New Study: Charlotte Is the 10th Most Overvalued Housing Market
CHARLOTTE, NC – The Charlotte housing market is one of the most overvalued markets in the country, according to a new study.
The researchers from Florida Atlantic and Florida International Universities looked at prices versus long term trends and found Charlotte to be in the top 10 for overvalue.
“Many buyers are looking to gain a competitive advantage by offering on homes while they’re still in that coming soon status,” explained Nelvia Bullock, a realtor with Compass.
She says people are going to great lengths to buy homes.
“They’re buying as is. They’re waving inspections. They’re offering appraisal gap addendums,” said Bullock.
“It’s just a wild time right now,” explained Tom Kirby, a Charlotte area appraiser.
Kirby says some people are waiving the appraisals all together, or they’re accepting the difference just to get in the home.
“Appraisers have to do their job the right way and it just doesn’t always work out to the sales price,” said Kirby.
The skyrocketing prices have led to Charlotte area home values being overvalued by more than 50%.
“What we find right now is that all markets, that we find, are overpriced relative to trend. And those at the top of the list are overpriced by a very significant margin,” said Eli Beracha.
Beracha is the Director and Professor of Real Estate at Florida International University. According to research he helped compile, Charlotte is 10th most overvalued city in America.
Meaning relative to trend, a $300,000 home is going for roughly $450,000.
“A combination of low supply and at the same time high demand of people who simply want to move to the area is brewing this overpricing that we see,” said Beracha.
Homebuyers can’t do much about the current market conditions, but mortgage rates are expected to rise in the coming months, which could lead to a plateau in home prices.
“In the medium term, it has to soften housing prices a bit. So that doesn’t mean that you’re going to see a correction like in 2007 and all the way through the great recession. I don’t anticipate that,” said Beracha.
Bullock is advising clients to have loans ready and be willing to move quickly with an offer.
“If someone really needs to move, we’re putting together an action plan to make sure they get the home they desire,” said Bullock.