I got some intel on Charlotte’s residential market, and I am surprised at how we are ranked compared to our peers.
Charlotte’s long been buzzed about as having one of the hottest residential markets. Yet, data from John Burns Real Estate Consulting (www.realestateconsulting.com) ranks Charlotte tied for 7th.
No one likes being ranked 7th. Or 4th, as I recently found out during my Dancing with the Stars competition, but I digress. When it comes to the US residential markets, the hottest are Seattle, Southern California, Salt Lake City, Dallas, and Nashville – not QC, nor anywhere else in North Carolina or South Carolina.
Here are 7 insights into the Charlotte residential market that I found interesting:
- The hot selling point is at the entry level. My theory on this is that buyers are looking for the one amenity apartment dwellers want but can’t find in SouthEnd – peace and quiet.
- Conversely, the over $500,000 homes aren’t selling well. While the hallmark of the Charlotte market was once the new $1M+ mini-estate in Weddington, preferences have evolved so that homes need to be in-fill, located in the ideal school district and loaded with features to get buyers off the dime.
- The 55-and-over active adult community buyer has slowed (this shouldn’t surprise you – old people slow a bit).
- Charlotte and Nashville get compared to one another a lot. Nashville single-family builders must feel like Charlotte apartment developers – sensing the party must have to end soon and uneasy about exactly when the dancing is going to stop. John Burns reports that Nashville is a “very hot market” – everything is expensive (materials, labor, land) and public infrastructure is nearing capacity.
- Research shows that Charlotte was among the most difficult markets in the U.S. to find a home in the “low-price” tier. Only San Francisco, Raleigh, Seattle, Nashville, Tampa and Orlando were tougher places to find homes at the lowest level of pricing. Expect to continue to hear a lot about this for the next 36 months from city leaders.
- Eighteen months ago, John Burns reported that Charlotte’s housing market was one of the lowest risk markets for builders. However, 12 months later (end of 2017) we had moved towards the national average, but were still considered “low risk”. The result is a lot of new builders entering into the market and continued builder swagger.
- “Payment to Income” is a fascinating correlation demonstrated in the John Burns Consulting research. If people in San Francisco spend the most of their monthly paycheck on housing in the US, and people in Indianapolis spend the least, Charlotte is somewhere in the middle (very similar to Atlanta).
A note about apartments that may bode well for the single-family market.
I’m hearing an increasing amount of grumbling from Millennials about urban apartment living. A common complaint is they are getting fatigued with living with other people’s dogs. I’ve heard so many young people remark that they are simply tired of walking into their apartment lobby and being surrounded by 20 dogs belonging to others.
Plus the noise. One can’t control most of the noise found in apartment living.
I was in a spin class the other day and the instructor asked why people had to come class. One clearly exasperated young woman said she was there because of the buzzing in her apartment that had been nonstop for two days – there was nothing she could do to stop it, and she was looking for a break at Flywheel. Go figure.