Banks Help Charlotte, North Carolina, Buck Housing Downturn
By David Mildenberg
Sept. 19 (Bloomberg) -- New York financial consultant Archie Luna will escape a 90-minute commute when he moves next month to Charlotte, North Carolina, where he's buying a $350,000 house that triples his space.
``My work-life ratio has really been pretty sad,'' said Luna, who takes a train daily from Long Island to Manhattan. ``We can get a house we really want in Charlotte, and I think if we make the right decision, we'll be sitting on a lot more equity in 10 years.''
Newcomers to Charlotte are finding an oasis in the biggest U.S. housing slump in 16 years. Homes are still affordable because Charlotte wasn't a target of the speculative second-home buying common in Florida and California.
Price gains started accelerating two years ago, driven by the expansion of Bank of America Corp. and Wachovia Corp., the second- and fourth-largest banking companies in the U.S. Both are based in Charlotte and together employ 35,000 people in the city of 664,000.
The average closing price for a single-family home in Mecklenburg County, which includes Charlotte, was $256,937 in the first half. Prices look like bargains to many people moving from New York, Philadelphia or Boston.
``Most of them think they have died and gone to heaven,'' said Dorothy Munson, president of the Charlotte Regional Realtor Association.
Home prices in Charlotte rose 6.78 percent in June from a year earlier, trailing only Seattle, according to the S&P/Case- Shiller index. Nationally, prices fell 3.49 percent.
Luna, 40, who specializes in Sarbanes-Oxley Act compliance software, his wife and 2-year-old son are moving into a suburban home with four bedrooms and 3 1/2 bathrooms. Its finished basement is 40 percent larger than his entire Long Island house.
Magnet for Jobs
Finance-related employment in the Charlotte area increased 69 percent in the past decade, as the banks helped attract thousands of lawyers, accountants, consultants and other vendors. Both Bank of America and Wachovia are building downtown office towers more than 30 stories high to provide space for their work forces to grow.
The banks ``are a magnet,'' said Robert Eisenbeis, former head of research at the Federal Reserve Bank of Atlanta, who previously was a professor at the University of North Carolina. ``Charlotte has become a financial center. Charlotte is an example of a community focused on services with a well-defined focus.''
The rising prices are grabbing the attention of big real- estate developers. Atlanta's Portman Holdings LLC, which put together multiblock developments in Atlanta, Shanghai and San Francisco, this month began selling 99 condominium units starting at $1.5 million as part of a 40-story downtown tower.
Trump's Interest
Developer Donald Trump is considering building condos on Tryon Street, the main downtown thoroughfare, and may close on property by year-end, said Ashley Campbell, co-founder of Infinity Partners, which is working with Trump. Trump declined to comment.
Most Charlotte residents prefer the suburbs. Popular neighborhoods such as Myers Park, Eastover and Dilworth are only 10 minutes from the city center.
``I would call Charlotte the new Atlanta,'' said James Rogers, chief executive officer of Duke Energy Corp., the sixth- largest U.S. electrical utility, who paid $6 million for a house in Eastover. `` I think Charlotte will go right through this housing market turndown without a hiccup.''
Two-Song Commute
Wachovia banker Spence Hamrick recently moved into Myers Park, where he lives less than 3 miles (5 kilometers) from his downtown office.
``It takes about two Top-40 songs and I'm pulling into my parking lot,'' he said.
The recent jump in prices is generating more million-dollar sales. So far this year, 152 homes have sold for $1.5 million or more, up 35 percent from a year earlier, said Vicky Mitchener, co-owner of Dickens-Mitchener Associates.
Agents say that unlike most U.S. markets, sellers in Charlotte have the upper hand in price negotiations.
``Some buyers are having a hard time when they realize sellers aren't having to negotiate like the markets where they are coming from,'' Mitchener said.
Buyers like Randy Staub aren't grumbling. In April, he sold his condo at Miami Beach's oceanfront Akoya high-rise development for $860,000, he said. In August, he bought a suburban Charlotte home more than twice the size for $445,000.
``There's no comparison with the value I'm getting here,'' he said.
Adapting to Lifestyle
Some transplants from bigger cities complain that the nightlife in Charlotte is too quiet and that the city is too far from the beaches on North Carolina's eastern coast. Others appreciate the lighter traffic and the opportunity to follow the National Football League's Carolina Panthers, the National Basketball Association's Charlotte Bobcats and Nascar teams.
Charlotte real estate experts say the recent price gains are likely to continue, without approaching excesses such as Florida's that resulted in subsequent drops.
``We have no shortage of people coming from New York, Ohio, Michigan and Florida,'' said Pat Riley, president of Charlotte's biggest real-estate firm, Allen Tate Co.
The city prides itself on being down-to-earth.
``We don't do anything flashy or showy around here,'' said Karla Knotts, president of the Land Matters research firm in Charlotte. ``We call it plodding. This is not Vegas or Florida.'' |
