Increasing demand and a supply crunch led to record rent and home price growth during COVID-19, a new UNC Charlotte study found.
Details: Between September 2020 and this September, median home and rental prices both increased by around 16%, according to the report. The average growth rate from 2010 to 2020 was 6%.
- The median home price was $335,000 in October, according to data from Canopy MLS also released Wednesday.
It’s also made the home buying process more competitive: homes were on the market for a median of just three days, the report found.
Affordability crisis: Affordable homes are becoming particularly hard to find. Only 35% of homes sold for under $300,000 this year. Last year, 49% of homes sold for below that price.
- Your household would need to earn $79,014 to afford the median priced home in Charlotte in 2020, per UNC Charlotte’s report.
- Even to afford a home in the 10th percentile price-wise, a buyer needs to make over $50,000.
- “If we allow this trend to continue, at some point people will think, OK, moving to Charlotte doesn’t make sense because the housing there is really expensive,” Yongqiang Chu, director of the Childress Klein Center for Real Estate at the UNC Charlotte Belk College of Business, said at an event Wednesday.
Above asking: Buyers are also paying more to purchase houses. In June, 60% of homes sold above their listing price. That figure had never been above 30% until 2020, Chu says.
What’s next: Relief is not likely to come in the immediate future. The increases are unlikely to be part of a bubble because they are supported by demand, Chu says.
- For now, the only way to alleviate it is by building more homes.