Trends in Foreclosures in the Charlotte Real Estate Market

According to local specialists, despite the numerous challenges facing homebuyers and sellers across the country, the Charlotte real estate market is expected to have a solid year.

Mark Vitner, chief economist at Piedmont Crescent Capital, mentioned in a statement that, along with other industries, Charlotte’s real estate sector will continue to experience growth throughout the rest of the year and will continue to adapt well to the post-pandemic era, with significant job growth and business expansion across the Charlotte metropolitan area.

Vitner also reported that the local economy is adding jobs in numerous areas. Non-farm employment increased by 3.3% last year, while the unemployment rate dropped to 3.2%, highlighting the area’s economic strength. On the other hand, the financial services sector slowed due to rising interest rates.

Vitner added that employment growth coincides with the fact that Charlotte receives thousands of new residents every year. A recent survey ranked North Carolina as the fourth state and Charlotte as the third city in the United States in terms of new residents, with nearly 45,000 people moving to the metropolitan area last year.

According to recent studies, Charlotte’s growth is being driven by young, college-educated workers and older residents—parents moving to be closer to their children and grandchildren.

Mortgage Rate Outlook

Mark Vitner believes that most Charlotte homeowners, likely with mortgages below the current national averages, are hesitant to sell due to rising costs. He explained that most homeowners with mortgages are locked into rates of 5% or less, below the current rate of 6.50%, according to data from the National Mortgage Database.

“It’s understandable that these homeowners are reluctant to sell, as their housing costs would rise significantly even if they downsized. The proportion of mortgages with low rates is likely higher in Charlotte, given the region’s strong growth during the low-rate era following the financial crisis,” said Vitner.

A recent analysis by New Western, a real estate investment firm, found that 57% of local investors in single-family rental homes expect their business to grow by at least 25% this year. In an interview, Brandon Chesley, their senior general manager, said that the outlook for the rest of the year is better than the last two years but cautioned about the housing supply, which remains tight nationally, with little chance of a significant drop in mortgage rates.

Other experts agree, saying that significant decreases in mortgage rates are not expected in the short term.

Apartment Growth and Housing Demand

Apartment construction is booming in Charlotte, which continues to experience rapid growth in apartment complexes, including multifamily housing developments, with a figure close to 33,000 under construction currently, and at least 17,000 expected to be completed this year. Many of these are along the light rail line from South End to Pineville and northward through NoDa to the university area.

The demand for new construction is high, but it is also important to understand its limitations, such as affordability, tightened credit, and a shortage of buildable lots in some high-demand areas. As for existing home sales in the Charlotte metropolitan area, they have declined year-over-year for 24 months, dropping 17.3% last year to 41,546 homes, primarily due to low housing inventories.

Overall, Vitner expects Charlotte’s economic outlook to remain strong, with job growth, population increases, and real estate investment. Vitner concluded by saying, “Addressing challenges like land shortages and housing affordability is crucial for long-term prosperity and quality of life. Builders are looking for redevelopment opportunities closer to the city, constructing single-family homes and condominiums. Prices are high, pushing first-time buyers to the suburbs, where land is more affordable.”

Available Foreclosures: 

Charlotte: 150 homes available. 

Concord: 30 homes available. 

South End: 20 homes available.

By Elias DaSilva | October 9, 2024.