While it would be an exaggeration to say Charlotte is avoiding all the troubles currently plaguing the national economy, the region is clearly holding up better than most other areas. Home construction and housing prices did not experience anywhere near the boom seen in many other markets and homes remain priced roughly in line with income levels. The abundance of moderately priced homes has helped attract scores of new residents and businesses, many of whom are fleeing higher costs areas in the Northeast, Florida and California.

Population growth has surged over the past two to three years. The six-county metropolitan area (MSA) added a record 66,724 net new residents in 2007, up from 62,652 the prior year. The thirteen-county combined metropolitan area (CMSA) numbers, which include booming areas just outside the MSA such as Mooresville, Denver, and Lancaster County, South Carolina; look even more impressive, with population gains totaling 78,640 new residents in 2007, sending the CMSA population to 2,277,074 residents.

Newcomers have not had too much trouble finding jobs. Nonfarm employment increased 3.9 percent in 2007, which translates into 32,400 net new jobs. The unemployment rate averaged just 4.7 percent last year, which is quite remarkable considering how rapidly the labor force has increased. Overall job growth was even stronger if you look at the CMSA. On this basis, nonfarm payrolls increased 3.8 percent in 2007, producing a net gain of 34,900 new jobs.

Charlotte has received tremendous attention recently from being the lone city in the S&P/Case Shiller Home Price Index to show a year-to-year gain in home prices. While this was certainly true for the March data, Charlotte has actually seen a decline in home values. Prices have fallen 3.8 percent since peaking in August. That is still a better performance than any of the other 19 markets covered by the survey. The fact is Charlotte will probably join the other 19 markets when the April data are reported.

The moderation in home sales along with tightening credit conditions has triggered a pullback in residential construction. Permits for new single-family homes have fallen 38.8 percent over the past year and are down a cumulative 42.8 percent since peaking in July 2006. Builder inventories of unsold homes are fairly lean, however, and construction will likely turn up once sales improve later this year.

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