Coldwell Banker

Home » ‘Strong quarter in the books’ for Charlotte’s new home market

‘Strong quarter in the books’ for Charlotte’s new home market

Homebuilding picked up steam in the Charlotte region to start off the new year.

In the first three months of the year, construction of new homes rose 16.4% from last year’s first quarter to total 2,695, according to housing analysis firm Metrostudy. Other positive stats from this year’s first quarter:

The number of previously vacant new homes that are now occupied (2,725) jumped 23.5%
The number of annual starts surveyed through the end of the quarter (11,372) increased 7%
The number of annual closings (10,922) rose 10.6%
The news wasn’t all good, however, says MetroStudy, a division of Washington, D.C.-based Hanley Wood.

Jay Colvin, regional director of Metrostudy’s Charlotte area, said in the report that job growth and in-migration of residents helped propel Charlotte’s new home market to another strong quarter. But he added that development activity progressed slower than “many would prefer.”

“Two thousand and nine hundred lots were delivered in the first quarter, marking the third consecutive quarter to approach or cross over that threshold,” he said. “This would signal enough lot development for the market to continue on its current growth path, but it also highlights how far the market still has to go in order to reach the level of lot production needed to meet or exceed basic demand.”

New home production increased overall. Though, a segment that makes up about 18% of Charlotte’s home starts — product priced under $200,000 — saw activity drop 18% from a year ago.

The number of vacant developed lots in Charlotte during the first quarter (20,017) represented a 21.1-months supply, which remained within what Metrostudy considers a healthy range based on the time it takes to develop a replacement lot.

As for new townhome development, builders began construction on 305 properties in the first quarter. That’s 5% more than the same period in 2016. Annual townhome starts (1,478) were up 23%. A total of 632 townhomes were under construction in the first quarter— a 4.6% increase.

Closings were recorded for another 378 townhomes in the first quarter — up 68%. The number of 1,375 annual closings jumped 35% from the previous year.

Average sales prices are expected to post moderate growth this year. Closing prices of new homes rose 2.9% in the first quarter, according to the Metrostudy report.

“Overall our expectations for 2017 remain the same: a year of robust growth for production, with slightly higher inventories, and price appreciation within a healthy range of 3% to 4%,” notes the report.

Here’s a housing inventory and supply breakdown by price point for the Charlotte market:

$0-$149,000:

Inventory: 2.5%
Months of supply: 3.6
$150,000-$199,000:

Inventory: 11%
Months of supply: 5.6
$200,000-$249,000:

Inventory: 14%
Months of supply: 5.8
$250,000-$299,000:

Inventory: 21%
Months of supply: 5.8
$300,000-$349,000

Inventory: 15%
Months of supply: 5.6
$350,000-$399,000:

Inventory: 11%
Months of supply: 7.6
$400,000-$499,000:

Inventory: 13%
Months of supply: 10
$500,000 and up:

Inventory: 12%
Months of supply: 10.5

Jenna Martin
CBJ