Charlotte, North Carolina Deep Dive

If you are looking to invest in the North Carolina Housing Market, analyzing the North Carolina Housing market trends is critical to understanding and forecasting your profits and performance. Overall the state is known for the Carolina Panthers, Krispy Kreme donuts, and the Wilbur Brother’s claim to fame as being first in flight, but how does that translate to the housing market? The aforementioned is excellent when speaking about admirers of the city and tourists interested in being short-term residents. Still, there is more to it regarding the hard-core analysis of the housing market understanding the trends and demographics. 

Charlotte, North Carolina, is ranked as one of the most consistently growing cities in the United States. It is one of the 25 largest cities in the nation and the largest in its state.

Charlotte Housing Market Analysis

The Charlotte housing market is trending upward, a great sign for sellers. The housing inventory, which is at its lowest point in nearly two decades, has allowed homeowners to sell high and take advantage of the accumulated equity in their homes. However, what does a low inventory mean for buyers and investors who are currently eyeing the Charlotte housing market?

Housing Inventory

The Charlotte Housing market has been experiencing a relative decline since 2017. According to the graph, the inventory has experienced false or small bursts in an increase in housing stock, but they were relatively short-lived. The 2020 housing boom did not do justice to the already yo-yo inventory, as it contributed to a rapid decline, sending the market to its lowest inventory in years. 

Although Charlotte is dealing with an extremely hot seller’s market, stay focused and be strategic with offers. The market has been tight, wielding about two weeks’ worth of inventory, but with a solid expectation to have a looser grip in the coming months of 2022.

_{The count of active single-family and condo/townhome listings for a given market during the specified month (excludes pending listings).}

Value

The median value of owner-occupied housing units is $252,100

• about 10 percent higher than the amount in the Charlotte-Concord-Gastonia, NC-SC Metro Area: $233,900
• about 1.3 times the amount in North Carolina: $193,200

Along with the pandemic boom and lowered inventory came an increase in the average listing price on the Charlotte market. Following May 2020, the listing price saw a nearly 13% incline in the market, which strongly indicates that sellers are receiving over listing prices in the market.

Market Hotness: Median Listing Price

_{The median listing price for a market during the specified month.}

New Private Housing Units Authorized by Building Permits

This series represents the total number of building permits for 1-unit structure types. The 1-unit structure type is a single-family home or house. A single-family home or house types include fully detached, semidetached (semidetached, side-by-side), rowhouses, and townhouses. For attached units, each must be separated from the adjacent unit by a ground-to-roof wall in order to be classified as a single-family structure. These units also must not share heating/air-conditioning systems or utilities. Units built on top of one another and those built side-by-side that do not have a ground-to-roof wall and/or have common facilities (i.e., attic, basement, heating plant, plumbing, etc.) are not included under single-family structures.

A historical trend of the Charlotte housing market shows that private housing units have been on a relative incline before the unprecedented crash of the market in 2008. It has since reclaimed itself to rise in production. According to the graph, the steady incline has been promising, despite suffering a blow somewhat during the 2020 pandemic, which contributed to a housing boom in the Charlotte housing market.

Rental Rates and Short term rentals in Charlotte

The Charlotte housing market is rental friendly as it has many advantages working alongside it. The city has a large student population which poses a high demand for rental, along with the fact that there is no rental control rate restriction. On average, the market has maintained an 8% quarterly growth. 

The short-term rental sector has experienced a growth in popularity in the Charlotte housing market. Overall, there has been more interest in full home rentals than private room rentals, approximately a 67% difference, indicating that the demand for short-term rentals in Charlotte poses a cash flow opportunity in the North Carolina housing market.

Rental Rates

Short Term Rentals

Demographics

Charlotte, North Carolina, boasts a large population of more than 800,000 with a median age of 34 years of age. The city has an average household size that supports two incomes with a median income of $63,000.Although it suffered a steep unemployment rate at the heights of the 2020 pandemic, the rate has been on a rapid decline compared to the city’s incline in the number of available positions. 

Such growth could indicate the bounceback of the population in the city and the migration of individuals looking for new opportunities.

Population

_{All observations are July 1 estimates of each year.}

Income

$40,071 Per capita income

• about 10 percent higher than the amount in the Charlotte-Concord-Gastonia, NC-SC Metro Area: $36,374
• about 25 percent higher than the amount in North Carolina: $32,021

Per Capita Personal Income

$63,483 Median household income

• a little less than the amount in the Charlotte-Concord-Gastonia, NC-SC Metro Area: $66,399
• about 10 percent higher than the amount in North Carolina: $57,341

Poverty

Job Postings on Indeed

_{Indeed calculates the percentage change in seasonally-adjusted job postings since February 1, 2020, using a 7-day trailing average. February 1, 2020, is the pre-pandemic baseline. Indeed seasonally adjusts each series based on historical patterns in 2017, 2018, and 2019. Each series, including the national trend, occupational sectors, and sub-national geographies, is seasonally adjusted separately. Indeed switched to this new methodology in January 2021 and now reports all historical data using this new methodology. Historical numbers have been revised and may differ significantly from originally reported values. The new methodology applies a detrended seasonal adjustment factor to the percentage change in job postings. For more information, see Frequently Asked Questions regarding Indeed Data.}

Unemployment Rate

Geographical Mobility

Education

Sustainability

Overall, according to Electricity Local, the state of North Carolina ranks 22 for environmental quality and 26 for eco-friendly behavior. Locally, the city of Charlotte is on a mission to become a global leader for economic and sustainable living. The average residential rate in North Carolina is 10.22 cents per kilowatt per hour, and this measures 13.97% less than the national average and 6.32% less than the state of North Carolina.

Transportation to work 

26.2 minutes (11,304,340 ) Mean travel time to work

• a little less than the figure in the Charlotte-Concord-Gastonia, NC-SC Metro Area: 27.7 (33,843,410)
• about the same as the figure in North Carolina: 25.7 (118,198,690)

Rebates, Incentives, and Tools

Continuing the conversation of sustainability, Charlotte has a couple of opportunities for property owners to address a circular economy through waste management practices and landscaping that supports their community goals.

Through the Plastics Lab Program at Innovation Barn, residents can collect and deliver their black and clear takeout containers to be broken down and repurposed, giving the materials a second life. This encourages responsible waste management and supports Charlotte’s vision of building a more circular economy.

Residents can receive 2 free trees through Trees Charlotte, a non-profit focused on growing, diversifying, and stewarding the city’s iconic urban forest. This is an opportunity to support the city’s goal of 50% tree canopy by 2050 which in turn increases green spaces, improves air quality, and supports a more sustainable future for its inhabitants starting at a residential level.

Conclusion

The Charlotte Housing Market is experiencing an overall seller’s market. It is a sweet spot for individuals wanting to cash out on built-up equity by selling at their peak price and potentially reinvesting in a little less warm market. However, for buyers as well, if purchasing a home is ideal for you in the current market, come armed with patience and an open mind, secure a property, and get started building equity.

Explore the data of property sales value, rental rates, and short-term rental revenues on Dynamic.RE.