The thought of a housing market correction will most likely have many future homebuyers jumping for joy. Although this is great news, there’s no reason to think that any coming correction will be anywhere near as extreme as it was in 2008. In fact, most home prices here in the Charlotte area will continue to rise for at least another year. In the short-term, that may sound like more good news for local homeowners, but the reality is likely to be more complex.
As it turns out, historical data indicates that housing markets with the highest home price to median income ratio tend to suffer the most in a downturn, and that’s not a good sign for us here in Charlotte.
If the present conditions here in Charlotte are any indication, any homeseller looking to cash out and sell off their property should get the ball rolling as soon as they are able. Those that don’t may well become trapped in the spiral of falling prices that will accompany the coming correction. That’s fine if you’re willing to wait for prices to recover, but there’s no telling how long that will take. There’s also no way to forecast how steep the decline will be once it begins. If you use the Australian market as a barometer, it could be reasonable to expect at least a 12% to 18% decline in home prices before the market begins to stabilize, spread over at least two or three years.
The bottom line for Charlotte homeowners is: the years of price inflation are almost over – and if you’re planning to sell, you’re running out of time unless you’re willing to take a significant loss.
For more information on buying or selling a home in the Charlotte NC area, call 704-965-3319 or email us at trena@trenamiller.com.