4 reasons Charlotte has a shortage of homes for sale
If you’re planning to buy a home in Charlotte these days, you might find yourself writing the seller more than just an offer.
With low housing supplies igniting bidding wars here and elsewhere, real estate agents say potential buyers are turning to an increasingly popular tactic: writing personal letters to sellers.
The goal of such notes, in a market flush with competing offers, is to sway a seller to accept yours.
In high-demand neighborhoods across the city – think Dilworth, Beverly Woods, Barclay Downs – sellers are being bombarded with letters that aim unabashedly at their heartstrings. Would-be buyers gush over the decor. They rave about the neighborhood. They talk about where they’d put the nursery.
Some buyers even slip family photos into the letters – to turn up the emotional dial.
“Your house is very special and we would be honored to call it home...” reads a letter one buyer wrote to a Charlotte couple who put their home on the market this year. “We love the beautifully updated kitchen, the tasteful colors on the walls, the spacious rooms, the amazing patio and backyard and the lovely wood floors.”
Often it’s real estate agents who suggest the letters, as they scramble to compete in a market where sellers hold the cards. Home construction isn’t keeping pace with demand, and available land in popular areas is in short supply.
A balanced real estate market has about six months of inventory – meaning it would take that long to sell the available homes. Charlotte and surrounding counties stood at three months’ average supply in June, according to Charlotte Regional Realtor Association data. Within the Charlotte city limits, inventory is even tighter: 1.9 months.
It’s a problem in high-growth cities nationwide: “We just don’t have enough homes,” said Lawrence Yun, chief economist for the National Association of Realtors.
Many mom-and-pop builders haven’t returned to the industry since the last housing downturn, he said. Other builders are struggling to find enough skilled construction workers.
With supplies tight, Charlotte’s fast-rising population is propelling demand. According to census estimates released this year, Charlotte added 17,695 people from July 2014 to July 2015 – the 10th-highest figure in the nation, just behind Denver and ahead of Seattle.
Some homes are bringing in multiple offers within 24 hours after hitting the market. Those competing bids are helping boost Charlotte’s home prices, which are setting new highs.
For those caught up in bidding wars, said agent Sami MacDonald, a letter is quickly becoming mandatory. In homebuyer classes she teaches in Charlotte, she passes out copies of a sample letter written by a young couple, complete with a photo of them with their golden retriever, Ellie.
“If you don’t have a letter in the next year, it will be like ‘Why didn’t they have a letter?’” said MacDonald, an agent with Savvy & Co.
Appealing to emotions
Industry officials say the letters are nothing new but have become more widespread in Charlotte lately, with inventory levels barely moving.
“All over the country, buyers are being very creative. They have to be,” said Pat Riley, president of Charlotte’s Allen Tate Companies. “They’re trying anything.”
Maren Brisson-Kuester, president of the Charlotte Regional Realtor Association, said one south Charlotte home she listed this year drew a letter from a young couple who pointed out which room they’d use as a nursery. The couple also included a copy of their wedding invitation and engagement photo.
“They pulled out the stops,” Brisson-Kuester said.
The letters also reflect how selling a home can be an emotional decision for a family. Buyers are trying to tap into those ties in their letters, sometimes mentioning their young children and promising not to change a thing in the home.
This is more than just a house and piece of land....This is your history and we would love for it to be our future.
Greg and Jo Dee Archetti, in a letter to the sellers of a northeast Charlotte home on which the Archettis put an offer
Greg and Jo Dee Archetti mentioned their two children, ages 4 and 8, in a letter to the sellers of a northeast Charlotte home on which the Archettis put an offer earlier this year.
In their letter, the Archettis said their children would be able to run around and explore the 2-acre property, providing “an ideal childhood” for them. The Archettis also complimented the sellers on the landscaping and requested their advice on how to care for it.
“This is more than just a house and piece of land,” the letter said. “This is your history and we would love for it to be our future.”
Jo Dee Archetti said she believes the letter, which her agent suggested the family write, was the deciding factor for the sellers, who accepted her family’s offer over three others.
“Absolutely,” she said. “We know that our offer was not the best offer. But our letter spoke to them.”
Agents said that’s not always the case. In the end, money talks, they say.
A letter “can sometimes be a tipping point,” said Cottingham Chalk Hayes agent Sarah Kennerly, who noticed such letters becoming a trend in Charlotte around January. Homes for sale in neighborhoods close to uptown, like Sedgefield and Myers Park, are more likely to attract the letters, she said.
“You’re not going to get it just because you sent a letter and you’re well below the other bid,” Kennerly said.
The letters can also be a gamble that backfires.
Leigh Brown, broker in charge of a ReMax Executive Realty office on South Boulevard, said she’s seen some sellers feel they are being “emotionally blackmailed” by the notes, which she calls “love letters.”
Brown said buyers can also turn off sellers by sharing too much information.
“We had a buyer tell how many infertility treatments they’ve been through before they got pregnant, and my seller was like, ‘Whoa, TMI,’” she said.
Brown said she advises her buyers to focus on aspects of the home they like and steer clear of private details.
“We’re in such an environment now where people can be offended over anything, you really want to stay away from anything that’s overtly personal,” she said.
We had a buyer tell how many infertility treatments they’ve been through before they got pregnant, and my seller was like, ‘Whoa, TMI.’
Leigh Brown, broker in charge of a ReMax
Letters that include photos and descriptions that identify a buyer’s race, religion, sex or other details could also lead to legal troubles for sellers, said Jack Capitano, a real estate litigation attorney for Charlotte-based Horack Talley. Such letters could open up a seller to allegations they violated the federal Fair Housing Act, if a buyer feels they’ve been discriminated against, he said.
Capitano said he’s not aware of such cases in Charlotte.
“Generally speaking, it’s going to be a very tough case to show a sale was based on discrimination,” he said.
Where are supplies headed?
It’s unclear when supplies of available homes in Charlotte might return to balanced levels, but real estate agents say it might not be soon.
Low supplies, they say, are discouraging potential sellers from listing their own homes, out of worry they won’t be able to find a home to buy. That perpetuates the cycle, agents say.
Brisson-Kuester, the Charlotte Regional Realtor Association president, said the area could be much closer to a six-month supply a year from now.
“We are inching up very slowly,” she said. “We are not sliding back the other way, which is the good news.”
More home construction would help. But industry officials say the rate of building remains well below the demand for new homes being created by population and job growth in the region.
According to Metrostudy, a Washington, D.C.-based firm that tracks new-home construction, builders in Charlotte were constructing homes at the rate of about 10,530 a year as of the end of March. To keep up with demand, they’d have to build closer to 15,000, said Jay Colvin, Metrostudy’s Carolinas director.
“We’re probably not going to get there for a while,” he said.
Industry officials say it’s tough to find large tracts in Mecklenburg County on which to build substantial numbers of homes. Such sites can be even rarer in areas closer to the city, they say.
‘Not about emotions’
Jillian Babb said she and her husband received about five letters when they put their south Charlotte home on the market in June.
Babb said her husband avoided reading them.
“He said ... ‘This is not about emotions. This is all about the numbers,’” she said. “And I read every single letter, probably twice.”
She said the letters appealed to her, because she had grown attached to the home where she and her husband have lived since 2012.
“I feel like … they’re going to take care of your home,” she said. “Leaving and choosing someone to replace you, you think about who’s going to take care of your home when you’re gone.”
The couple chose the buyer who made the best financial offer.
“For us, it was more about the numbers,” said Babb, who noted her home received seven offers within 24 hours of going on the market.
“I would love to have chosen someone who wrote the best letter,” she said.
“We had to choose the person who got the most to the table.”