Steele Creek May 2017 Update

Steele Creek is an area of Southwest Charlotte that has been one of the hottest real estate markets in the area. I have witnessed 15% increases in price in individual neighborhoods in the past year in some cases. Before we get into the current state of the market for that area, let's go into a little more detail of some of the things this area has to offer. for its residents, which helps us to explain the current conditions.

Transportation

Transportation is one of the main benefits of Steele Creek. Steele Creek is located just outside I-485 between I-85 and I-77 on the Southwest side of Charlotte. It is also a short commute from this area to the Charlotte Douglas International Airport, which is a regional hub for American Airlines.

Entertainment

Steele Creek is also in proximity of some of Charlotte's great entertainment choices. Located in Steele Creek on the border of North and South Carolina is Carowinds Theme Park, which includes a water park as well. Just a short trip up I-485 North from this area is the US National Whitewater Center, which includes whitewater rafting, zip lines, climbing walls, bicycle trails, and much more. Another new addition to Steele Creek is Topgolf, which has put a whole new spin on the traditional driving range.

Shopping

It doesn't matter what you are searching for, you can buy it in Steele Creek. The intersection of South Tryon Street (NC-49) and Steele Creek Road (NC-160) has long been a center for commerce. This intersection has three different shopping centers, including groceries, big box stores, clothing, local dining options, and fast food options. All along South Tryon you will find shopping. One of the newer shopping areas in Steele Creek is in the Berewick area. This area is centered around the Charlotte Premium Outlets and has been building more retail, dining, and grocery stores around this hub. There is also a plan for a 1,400 acre mixed use development called the River District slated to begin soon.

Market Conditions - 28273 Zip Code

The real estate market in Steele Creek is one of the hottest in the area. If you are a Buyer looking to move to this area, you can expect a lot of competition in your search. If you are a Seller, it is a great time to list. Sellers are typically seeing short times on the market, less competing listings, and, in many cases, multiple offers (when a home is priced properly).

Some of the tell-tale indicators of a market are statistics such as months of inventory, list price to close price, and days on market. Let's take a look at these for Steele Creek, in particular the 28273 Zip Code.

Months of Inventory

Months of inventory in a market are determined by dividing the number of homes available by the number of homes that close per month on average. A market with six months of inventory is considered stable. Here is what the month of May looked like for Steele Creek:

As you can see, there is very low levels of housing supply under $250k. Even above this price point the inventory is still low, but it is not as dire of a situation for available properties. This low inventory will lead us into the next two metrics.

Days on Market

With such a low inventory, it should not come as a surprise that once houses are listed, they are scooped up right away. Looking at the same price ranges for the 28273 Zip Code, we can see that homes are not lasting once listed.

Not a surprise here that the ranges with the lowest inventory have the shortest time on the market.

Percent of List Price

Now that the days on market and low level of inventory are known, it should not come as a surprise that Sellers are having their demands met for the most part when it comes to their asking price.

Again, not much of a surprise here. Buyers are having to come to the Seller's demands in these cases. And since these are averages, it is not uncommon for a home to be sold above the actual list price.

Having someone to represent you who understands the current market is of utmost importance in these times. There is a lot of competition out there, you don't want to get left behind.

Interest Rates and Affordability

As a Realtor®, we always hear people talk about what "price range" they are looking in. Obviously sellers will care what they will receive for selling dollar-wise, but our buyers should be more concerned with a monthly payment, which is a function of down payment, term (in years), and interest rate. From a buyer's perspective, until they have talked to a lender, the price range is ultimately irrelevant.

During the pre-qualification or pre-approval process with a lender, it is important for a potential buyer to be honest about what they have to put down, their current economic situation, and what they are comfortable with paying on a monthly basis for the next 15 to 30 years. Just because a buyer is pre-approved for $450,000 does not mean that they accompanying mortgage, taxes, and insurance are a figure they are comfortable with committing on a monthly basis.

Mortgage Rates and Fed Interest Rates

While mortgage rates are not directly tied to the federal reserve interest rates, they do tend to move somewhat close to tandem. Interest rates on mortgages are currently still at historically low levels and it is a great time to lock in a mortgage at one of these low rates.

Mortgage Rates and Home Prices

Some speculate that an increase in mortgage rates will decrease home prices since it will decrease the amount of home some buyers can afford. According to CNBC, increase in interest rates may not decrease prices, but increase due to the other economic indicators that are tied to an increased rate, such as widespread perception of the economy.

Mortgage Rates and Affordability

So back to the initial discussion of monthly payment, as a function of down payment, terms, and interest rate. If we look at the typical 30 year mortgage, with 20% down. If we keep the monthly payment the same and adjust the rate from 4% to 5% APR, how much is our purchasing power decreased?

The answer may be surprising, it was to me.

It is actually OVER 11%!!!

This just means today is a great time to buy. Whether you are a first time buyer, moving up, or moving down, doing so now and locking in a great rate is a very smart move. If you have any questions on the buying or selling process, please do not hesitate to reach out to me. I am always here to help.

Home Improvements - Best Bang For Your Buck

When preparing to sell your home, people always wonder what improvements they can make that will get them the most money for their home. Some wonder, is it better to make the changes now or let the buyer come in and make their own design decisions? It is a tough question to answer and can really go either way. Some buyers like to add their own personal touch to their new home, some want to move into a home that is move-in-ready.

If you are considering upgrading your home before moving, one thing to be careful of is over-improving. By upgrading features of your home to a level that is not seen elsewhere in the area, you may put appraisers in a tough spot. While you and the buyer may feel the home is worth that much more due to the upgrades, the appraiser, and ultimately, the bank may not agree.

Let's take a look at the top five improvements that generate the greatest return on investment. These were certainly a surprise to me! 

Attic insulation?!?!? Where is the fun in that? I guess energy efficiency and lower electric bills are something we can all understand would be of value to home buyers. I imagine that even if you weren't selling, as your home is aging new insulation can do wonders for you as well, paying for itself in a relatively short period of time.

Now for the five worst returns:

  

Pretty amazing, the worst returns are in the areas that most people look to improve prior to selling. Three of the five worst returns we see are on "upscale" remodels. It could be that buyers may not have the same upscale tastes as the sellers.

Even with this new knowledge, we know kitchens and baths are what sells. Upgrading these will make your home sell faster, but it is a fine balance between what they will cost and what they will return, in both money in your pocket and time on the market as a seller. If you are considering remodeling to sell, consider contacting a Real Estate Professional to give you an idea of what your home is worth in both cases, then decide whether or not it is worth it!