and risks could cause the market to fall. Thus far, that hasn’t happened. If the market continues at its current rate, buyers will be able to build equity, but over a longer time.

Increase in Job Opportunities and the Housing Market

The current trend is mixed-use development. This means that apartments and shops are in the same building. This increases job opportunities, but also creates more rentals. Mixed-use developments are not going up in cities – they are taking spaces in suburban areas, and are now being classified as “urban-suburban” areas.

According to Stephens, mixed-use was still new to the Charlotte area in 2016, but developers have learned that millennials and the city wants. The mixed-use developments push housing out even further into rural areas, which means that there is even less housing that is affordable for starter homes or those who want to move from their starter home to something larger.

Finding the Perfect Property at the Perfect Price

While these changes in the market make it more difficult for people to buy starter homes and for those in starter homes to upgrade, it’s not impossible. Buying a mid-range starter home gives you a better chance to build equity and have the ability to upgrade in a few years. The better job market also brings new money into the area and may cause salaries to increase since employers may be willing to pay more for quality employees to ensure that new businesses thrive.

It may take longer to find the perfect property for you, but if you work with a real estate agent who knows the market inside and out, such as the agents at On Point Carolinas Realty, you will find the perfect property at a price that is in your price range. Our agents scour the markets for properties that become newly available so that we are able to let you know as soon as a property hits the market, whether it’s our listing or not.

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About The Author
Gus Testa

Gus Testa, Top Realtor with On Point Carolinas Realty, LLC, has been in real estate sales and management since 1977. In 1993, after leaving family, friends and his owned real estate franchise firm behind, he and his wife Beth made the decision to “head South” with their 2 sons. Since that time there has been no looking back. Gus immediately began working for a local and well respected new home builder, building beautiful neighborhoods in and around the Charlotte area. In his first year of new home sales he was awarded “Rookie of the Year” for the highest volume of sales for the company. Then in 2002, it was time to move on and Gus joined major developer Crescent Resources as one of their Residential Sales Associates. From 2002 through 2012, Gus along with his business partner Kim McBee, continually sold several million dollars in volume and became very familiar with the movers and shakers in the Real Estate industry in and around the Lake Norman area, the Charlotte area and the Northern most portions of South Carolina. In 2013 Gus and Kim partnered with a local developer to open On Point Carolinas Realty, LLC; a full service real estate company, listing and selling new and re-sale homes and home sites. Gus holds licenses in both North and South Carolina.

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