Homebuyers, sellers and brokers alike are abuzz over the Charlotte area real estate market’s resurgence in the first half of 2013. One aspect that surprises them most, though, is a comeback even for some of the area’s priciest homes in its most exclusive neighborhoods.
The Lake Norman area, dotted with high-end communities on or near coveted waterfront lots, is an excellent barometer for the rebound in interest in luxury homes – defined generally as those with sales prices of $1 million or higher.
The area, one of 30 geographic segments in the Charlotte region where the Charlotte Regional Realtor Association tracks data, has slightly more than a quarter of the region’s inventory of luxury homes. So area brokers look to Lake Norman to determine whether expensive homes are selling.
In 2013, after five years of a flatlined market, they are.
“What we’re seeing is a dramatic increase” in high-end buyers’ interest, said Pamela Temple, the team leader for Keller Williams Realty’s Mooresville office. “Confidence is up, and it’s exciting to watch.”
Data confirm the spike. The office’s median selling price rose nearly 20 percent from June 2012 to June 2013, Temple said. Last June, the office’s brokers sold six homes for $1 million or more; this year, they sold 15.
Still, the luxury market’s comeback is a little more complicated than the overall picture, she said. Curiously, very expensive homes are selling more quickly than more modest luxury homes, probably because buyers are rushing to secure expensive homes while market conditions still favor them.
“Where we’ve really seen an uptick is in properties over $1.5 million where the consumer has said, ‘Price points are so great and interest rates are so low, I’m going even higher,’ ” Temple said. “That’s why the median price is rising. You can get a $2 million house now for a million-five. I mean, c’mon.”
A slow rebound
As is the case with the market at large, the resurgence in luxury home-buying hasn’t come close to the glory days of 2006 and 2007, the ultimate sellers’ market that evaporated in the bubble-bursting financial crisis of 2008.
Experts caution that the spring selling season might weigh the number toward a stronger first half. But there’s no doubt that the luxury market is gaining momentum.
“Early first quarter is when it turned,” said Stephanie Gossett, Allen Tate Real Estate’s branch manager for the Lake Norman area. “Every time a job growth report comes out, it makes people more comfortable in making that move they’d been thinking about but held off on for the last four or five years.”
Simple supply and demand is driving the resurgence, too. Since 2007, homebuilders just haven’t been building in that price range because virtually no one was buying. That’s led to a sharp drop in available inventory, especially in the high-end range, and corresponding increase in interest and listing prices.
The luxury market hasn’t rebounded enough yet for builders to respond to market demand, said Geoff Bowen, who co-owns Mooresville-based Princeton Builders and is serving this year as president of the Lake Norman Home Builders Association. “I’m not sure there’s really that much difference” in luxury building this year, Bowen said.
As the market inches back to normal, though, demand will grow and building will resume – though probably not at the fevered pre-recession rate, said Eric Locher, the Realtor Association’s president and a broker for Cottingham Chalk Hayes in Charlotte.
The market just needed a spark, and the combination of a recovering economy and low but rising interest rates was enough to shake the segment awake.
“Folks are concerned that interest rates are going to go up. It’s a very valid concern,” Locher said. “It also brings people off the dime, saying, ‘OK, we’ve hit bottom, and we don’t want to ride up this curve too much. Let’s go ahead and make an offer on this house.’ And sellers are thinking the same thing.”
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