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Spike in University City home sales could boost economy

It’s no secret that real estate sales in Charlotte have been less than robust during the past four years. But after years of slow activity, the market may be making a rebound, according to UNC Charlotte economist John Connaughton.

“Home sale prices are up 7.3 percent, which is the best news I’ve heard in five years,” he said. “This is the light at the end of the tunnel we’ve been waiting on.”

If sales continue at that pace for the next three months, Connaughton said, it could be a good sign for the economy.

“This is our first indication the housing market might participate in the recovery of the economy,” he said. “If we could get at least three months of growth, it could change the economy significantly.”

According to the Charlotte Regional Realtor Association’s February report, closed home sales in northern Mecklenburg County are up 20 percent since February 2012. The average home sale price in that area is up 23.3 percent, from $143,740 to $177,244.

“A 20 percent increase in homes sold, February 2013 compared to last February, is good news for the area,” said Eric Locher, president of the Realtor association and of Carolina Multiple Listing Services Inc. “In looking a bit closer at the area’s pending contracts, demand is up 36.1 percent in February 2013 compared to last February.

“This is a strong indicator,” Locher said, “that northern Mecklenburg continues to be a strong attraction for homebuyers, possibly drawn to live near the numerous companies that are located in the University Research Park area and a growing UNC Charlotte.”

Locher also said he thinks many graduates of the university are staying in the area, increasing home sales.

“Charlotte is known as a great place to live for young professionals,” he said. “And though there has been slowed growth since the recession, Charlotte and the University area continued to experience growth. I imagine that many of the graduates of the university find Charlotte an attractive place to put down professional roots.”

Locher said he believes the rebound in the market is partly the result of supply and demand.

“Research shows that homebuyers increasingly want to live, work and play in the same areas, and University City certainly offers diverse retail and amenities, recreation and a variety of homes at varying price points,” he said. “Inventory is at equilibrium (about 5 months’ supply) across the region.

“However, northern Mecklenburg has become more of a seller’s market, with 3.4 months’ supply of homes remaining on market in February. This time last year there was almost eight months’ supply of homes in the University area, which made the area a solid buyer’s market. Decreasing supply puts upward pressure on pricing.”

Bill Scurry, broker and agent with Allen Tate Realtors, agreed that real estate activity in University City is picking up.

“There’s a low inventory of houses (for sale), as low as it’s ever been,” Scurry said. “Because the market’s been down so long, there’s a lot of pent-up demand. People want to buy homes again, but there’s not a lot to choose from. The ones that are selling are going fast.”

Scurry said homes in University City are selling much like the rest of the homes in Charlotte. The recent surge of home buying is affecting sales, turning it from a buyer’s to a seller’s market.

“The last house I sold got three offers in one day,” he said. “Sellers are getting the asking price, and sometimes more, because of the bidding wars.”

Milicevic: 704-358-6043
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