Residential bidding wars may be over in Charlotte, but concerns about affordability aren’t
Charlotte's real estate market may be cooling off, with less pressure on homebuyers to bid tens of thousands of dollars over the asking price. Compared to cities like Denver and New York, real estate experts say home prices in the Queen City are relatively low.
But experts also caution that the market is unpredictable and advocates of affordable housing say big questions about accessibility remain.
Morgan Wise, a senior loan officer at Bridgewater Capital, said that recent bidding wars have scared many buyers in the Charlotte area, where it wasn’t uncommon for sellers to receive dozens of offers and to go on to sell for more than $50,000 over asking prices.
It was enough to prompt real estate agent Maceon McCracken to share a video on TikTok in May discussing her experience with a client.
McCracken shared that her client offered $85,000 over the list price and $25,000 in nonrefundable due diligence on a 1930s Plaza Midwood home, even though the home had outdated wiring and a slight basement leak. McCracken, who is with Allen Tate Realtors, discovered that her client’s offer was not even close to the winning bid.
The video went viral.
McCracken said that the market now seems to be finally “normalizing.” She recently helped that same client sign a contract to purchase a home for $40,000 below the list price, a significant shift from just a few weeks ago.
‘Increasingly precarious and unattainable’
“Normal” doesn’t necessarily mean affordable, advocates caution.
Charlotte’s desirability has driven an increase in prices and demand, bringing more people to the area. But affordable housing advocates say that it has also begun pushing out people who were in the state’s largest city before the “boom.”
“Housing [in Charlotte] is not only increasingly unaffordable but also increasingly precarious and unattainable for people,” said Ismaail Qaiyim, principal attorney for Queen City Community Law Firm. Qaiyim also works with Housing Justice Coalition CLT, which advocates for education and awareness about housing issues.
He said that as housing prices and property taxes go up, many people, who are not in the city’s top income brackets, will struggle to retain their homes or access ownership.
Charlotte has had its fair share of controversy surrounding affordable housing and increasing development. The most recent City Council election showed an emphasis on housing in local government – 32.7% of the $185,000 raised by the top candidates came directly from the real estate industry, according to Axios Charlotte.
Qaiyim said he believes the influence of developers is changing.
“And that’s only really begun to change recently because of grassroots organizing and how dire things have become,” he said.
“(Charlotte is) growing for whom? There’s this idea that economic growth is good, but people don’t define what economic growth is,” he added. “Does that mean that the quality of life increases for the majority of people in the city … or people who stand to be displaced because they’re on fixed incomes and can no longer afford their property taxes?”
Qaiyim’s concerns are echoed by many, including McCracken. She reflected on the fine line between wanting to see your city thrive while also including all the people who make that city special.
“As a resident, you’re torn because you want Charlotte to stay the best-kept secret, but being in the business, I know that people and businesses moving here will help our economy and our city grow,” she said. “The flip side of that coin, the dark side, is that the property values are going to go up.”
Charlotte and national trends
Real estate agent and broker Heather Hopkinson said that Charlotte’s housing market is catching up with national trends. She said that larger markets like New York’s started slowing first, and now Charlotte’s is following suit.
Hopkinson also said she’s seeing a repeat of what happened after the 2008 market crash, a time when she saw low appraisals and quickly fluctuating home prices.
She said that with such a fast-moving market, pricing information about comparable homes is inaccurate after 30 days when prices change, leading to appraisals that may no longer match. It’s critical for real estate agents to explain these market issues to buyers, Hopkinson said, so that buyers understand how appraisals and price changes can impact their ability to purchase a home.
Qaiyim said that the market has not yet stabilized for his group of friends, who have told him of the trouble they have buying homes with high prices in a competitive market.
“Everything in Charlotte is overvalued because it is highly profitable,” he said.
“The practical change we’d like to see,” he said, “would be to see the county and the city become more active and use their regulatory powers to protect Charlotteans, limit the power of corporations and reinvest money back in communities.”
McCracken acknowledged how unpredictable this market could feel to homeowners and buyers, with prices and rates fluctuating constantly. Nationally, mortgage agency Fannie Mae recently projected that total home sales will decline 17% from 2021.
“Things are certainly changing,” McCracken said, “But I don’t think it’s headed anywhere towards a crash. Nothing is going to change about the desirability of the Charlotte area.”
Caroline Willingham of Durham is a student in the James L. Knight School of Communication at Queens University of Charlotte, which provides the news service in support of local community news. This story was produced in collaboration with Carolina Public Press.