Luxury Real Estate Snapshot: North Carolina
With its hearty economy, varied landscape, and
ideal climate, North Carolina has rapidly become a
magnet for wealthy homeowners
by Maya Roney
Ask a North Carolinian about the housing bubble
bust, and you might get a quizzical look. Bubble?
What bubble? It never happened here. In any
conversation about local real estate, they will,
however, be happy to tell you about "half-backers."
Not a football player, but a name for affluent
professionals and retirees who move from the
Northeast to Florida and halfway back again, to
North Carolina.
This migration pattern has contributed to the
state's recent population boom and continued home
sales growth, even as the U.S. housing market gets
whacked due to years of speculation. North
Carolina has moved past New Jersey as the 10th
most populous state as its population grew 2% in
2006 to 8.8 million, according to the U.S. Census
Bureau. In 20 years, it is expected to be the
country's seventh most populous state.
The influx seems to be keeping North Carolina's
housing market afloat. Existing home sales in the
state were up 4% year to date as of November,
2006, vs. a 4.4% year-to-date decline nationwide.
Compared to November, 2005, North Carolina home
sales slipped 4% in November, 2006, while U.S.
sales fell 10.7% in the same period.
Business Bait
"[The population growth] bodes well for
real estate, both for real estate investors and
practitioners," says Tim Kent, executive
vice-president of the North Carolina Association
of Realtors (NCAR). "We have every indication
that 2006 was the sixth straight record year for
home sales in North Carolina."
There's something addictive about North
Carolina, the site of the first English colony in
the Americas. And it's not the state's abundant
tobacco crop. North Carolina's strong economy
might have something to do with the recent
population boom (and vice-versa). In the 2005-06
fiscal year (July 1 to June 30), the state's gross
domestic product grew 3.9%, outpacing the
country's 3.5% growth. North Carolina also added
120,000 jobs in 2006. Roughly 20,000 were in
construction, and about 10,000 were in financial
services at firms like Wachovia (WB)
and Bank of America (BAC),
both based in Charlotte.
"We have a migration of people, profitable
banks, a good university system, and a strong
military presence," says Harry Davis,
chairholder and economist for the North Carolina
Bankers Association. "When you put all those
factors together, it creates a good economic
environment, and a strong real estate sector."
Forget Florida
Another feature attracting masses to the Tar
Heel State? Value. Whether you are relocating for
your job or purchasing a second home, as a general
rule, you can buy more house in North Carolina
than you can in Palm Beach. And you'll still get
the ocean view.
"I see a lot of people saying, 'As soon as
I can get my home in Florida sold I'll move [to
North Carolina],'" says Pat Handley, a
realtor with McKee Properties in Cashiers.
The Outer Banks, with its 100 miles of beaches,
has always been a popular destination for
homeowners and vacationers from the Northeast. The
climate is more temperate than in coastal areas
further south, and the houses, though costly, are
not unattainable. The most expensive beach homes
on the market will run you about $5 million. In
the case of our featured house in Wilmington, that
price buys seven bedrooms and eight bathrooms on
the ocean.
The New Aspen
As half-backers make their way to the
undervalued mid-Atlantic, another kind of
migration is going on within North
Carolinahomeowners are fleeing the hurricanes and
sweltering summers of the coast, and taking refuge
in the mild weather of the western mountains.
Cashiers, a tiny resort community in the Blue
Ridge Mountains, was settled about 200 years ago
by pioneers from the south looking to escape the
summer heat. Today, it still has four livable
seasons and some stunning luxury homes. Cashiers
also has plenty to do recreationally, with golf
courses, streams for kayaking and canoeing, miles
of unspoiled forest for hiking, and even skiing.
"Our area has been likened to Aspen as it
was in the '50s, before it was developed,"
says McKee Properties' Pat Handley, who is
marketing one of the community's highest-priced
propertiesa private mountaintop estate with
valley and mountain views from every roomfor
$4.48 million.
Growing Market
Homes over $5 million are still a rarity in
North Carolina, especially when you leave the
secluded mountains or the coveted coast.
"Emerging is a good word for it," says
Ed Willard, an agent with York Simpson Underwood,
who has a 10,000-sq.-ft. home on the market for
$3.895 million in one of Raleigh's most desirable
neighborhoods. The average house in Raleigh, a
burgeoning business center, goes for about
$250,000, Willard estimates.
The relative inexpensiveness of North Carolina
homes can make selling at the highest end a
challenge. "The high-end market down here is
a little rough," says realtor Martha Bick,
whose 15,000-sq.-ft. chateau-style listing near
Durham, at $7.763 million, is the second most
expensive property in the state. "But it
might be $20 million in New York," she adds.
Click
here for a selection of the Hottest Homes in
the Tar Heel State.
Roney
is Real Estate writer for BusinessWeek.com.
