The Truth About Charlotte’s Home Market Lies Between the Lines
By Brian Pace, President - Homebuilders Association of Charlotte
By Brian Pace, President - Homebuilders Association of Charlotte
Pace Development
Over the past 20 years, Pace Development has produced some of the area's fastest-growing neighborhoods -- Hunter Oaks, Brandon Oaks, Lawson and Skybrook. Since 1998, Pace has served in a number of leadership positions with the HBA of Charlotte, including board member, Treasurer, and Vice President. In 2001, Pace was named one of the Charlotte Business Journal's "40 under 40." He was the HBA's Distinguished Builder of the Year in 2002.
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Story Highlights
• Roughly 65,000 residents a year stream into Charlotte
• Arguments for a quick recovery in Charlotte are sound
• We remain relatively strong for a variety of reasons
We’re bombarded on a daily basis with headlines, statistics, and expert analysis of the national housing slowdown. But we all know that real estate is local, so what’s happening in Charlotte?• Roughly 65,000 residents a year stream into Charlotte
• Arguments for a quick recovery in Charlotte are sound
• We remain relatively strong for a variety of reasons
During the recent housing boom, Charlotte enjoyed strong, steady home price appreciation while other areas experienced dramatic rises in home prices. The areas that saw housing prices surge are now driving the housing slowdown, while markets like Charlotte experience much less pain. Price appreciation has moderated and home sales are down in Charlotte compared to 2006, the region’s top year ever, but they haven’t fallen far. Current levels mirror those in 2004, one of the top three years on record for the area. Permits for new home starts recently dropped considerably in Charlotte, leading to job losses and other cutback for local builders.
We are disappointed when builders shut down operations and jobs are lost. On the flip side, the adjustments Charlotte builders have made are natural and can be good from a market perspective. By pulling fewer new start permits, builders prudently help balance the market’s supply and demand equation. Also helping local supply and demand is the tremendous flow of newcomers our region enjoys. Roughly 65,000 residents a year stream into Charlotte, boosting home absorption rates which already rank among the best in the country.
Predicting the bottom
When will Charlotte start to bounce back? That’s very hard to say as predicting the bottom of financial or real estate markets is terribly difficult. However, if the market in Charlotte begins to rebound this summer or fall as some experts believe, the next five months will be one of the best times to buy in recent memory. Once the market starts to recover, prices and interest rates will begin creeping back up as we swing from a buyer’s market to a more neutral stance.
For homebuyers, the current market in Charlotte offers some excellent opportunities. Today’s mortgage rates remain low and many Charlotte home builders are offering great incentives to boost sales. There really are some great home buying opportunities in the current marketplace.
Arguments for a quick recovery in Charlotte are sound. We remain relatively strong for a variety of reasons, including strong job gains, household growth and steady, sustainable home price appreciation. We also enjoy a small number of foreclosures compared to the rest of the country and our investor sales remain relatively low. These dynamics will help Charlotte emerge from the downturn sooner than the rest of the country.
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