Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into the Charlotte real estate spreadsheet template.
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Expecting a decrease in Charlotte's prices in 2025? Think again.
Even with changing dynamics, Charlotte's market is strong, with high demand and low supply pushing prices up.
Let's explore why this city's prices are set to rise in 2025.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
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1) Charlotte boasts an excellent "Livability" score of 80
Signal strength: strong
The livability score of 80 in Charlotte is considered excellent because it reflects a high quality of life, which is a key factor attracting new residents and investors.
One reason for this high score is Charlotte's vibrant cultural scene, including numerous museums, theaters, and music venues that offer diverse entertainment options. Additionally, the city boasts strong educational institutions, such as the University of North Carolina at Charlotte, which contribute to a well-educated workforce and attract families seeking quality education for their children.
Moreover, Charlotte's robust job market, particularly in the banking and finance sectors, provides ample employment opportunities, making it an attractive destination for professionals. These factors combined suggest that the demand for housing will likely increase, driving up prices in 2025.
However, if the livability score were to drop below 70, indicating a decline in these key areas, it could signal a potential decrease in housing demand and prices.
Source: AreaVibes
2) In Charlotte, there are only about 0.43 homes per person, which is quite limited
Signal strength: strong
The fact that there is around 0.43 home per inhabitant in Charlotte indicates a relatively low housing availability. This low ratio suggests that housing demand is outpacing supply, which often leads to increased competition among buyers. As a result, this competition can drive up housing prices over time, making it a potential opportunity for real estate investors.
Charlotte is known for its rapid population growth, fueled by its thriving job market and appealing lifestyle. This growth means more people are moving to the area, further increasing the demand for housing. With limited housing availability, this demand can lead to higher property values as more people compete for fewer homes.
Investors should consider that Charlotte's unique local factors, such as its economic opportunities, contribute to this trend. However, if the ratio of homes per inhabitant were to increase significantly, say to 0.6 home per inhabitant, it might indicate a shift towards a more balanced market.
Source: USCensus
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3) Home values in Charlotte have risen by 3.0% since last year, and this trend may persist
Signal strength: strong
The fact that home values in Charlotte have already changed by 3.0% since last year is a strong indicator that the housing market is on an upward trend. This change suggests that demand is increasing, which often leads to higher prices.
Currently, the median home price in Charlotte is around $393,552, and this figure is crucial for potential investors to consider. Additionally, the median sales price per square foot is around $242, which provides insight into the cost efficiency of properties in the area.
These statistics indicate that Charlotte's real estate market is experiencing growth, making it an attractive option for investment. If this trend continues, housing prices are likely to rise in 2025, offering potential returns for investors.
However, if the home value change were to drop below 1%, it might suggest a stagnation or decline, challenging the assumption of rising prices.
Source: Redfin
4) Three major websites predict that home prices in Charlotte will rise in 2025
Signal strength: strong
There are three major websites forecasting a positive growth for home prices in Charlotte in 2025, which is a promising signal for potential investors.
Among these forecasts, Realtor is the most optimistic with an expected increase of 8.40% in home prices, followed by Redfin's forecast of 4%, and finally, Zillow predicts a 2.60% rise. The significant gap between these predictions suggests varying levels of confidence in the market's growth potential.
While these forecasts are encouraging, it's important to approach them with caution as they are based on projections and assumptions. We will also rely on strong, reliable, and actual data to make a well-informed professional judgment.
If these forecasts were to predict a negative growth or a decline in home prices, it would signal a potential downturn in the market.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
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5) Charlotte's is just 7.5%, showing it's a bustling and competitive market
Signal strength: moderate
The vacancy rate in Charlotte is currently at 7.5%, which is considered very low. This low vacancy rate indicates that the housing market is highly occupied and competitive, suggesting that demand for housing is strong.
When demand is high and supply is limited, it often leads to increased housing prices as more people compete for fewer available homes. In such a market, properties that are easily rented are typically well-maintained and located in desirable areas.
Specifically, modern apartments in Uptown Charlotte are in high demand due to their proximity to amenities and employment opportunities. Investors might find these properties appealing as they tend to attract young professionals seeking convenience and a vibrant lifestyle.
If the vacancy rate were to rise significantly, say to above 10%, it could indicate a shift towards a less competitive market, potentially stabilizing or even decreasing housing prices.
Sources: NeighborhoodScout, DataUSA, USCensus
6) In Charlotte, about 31% of homes sell for more than their listing price
Signal strength: moderate
In Charlotte, a significant indicator of rising housing prices is that around 31% of sales close at a price higher than the listing price. This suggests that buyers are willing to pay more than the asking price, indicating strong demand and competition for homes.
When demand exceeds supply, it often leads to increased prices as buyers compete for limited properties. This trend is a clear signal that the market is heating up and prices are likely to continue rising.
For potential investors, this means that investing in Charlotte's real estate market could yield profitable returns as property values appreciate. However, it's important to note that if the percentage of sales closing above the listing price drops significantly, it might indicate a cooling market.
Source: Zillow
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7) In the past decade, Charlotte's home prices have consistently risen by an average of 10.3% each year
Signal strength: moderate
The fact that home prices in Charlotte have appreciated at an average rate of 10.3% over the last decade is a compelling signal for potential investors. This consistent growth suggests a strong history of demand and price increases, which can create a favorable environment for future appreciation.
While it's important to remember that past performance doesn't guarantee future results, historical trends can provide valuable insights. A decade of steady growth often indicates underlying economic and demographic factors that support rising home values.
Investors should consider that such a positive trend reflects a robust market, potentially making it a wise choice for investment. However, if the appreciation rate were to drop significantly, say below 3% over a similar period, it might suggest a cooling market.
Source: NeighborhoodScout
8) Charlotte boasts a strong employment rate of 69.7%
Signal strength: minimal
The employment rate in Charlotte is at 69.7%, which is considered high compared to many other regions in the United States.
This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing. When people are employed, they are more likely to invest in buying homes, thus driving up housing prices.
Charlotte's major employment sectors include finance, healthcare, and technology, which are known for offering well-paying jobs. Companies like Bank of America and Wells Fargo employ a significant number of people in the area, contributing to the city's economic stability.
If the employment rate were to drop below 60%, it might indicate a weakening economy, potentially leading to a decrease in housing demand.
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So, are prices going to climb in Charlotte in 2025? Yes, they are!
Charlotte's real estate market is poised for growth in 2025, driven by several compelling factors.
First, the city boasts an excellent livability score of 80, attracting new residents and investors due to its vibrant cultural scene, strong educational institutions, and robust job market. This high quality of life is a magnet for professionals and families, increasing housing demand. Additionally, the low housing availability of 0.43 homes per person indicates that demand is outpacing supply, leading to increased competition and higher prices.
Moreover, home values have already risen by 3.0% since last year, with forecasts from major websites predicting further growth in 2025. The vacancy rate of 7.5% and the fact that 31% of homes sell for more than their listing price underscore the market's competitiveness. With a decade-long trend of 10.3% annual price appreciation and a strong employment rate of 69.7%, Charlotte's real estate market is set to continue its upward trajectory, making it an attractive investment opportunity.