Business

Is Charlotte's lure for newcomers starting to wither?

The Charlotte region's march of newcomers appears to be slowing.

Some indicators, including school enrollment, new electrical service hookups and reports from businesses that cater to new residents, point to a migratory slip.

Economists and others say the change, though just a hiccup and no threat to long-term prosperity, illustrates how Charlotte's economy is feeling pressure from a flagging national economy.

It could also ease traffic, pollution and a classroom space crunch, among other growing pains, said Douglas Shoemaker, a research analyst with UNC Charlotte's Center for Applied Geographic Information Science.

“A lot of towns have been overwhelmed by quality of life issues and providing services such as water and sewer,” Shoemaker said. “A lull would allow planners to get the upper hand again.”

The latest Census Bureau population data on newcomers isn't available until the fall. But institutions such as Charlotte-Mecklenburg Schools and Duke Energy have noticed a recent decline.

CMS officials expected to add 5,200 students this school year, but only about 2,900 new enrollees turned up. It marked the first time in four years that CMS forecasts overestimated enrollment.

Duke says new electric power hookups in the Carolinas fell to 38,391 for 2007 after increasing to a high 40,828 in 2006.

Gentle Giant, a Boston-area-based mover with a Charlotte office, has seen its once-strong flow of New Englanders into the region pull back, said Jon Vogel, regional branch manager. It started about six months ago, he said.

The company also specializes in out-of-state corporate moves. “We've had a lot of really big jobs get canceled. There isn't the drive to invest as much.”

Vogel said real estate prices have fallen so far in the Northeast that homeowners can't afford to sell at a loss: “So they're putting off moves.” Side business from relocations is also affected – fewer newcomers move their parents down after them, for example, he said. “All that stuff used to trickle down.”

The region has benefited this decade from transplants who spend money, buy houses and work available jobs, said Mark Vitner, senior economist with Wachovia.

About 88,000 newcomers moved to Charlotte in 2006-2007, and about 14,000 moved away, for a net population increase of 74,000. That's up from 80,000 newcomers in 2005-2006, with 30,000 moving away for a net 50,000 increase, according to an annual Observer analysis of census data released each fall.

Federal Reserve economist Matt Martin said he expects this fall's census data that counts newcomers to confirm a decline. He said he's been hearing a collective buzz since the fall about the slowdown of newcomers.

He said a tightening local job market is adding to the falloff. “There are not as many opportunities at the moment,” said Martin, who works at the Federal Reserve branch in Charlotte.

Jobless rates for the Charlotte area and the Carolinas have been higher than the U.S. rate, which was up to 5.5 percent in May from 5 percent in April. The region's jobless rate was 5.1 percent in April. The latest Carolinas unemployment figures are due later this month.

Vitner said he's expecting the newcomer slowdown to extend into next year, sapping tax revenues and local economic sectors that offer services “directly tied to population growth.”

Savvy + Co., a residential real estate company in Charlotte, is seeing out-of-state clients take a lot longer to relocate. A year ago, it took only a month or two for them to sell their homes and be ready to buy here, said owner Lexie Longstreet. Now it's more like seven or eight months or longer, she said.

“Sometimes they just say, ‘We can't sell our house, so we are going to stay here,'” she said.

Suzanne Meyer, owner of The Welcome Service, which dispatches welcome baskets in the Lake Norman area, also blames slower housing markets in other regions

Business “has slowed down a bit for us,” she said. Meyer's company targets affluent homeowners, those who buy homes with price tags upwards of $300,000.

Gina DeCarlo recently decided to leave Las Vegas for Charlotte. But it wasn't meant to be.

After more than 30 years in Nevada, she and husband Bill wanted a change. She visited Charlotte in late April and loved the area as much as her sister in Matthews predicted she would.

But DeCarlo, 50, doesn't want to sell her home in Las Vegas' sinking real estate market, one of the nation's hardest hit.

“I can't get what I want for my house,” she said. “The house has taken probably a $50,000 dump.”

She'd like to get $300,000 for the house she bought in 1982 for $100,000.

Martin and Vitner predict the slowdown of transplants won't create lasting economic woes.

“It's nothing to panic about,” Vitner said, noting that housing prices in hard-hit states should bottom out by the end of next year and those markets should loosen up. The flow of newcomers should pick up as those homes start to move, he said.

And Charlotte is already faring much better than most large regions, Martin said.

“I think this is all short-term,” he said. “I don't think the conditions that have driven Charlotte's growth over the last decade are all of a sudden gone.”

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