A bleak picture was painted of the Charlotte region’s housing market in terms of affordability in a new report released Thursday at a UNC Charlotte-sponsored housing summit. Low-priced homes are hard to find as Charlotte's ever-increasing population continues to outstrip the area’s housing stock. With fewer homes available, more people are renting at higher rates.
The report is part of a five-year project the university’s real estate center is undertaking to track the ups and downs of the housing markets in Mecklenburg and its seven adjacent counties.
In presenting the report’s findings to a packed audience of policy and business leaders, Richard Buttimer, the center’s director says home prices in the region are rising higher than inflation. He says that’s because more people are moving and living here than the number of homes available or being built. The report finds that between 2007 and 2017, the region’s population grew by 22 percent but the housing supply by only 14 percent.
‘Charlotte has slightly over an 8 percent vacancy rate,” Buttimer said. “The only cities with lower rates are Denver, Portland and Nashville, which are essentially the same as us. We have a lower vacancy rate than Atlanta, Indianapolis, Memphis and others.
Buttimer says another major factor behind that trend is the cost of land in the area.
“Land prices are rising. That’s really the core. If land prices are rising it’s really hard to keep anything else from rising,” Buttimer said.
In 2012, land in Mecklenburg cost an average of $156,000 an acre the report finds. That increased to just under $200,000 an acre by 2017. Buttimer says those with higher incomes are at times buying cheaper homes than what they can afford because that’s all that’s available. Low and middle income residents do not have that same option. According to the report, there are 80,000 households in the region with people making less than $15,000 a year who must rely on housing subsidies to afford a home. Middle income families are also being priced out, with the report showing only 15 percent of homes in the region at the $150,000 range—down 35 percent from five years ago.
“Charlotte, we’re in the moderately unaffordable range and it’s getting worse. But basically what’s happening in Charlotte is our housing prices have risen faster than our incomes. Our incomes haven’t gone up since 2013,” Buttimer said.
Which is a key point for City Councilman Braxton Winston.
“The issue of affordable housing starts with wages and we have to find more ways to put more money in people’s pockets,” Winston said. “Prices are going up greater than wages and this is the challenge.”
Winston says a lot of the information in the report is known to policymakers. But he says it gives them more solid data to work with as they try to come up with ways to solve Charlotte’s affordable housing problem, which is about 24,000 units short of what is needed.