Experts say mortgage rates, which hover above 6%, will shape our 2023 real estate market.
Flashback: In 2021, we were all watching inventory, which failed to meet insatiable demand fueled by record-low mortgage rates. In 2022, the balance started to shift — more homes hit the market and outrageous bidding wars mostly ceased — as mortgage rates skyrocketed.
Here’s what local realtors think the Charlotte real estate market will look like in 2023.
1. Prices will return to “normal.”
Charity Washington with Savvy + Co. predicts home prices will drop 5-10% in 2023. Because home values spiked so much in 2022, this slight decrease will bring Charlotte home prices back down to normal.
Given the area’s relatively high demand, Lisa Warren of Cottingham Chalk foresees an active market “but with a slower rate of price appreciation.” She says the 2023 market could bring relief for buyers who’ve been challenged by the market in recent years.
2. But mortgage rates will make buying hard for many.
“The market right now generally moves with interest rates,” Jeff Clay, owner of JClay Realty, says. And unless those rates come down drastically, “we are likely in for a market with low overall activity, low supply and demand that will probably stay a bit muted,” Clay says.
Home prices, despite leveling off in recent months, are much higher than pre-pandemic days. “That coupled with rates in the 6% range has made affordability tough for a lot of buyers. This will likely keep demand in check for a while,” Clay says.
3. Current owners won’t sell unless they have to.
“Most of them are locked in to low rates and paid much less for their homes than the current market value,” Clay explains. A comparable home would likely cost them much more per month, which means they won’t move unless they need to.
4. Still, Charlotte will shine compared to other metros.
“In general, the Carolinas and specifically Charlotte, remain a hot bed for inbound buyers from markets that still make our prices and cost of living desirable by comparison,” Josh Tucker of Corcoran HM Properties says.
So while the market may shift slightly, Charlotte likely won’t experience drastic price drops or major changes because our job market, weather, desirable geographic location, access to major highways and an international airport continue to attract people to Charlotte.
5. Charlotte’s market will stay strong.
Brandon Lawn, founder of Brandon Lawn Real Estate, predicts inventory will remain relatively low. But as houses sit longer (like they are currently), buyers will have more time to consider their options. Plus, many of his buyers are coming with “considerable cash.”
“If you combine buying power with less competition, 2023 could be a great time for buyers and sellers,” he says.
Similarly, Vicky Mitchener, founder of Dickens Mitchener, predicts the market will still favor sellers, but they’ll have to work for it.
“The appropriately priced homes that are in good condition and an appealing location will continue to drive offers,” she says. But today’s buyers, she adds, are a lot more cautious than those in recent years.