Nearly every major housing market in the U.S. has seen home values decline in the last year. The one exception is Charlotte, N.C. — the state's largest city.
Every month this spring, Charlotte has had the unique designation of being the only city — of the nation's 20 largest — where home values have increased since last year, according to Standard & Poor's/Case-Shiller home price index. To understand why, you just need to visit two parts of town — downtown and the northern suburbs.
Downtown Charlotte is booming with the new construction of office buildings. The promise of jobs is a magnet for some. The other part of the city's story can be told from a quiet neighborhood in one of Charlotte's northern suburbs that is home to a subdivision. A mix of single-family and town homes surrounds a classic-style town square. Places like this have popped up across the region, and they're filling up with transplants.
Pat Riley, who chairs the Charlotte Chamber and is president of the Carolinas' largest real estate firm, is also a transplant. He says Charlotte is attractive because of its low residential real estate taxes, the ability to get a lot of home for the money, as well as quality-of-life issues, such as high standards of medical care and higher education. Not to mention the climate, beaches and mountains.
About 1.7 million people live in the region. Last year, 70,000 people moved here and 35,000 new jobs were added. Wachovia Senior Economist Mark Vitner says that growth has kept demand for housing high.
"When you look at places like Charlotte, the supply curve is very elastic. So there really aren't the supply constraints that exist in other markets," he says.
Plenty of land has meant the region didn't have the tremendous run-up in prices that occurred in many other markets. With a lack of a so-called real estate bubble, there's been no bubble to burst. Instead, increases in Charlotte's home values have been slow and steady.
"We feel very fortunate to be in Charlotte, where things have held up so well," says graphic designer Phil Evans, who works from his 2,600-square-foot, two-story home. He takes a break on a front porch that's full of plants, rocking chairs and ceiling fans. Evans estimates his home is worth 20 percent more today than when he bought it eight years ago. But only about 1 percent of that increase has come in the last year. That's not much, but in places like Miami, Phoenix and Las Vegas, homes have lost about a quarter of their value in the same amount of time, according to the Case-Shiller index.
"I certainly don't take anything for granted, and I don't think this market is bulletproof at all. We're kind of holding our breath," Evans says.
Though Charlotte has been fortunate lately, this singular market is vulnerable to the same pressures facing other cities. Demand for homes has dropped, in part, because people considering moving here have not been able to sell their homes in other parts of the country.
In fact, economists say this region might experience a decline in home values akin to what's happening in many other cities across the U.S. But they expect any downturn in this area would be minimal and short-lived.