Charlotte’s real estate market has been like an urbanized version of Field of Dreams, with the city’s growth exemplifying that famous adage: “If you build it, they will come.” True to the saying, the city’s solid trend of building jobs and building homes has caused people from all over the country to move in.
The consistent increase in population and reciprocal development of residential and commercial properties have fueled steady growth in Charlotte’s property values, which, similar to Portland, appreciated last year in spite of a national trend of imploding real estate bubbles.
Charlotte was one of the five most undervalued markets in the United States, according to an article by Forbes published last November; with all the positive growth coming out of Charlotte, it’s not hard to see why.
Affordability, strong economy attract newcomers
For local natives such as Gary Mitchell, a real estate agent for Keller Williams Realty and author of MyCharlotteHomeTeam.com, the influx of newcomers has been a striking phenomenon.
“I was born 50 miles from downtown Charlotte…and [a person would] have a hard time now finding somebody who talks like me,” Mitchell said in his fluent Southern accent.
A steady building boom has followed Charlotte’s population explosion| alt=|A view of the Charlotte skyline|]Charlotte has added approximately 300,000 people—roughly the population of Cincinnati—to its population during the last eight years, and 80,000 came in 2006 alone, Terry McDonald, real estate broker with Wilkinson & Associates and blog author of CharlotteCommunitiesOnline.com, said.
Increased demand for homes has not outstripped the available supply of properties surrounding Charlotte, and thus real estate market growth has been sustainable.
“Our home prices would have shot up if we had a [limited supply of lots], like San Francisco or Manhattan,” McDonald said. “But there’s still a lot of open land all around the perimeter of Charlotte and there’s very active new home construction, and that’s kept our prices pretty reasonable…even though tons of people have come to town.”
Afordability of homes has undoubtedly been one of Charlotte’s major selling points. The median home price in Charlotte was estimated at $172,000 last November, almost 25 percent below the national average of $227,400, according to the NAHB/Wells Fargo Housing Opportunity Index.
“[Anyone] can pretty much buy a house for about a hundred dollars a square foot,” Mitchell said. “A [person could buy] a really nice, new or nearly-new house with a quarter-acre lot, two-car garage and maybe even granite countertops for $250,000.”
Charlotte home prices have been appreciating at a small but steady rate. Charlotte led the nation last November with the highest growth rate of existing single-family home prices at 2.9 percent, according to the S&P Case-Shiller home price index.
The availability of jobs generated by a strong local economy has been another major growth factor in the Charlotte area. Last year, Mecklenburg County created 14,648 new jobs, Tony Crumbley, vice president of research at the Charlotte Chamber of Commerce, said.
That growth rate was roughly consistent with previous years, with 12,087 jobs created in 2006 and 13,418 jobs created in 2005.
As more people flock to Charlotte for jobs, more companies follow. “Companies are following job seekers,” Crumbley said. “They’re going to where they know they can recruit new workers, and the census bureau has ranked Charlotte as having the second highest in-migration of young…educated people [between the ages of 25 and 39].”
Bank of America and Wachovia are both headquartered in Charlotte. Charlotte has become a commercial mecca, comprised of a broad range of businesses.
“Some know that [the banks have made] Charlotte the second largest financial center in the country, but what most people don’t know is [that there are] five other Fortune 500 companies headquartered here, and that makes us the fifth largest city [in terms of] corporate headquarters,” McDonald said.
Charlotte’s strong manufacturing industry and freight line, the largest in the nation, have also fueled the city’s “economic engine,” McDonald said.
In addition to the affordability and increasing activity of the downtown area, Charlotte offers natural appeal, such as lakes and forests, as well as a wide range of attractions, from ski resorts to coastline to major cities, within drivable distances. New York and Miami, for instance, are both 10- to 12-hour drives from Charlotte.
Investment opportunities from the inside out
Charlotte offers opportunities for investments of virtually any amount or type. Investors stand to capitalize on the dramatic growth originating in the core of the city and spreading to surrounding areas, as the massive movement of young people and empty nesters into the downtown area spurs the development of both residential and commercial buildings.
“One of the beauties of Charlotte is we recognize the desires for the new population to be downtown,” Crumbley said. “We had fewer than a thousand people living in downtown Charlotte eight years ago; there are 13,000 [living downtown]today.”
A powerful community