Brooks Henderson’s vivid imagery hints at the health of the new home market in the Lake Norman area.
“I live in Cornelius,” he said. “What raw land is left, is being sucked up and built on. ... Homes built in the 1970s and ‘80s? They’re starting to tear them down and put up new homes. ... During the downturn, nobody could justify spending $600,000 on a house just to tear it down. Now, on the water, it might be torn down. ...
“They buy it for $600,000, tear it down, build and end up with a house for $1.5 million.”
Henderson is vice president of the Lake Norman Home Builders and founder of Henderson Building Group.
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He’s upbeat about the new home market, as you can tell. Developers have returned to the market, he said, to buy land and offer lots to builders. They left in droves during the downturn. Production builders are opening new neighborhoods in areas where there still are empty tracts of workable sizes. New builder signs are sprouting along the N.C. 16 corridor through Denver, for instance.
His company specializes in the new custom homes and high-end remodeling, so he’s most familiar with the infill slice of the market.
There’s lots of activity in the area around The Peninsula, along Torrence Chapel Road and Bethel Church Road. Those neighborhoods have been there for a while, he said, and have been seeing tear-downs and extensive renovations.
Empty lots, perhaps overlooked because they weren’t on the water, are selling well. “Some of those lots have been sitting empty for 15 years,” he said. “They might have had ‘For Sale’ signs on them five times. Now, they’re selling.”
Some are bought by individuals, some by smaller builders who put up individual speculative homes for sale. Buyers are comfortable paying $500,000 to $600,000 for such speculative homes, he said.
Increasingly, buyers are investing so much money in renovations that they might as well be getting new homes. “They update the entire inside and outside of the home, before they move in,” he said. “That’s been true the past couple of years, and it shows no sign of losing steam.”
One of Henderson’s clients bought a waterfront home for more than $700,000 — then spent $300,000 on interior improvements and another $100,000 on the dock and landscaping.
If there’s a smudge on this rosy picture, it’s a labor market that’s tight and getting tighter. As building rebounds after the downturn, there just aren’t enough workers and subcontractors to meet the growing demand. Henderson said he’d seen one estimate that construction had reached 80 percent of what it was in 2005, before the housing slump — but the work force is only at 40 percent.
The tight labor market has really slowed us down,” he said. “You schedule (a subcontractor) two weeks out. If you’re not ready, you’ll lose them to another job.”
Lake Norman Home Builders Association: www.lakenormanhba.com
Henderson Building Group: www.hendersonbuildinggroup.com