The current economic downturn – which has sapped much of the energy from Charlotte's once-thriving real estate market – is the worst in almost 35 years, and likely will endure for at least another year.
So says John Crosland Jr., who's in a good position to know. He's chairman emeritus of the Crosland development and real estate firm – founded by his father in 1937 – and spent 28 years as its chief executive. During that time, he closely watched the ebb and flow of the region's real estate market.
Crosland also pursued his passion for affordable housing. He helped found the Charlotte chapter of Habitat for Humanity and was chairman of the N.C. Housing Finance Agency for 11 years, during which time the organization made $750million in loans and grants.
For his efforts, Crosland, 80, will be inducted into the N.C. Business Hall of Fame on Nov. 12 at the Westin hotel. He was one of four inductees chosen by the N.C. Chamber and Junior Achievement of Central Carolinas.
Crosland – who turned over daily operations at Crosland in 1999 after 44 years with the company – recently spoke to the Observer about the state of Charlotte real estate. Comments have been edited for brevity and clarity.
Q: What did you think of being named to the Hall of Fame?
I certainly in my wildest dreams wouldn't have thought about it. It's a real honor.
Q: What are you doing these days?
I'm trying to see if I can persuade this community to do something about affordable housing. I just finished a paper, about 55-60 pages. Of course, I keep changing it every day. I'm trying to point out some of the things that are probably not self-evident to most citizens.
Q: What's your take on the local real estate market?
Foreclosures are through the roof. We've never experienced anything like what we're going through now. It's pretty bad.
Q: Is that surprising given Charlotte's growth in the last few decades?
No. We were just a little behind feeling the effects. We were blessed for a while. It really held up.
Q: How does this compare to other downturns?
The most serious was 1973-74. With this one, I've talked to people who are really knowledgeable about the market. They say this is not the worst. They put us in a recession for only six months. I think they're way off, because I think this began two years ago.
Q: Is there a danger of having too much inventory?
We certainly do in condos and single-family housing.
With retail, most major tenants are cutting back on new stores, so that has slowed down quite a bit. Tenants are a little more difficult to come by. It may slow down to a situation we had in the late '70s, when we had no retail built for two or three years.
Q: Has Crosland put anything on hold?
Absolutely. We have one right down the street from my office (in the Carillon Building in uptown Charlotte). We had 400 units, and we put that on hold. That was going to be a rental project. In this market, we had to back off.
Q: How long will the downturn last?
I'd be able to put a lot of dollars in my pocket if I could figure that out. This is going to be much deeper than others, in my opinion. I'm hoping we come out of it in 2010.
Q: What will it take to turn the economy around?
Lenders are going to have to give some loans, and people have to give more money down on the front end. They want to be sure you're well-capitalized.