Charlotte Real Estate Market Forecast 2020

Just a couple of months before the start of the new year, you need to decide where to invest in real estate in 2020. To do that, you have to analyze the US housing market for 2020 to identify the top locations for buying a rental property. How about Charlotte, NC? Have you thought about the investment opportunities there? Let’s take a look together at the Charlotte real estate market forecast for 2020.

What’s the Expected Performance of the Charlotte Real Estate Market 2020?

Let’s get to the numbers first. Below are the results of the Charlotte real estate market analysis for 2020, conducted by Mashvisor’s investment property calculator. This is a must-have tool in 2020 which eliminates the need for manual real estate analysis. Our rental property calculator collects nationwide real estate comps as well as traditional and Airbnb rental comps to analyze this big data through its machine-learning algorithms.

Charlotte Housing Market 2020 Forecast

Median Property Price: $384,800
Price per Square Foot: $193
Real Estate Listings: 2,188
Average Days on Market: 77
Price to Rent Ratio: 21
Traditional Rental Listings: 4,642
Traditional Rental Income: $1,520
Traditional Cash on Cash Return: 1.2%
Airbnb Rental Listings: 3,708
Airbnb Rental Income: $2,210
Airbnb Cash on Cash Return: 2.2%
Airbnb Occupancy Rate: 55.0%
Walk Score: 35

What Are the Most Important Charlotte Housing Market Trends for 2020?

1. Affordability

According to real estate experts, the lack of affordability will be one of the main challenges in the US housing market in 2020 for both homebuyers and real estate investors. Having fully recovered from the great recession, home values in many top locations for real estate investing are skyrocketing, including New York, San Diego, San Francisco, Los Angeles, and Boston, to name a few. However, this will not be a problem in Charlotte, NC. The current home value as well as the expected appreciation rate shows that the prices of homes for sale in Charlotte, NC will be affordable, especially for out of state property investors who are used to seeing higher values. While the median property price in the Charlotte housing market exceeds the national level, it is much below what the other best places to invest in 2020 offer.

2. Reasonable Appreciation

Real estate appreciation has accumulated to 76% in Charlotte since 2000, which is significantly below the North Carolina and the national average values. However, it is enough to provide long term return on investment on rental properties. Appreciation is expected to remain good in 2020. Without impacting affordability negatively, it will still encourage real estate investor to go for the buy and hold strategy.

3. Excellent Overall Real Estate Prospects

In the PwC Emerging Trends in Real Estate: Unites States and Canada 2020 report, Charlotte is ranked as #4 for overall real estate prospects. This positions the city right after the Austin real estate market, the Raleigh/Durham real estate market, and the Nashville real estate market among the best places to invest in real estate in 2020. Importantly, this is a major improvement from position #9 in 2019. One of the main reasons for this strongly positive Charlotte forecast is the fact that the city continues diversifying its economy and attracting new technology and manufacturing companies. A sizeable labor market is one of the prerequisites for the good performance of any housing market. Moreover, Charlotte, NC has been focused on improving and building infrastructure, which is another factor for the success of the real estate industry.

4. Major Real Estate Development and Redevelopment Opportunities

The PwC also highlights the strong opportunities for real estate development and redevelopment projects in the Charlotte housing market in 2020. Such projects will serve a dual purpose. First, they will provide jobs in the local labor market, and all the newly employed workers will need places to live. This means increased demand for traditional rental properties. Second, new commercial and residential real estate properties will emerge in the market, raising supply.

5. Strong Homebuilding Prospects

Furthermore, the PwC report ranks the Charlotte real estate market as #2, right after the Raleigh/Durham housing market, in terms of homebuilding prospects. As a result, homebuyers and real estate investors will benefit from an increased supply of Charlotte, NC homes for sale. This will help keep home prices reasonable and might even lead to a slow shift towards a buyer’s market.

6. High Investor Demand

According to PwC data, with a population of 0.8% of all US citizens, the Charlotte, NC real estate market attracted 1.2% of all real estate investments in 2016-2019. This means that the metro area enjoys a higher rate of real estate investments than the rest of the US housing market. This positive trend is expected to continue in 2020 and beyond. Strong real estate investor demand will be the reality of the Charlotte market.

7. A Seller’s Market

Like many other best real estate markets in the US in 2020, Charlotte will be a seller’s market. However, it is not as hot as other locations. Moreover, the relatively low median property prices give a competitive advantage of out of state real estate investors coming from more expensive markets. This means that buying an investment property in Charlotte is absolutely feasible and doable as long as you have the right tools for neighborhood analysis and investment property analysis.

8. Strong Rental Demand

The Charlotte real estate market 2020 will continue enjoying high rental demand for both long term and short term rental properties. Nearly half of the population (47% according to NeighborhooodScout) rents rather than owns a home, which means that there is a large pool of tenants. Moreover, the economic diversification, the infrastructural projects, and the real estate development projects are expected to attract even more in-migration. Potential real estate investors should also consider the fact that Charlotte is already the fastest growing metro area and the fastest growing in terms of millennial population. In addition, the high price to rent ratio of 21 confirms the strong demand for traditional rentals as renting is relatively cheaper than buying a home. This is great news for all those interested in investing in rental properties to rent out on long term basis.

And how about Airbnb Charlotte? Demand in strong there too. The expanding economy and the numerous tourist attractions bring millions of visitors to the city each and every year, driving forward the Airbnb Charlotte, NC industry. This leads to a high Airbnb occupancy rate, which is one of the requirements for good Airbnb rental income and high rate of return in terms of both Airbnb cash on cash return and Airbnb cap rate.

