Charlotte's Slow Steady Growth Pays Dividends
By Chuck Graham, Charlotte Real Estate Expert
By Chuck Graham, Charlotte Real Estate Expert
Chuck is a veteran of the Charlotte real estate market and principal of Newton Graham Consultants, where he directs all feasibility and marketing assignments as well as general management consulting in the areas of strategic development, organizational structuring, control systems and financial management. He holds a bachelor's in architecture, magna cum laude, from The University of Notre Dame and a master's in business administration from Harvard University.
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Story Highlights
• Charlotte's market is much healthier than most
• The inventory of new homes in Charlotte is at 7 months U.S. compared to the national average of 12 months
As good as the last five years seemed for housing in Charlotte, we did not enjoy the phenomenal boom market that the country’s other hot spots did. This may seem surprising and at first glance, a bit negative. It is not. The fact that Charlotte avoided skyrocketing appreciating rates is one of the major factors currently helping the market retain its relative stability and affordability. • Charlotte's market is much healthier than most
• The inventory of new homes in Charlotte is at 7 months U.S. compared to the national average of 12 months
Charlotte experienced steady appreciation from 2003 to 2008
While we may have been jealous of the 20 to 30 percent gains in California, Nevada, Arizona, and Florida, we escaped the bubble, which ultimately burst. Charlotte maintained an appreciation rate of approximately six percent and remained far more affordable than these boom markets. The area also posted attractive household and employment growth, further boosting its resistance to market fluctuations.
Other factors supporting Charlotte’s relative strength include fewer investor sales and subprime loans compared to other parts of the country. In 2006, investors accounted for 14 percent of sales in Charlotte, versus the national average of 22 percent. Sub-prime loans were 13 percent of the transaction base here, nine percent lower than the nation. Additionally, inventory levels in Charlotte for new homes average about seven months of supply versus the national average in major markets of 12 months.
Despite all of the strong dynamics, Charlotte is feeling some pain from the national housing situation.
Changing lending standards and difficulties in re-sale markets in other parts of the country have impacted Charlotte as evidenced by slower sales in the fourth quarter 2007. Builders have cut back dramatically on starts in response to market conditions, reductions in construction loan funding, and less funding by national builders.
Charlotte may be much more of a buyer’s market than it has been, but it is much healthier than most and should not be compared to the boom/bust markets we read so much about.
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