9. Legal Charlotte Airbnb

Since we mentioned Airbnb, it’s important to have a look at the expected trends in the legislation for Charlotte short term rental properties. In recent years many major US cities and tourist destinations have imposed restrictive and even prohibitive Airbnb regulations to control the further spread of the homesharing industry. The concern has been mostly in terms of non-owner occupied rental properties, which have become illegal in many housing markets.

However, Airbnb Charlotte will be fully legal in 2020. There are no restrictions on the types of properties which can be rented out on short term basis (single family homes, duplexes, triplexes, townhouses, condos, apartments, multi family homes, etc.), the types of short term rentals (owner-occupied or non-owner occupied), the number of days per year, etc. This is one of the most important Charlotte real estate market trends in 2020 as it sets the city apart from many other best locations for real estate investing.

10. Landlord Friendly Legislation

While Airbnb Charlotte promises to be a profitable real estate investment strategy in 2020, not all investors like the idea of owning a short term rental and becoming an Airbnb host. Some prefer long term rentals instead. Those would be happy to hear that North Carolina is a landlord friendly state in general. While the landlord-tenant laws make sure to cover the rights of both groups, they tend to favor landlords and investors.

11. Good Return on Investment

All the Charlotte real estate market forecast markers point to high profitability potential for Charlotte investment properties in 2020. The numbers provided by Mashvisor’s rental property calculator might seem somewhat discouraging for new investors who know that a good cash on cash return is usually above 8%. However, they should keep in mind that these are just the city-level averages. Meanwhile, the best neighborhoods in Charlotte, NC for buying rental properties offer a much high rate of return. With Mashvisor’s Property Finder, it is easy to locate double-digit cash on cash return investment properties for sale in Charlotte.

12. Optimal Rental Strategy: Airbnb Charlotte

Mashvisor’s Charlotte real estate market analysis shows that both rental strategies can yield a high return in 2020. However, Charlotte vacation rentals definitely bring a better rate of return. Considering the investor-friendly Airbnb legislative and regulatory environment, Airbnb emerges as the optimal rental strategy in Charlotte in 2020.

What’s Driving the Charlotte Real Estate Market Forecast for 2020?

There are many positive factors which contribute to the expected good performance of the Charlotte housing market in the coming year. The most important ones include:

Population

Demographics is a key factor in any real estate market. As mentioned above, Charlotte is not only the fastest growing metro area but also the fastest growing millennial population. In addition, it is the second largest metro area in the Southeast after Jacksonville, FL and the third fastest growing major city in all of the US housing market. With more than 872,000 residents, Charlotte is already the 16^th largest city in the US. Moreover, nearly half of the population rents, according to data from NeighborhoodScout. This means that demand for traditional Charlotte rental properties will be high.

Economy

Charlotte has turned into one of the financial centers in the US economy having the second largest banking assets after New York. It is home to Bank of America, one of the major banking institutions in the US. The metro area also hosts 7 Fortune 500 companies. Other important economic sectors include motorsports, health care, education, research, and energy. This diverse economy is a positive indicator for real estate investors. Even if one industry takes a plunge, workers will be able to relocate to another relatively easily and quickly.

Tourism

The strategic position of Charlotte, NC as well as the amiable climate and the growing economy attract a high number of visitors each and every year. This is one of the most important drivers of the Airbnb Charlotte, NC industry as it translates into a high Airbnb occupancy rate.

Conducive Regulatory Environment

Generally speaking, Charlotte has a very real estate investor-friendly legal and regulatory environment. It is located in a landlord-friendly state where the rights of rental property investors are well protected. Moreover, Airbnb is fully legal.

What Are the Best Neighborhoods in Charlotte, NC for Real Estate Investing?

Now that you know the details of the positive Charlotte real estate market forecast for 2020, you might have started thinking about buying an investment property there. But where do you start? By identifying the right neighborhoods for each rental strategy.

We’ve done the neighborhood analysis job for you with the help of Mashvisor’s rental property calculator. Below you can see the most profitable locations for both long term and short term Charlotte rental properties.

Top Charlotte Neighborhoods for Traditional Rentals

#1 Idlewild

Traditional Cash on Cash Return: 2.6%
Median Property Price: $203,900
Traditional Rental Income: $1,180
Price per Square Foot: $143
Walk Score: 21

#2 Oaklawn

Traditional Cash on Cash Return: 2.5%
Median Property Price: $183,300
Traditional Rental Income: $1,080
Price per Square Foot: $161
Walk Score: 15

#3 Hwy 51 – Park Road

Traditional Cash on Cash Return: 2.4%
Median Property Price: $225,500
Traditional Rental Income: $1,370
Price per Square Foot: $143
Walk Score: 17

#4 Genesis Park

Traditional Cash on Cash Return: 2.4%
Median Property Price: $190,600
Traditional Rental Income: $1,200
Price per Square Foot: $168
Walk Score: 46

#5 University City South

Traditional Cash on Cash Return: 2.3%
Median Property Price: $163,600
Traditional Rental Income: $1,400
Price per Square Foot: $145
Walk Score: 32

Top Charlotte Neighborhoods for Airbnb Rentals

#1 Westerley Hills

Airbnb Cash on Cash Return: 9.1%
Median Property Price: $131,800
Airbnb Rental Income: $2,440
Airbnb Occupancy Rate: 53.0%
Price per Square Foot: $122
Walk Score: 18