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Year: 2011

Surveying and plotting: What does the future hold for Charlotte real estate?

A new year offers a blank slate, an opportunity for a fresh vision and a time to reflect on the accomplishments and struggles of the previous year.

As we head into 2012, The Mecklenburg Times wants to know what our industry readers have to say about 2011 and what you expect from the new year.

If you’re sensing growth or believe the Great Recession will continue to plague the Charlotte area, please tell us about it. We encourage you to be as specific as possible. Also, your responses might be used in news coverage.

Please take a few moments to share your observations with us by sending your responses to the following eight questions to [email protected]. Please include your name, title and company.

Editor Deon Roberts will resume his normal column when he returns from holiday break. We wish our readers a safe holiday season and a prosperous 2012.

1. What kind of year do you
expect 2012 to be?

2. How was 2011 for your
business? Give specific examples.

3. What are your hiring
plans for 2012?

4. Do you plan to expand
or make cuts in 2012?

5. In what sections of the Charlotte area do you see opportunity?

6. Is the Great Recession over
for you and your business?

7. What signs are giving you
hope as a new year begins?

8. What signs are discouraging?

Name Game

The Charlotte Region Commercial Board of Realtors knew they had a great product with the online listings of the Charlotte Property Exchange. But what they didn’t have was a great name.  So they changed it this month. Gone is the Charlotte Property Exchange – or CPE – to be replaced by Site Index.

And for its dedicated users, the new name means – not much, actually.

“The name change hasn’t made that much of a difference to us,” said Mark Etheridge, a agent with Charlotte-based Argos Real Estate Advisors. “We changed our bookmarks and we go to it just as much now as we did when it was called Charlotte Property Exchange. It is still the first place where we go to look for available properties.”

The site’s popularity is not in question for users like Etheridge – who according to the CRCBR ranks as one of the top five users by highest number of logins for 2011. But those in charge of the online listings are hoping the name grows the user base. Site statistics show that the month of November averaged about 23,000 property views per day on the site. For October, that number was about 22,000.

“The name change was just rebranding,” said Theresa Salmen, executive vice president of the CRCBR. “Most of our (CRCBR) members already subscribe to the service. Part of the initiative is to get the name out into the public so the business owners do know the resource and understand it. They felt there was a lot of confusion over our former name.”

Salmen explained the board that directs Site Index did an exercise over the summer looking at other boards in the nation and decided Site Index was the right choice for a name.

“I didn’t really feel they needed to change the name,” said John Bosworth, owner of the Charlotte-based appraisal company John Bosworth and Associates. “They can call it whatever they want as long as the data is useful.”

But Bosworth admits that the new name doesn’t exactly scream real estate listings to him.

“If you told someone to use Site Index they probably wouldn’t think of it as a database,” Bosworth said. “That name just doesn’t necessarily make me think of a data site.”

Another thing the new name doesn’t necessarily include is the word Charlotte. The database has commercial and industrial property listings for Mecklenburg County and a far-reaching surrounding area of about 18 counties in both North and South Carolina. The decision to remove the word Charlotte from the name wasn’t taken lightly.

“We went back and forth with not having Charlotte in the name any longer,” Salmen said. “The challenge we had with our old name was it had so many words. That is why we started using the acronym. Something succinct was very important for us.”

Dropping the reference to the Queen City probably won’t impact the site’s usefulness for Marty McLaughlin, a broker with Charlotte-based Piedmont Properties of the Carolinas.

“I think that anyone who is going there or goes there as a result of a search is doing so with Charlotte in mind,” he said. “It still has probably the most Charlotte listings for commercial and industrial properties than the other websites we use.”

McLaughlin said his firm used LoopNet and CoStar as sites to search for property. Considered the two leading sites for national searches for commercial and industrial listings, the two companies announced an intention to merge in April. Federal regulators are still reviewing the merger plan.

Bosworth said he thought Site Index was poised to compete with LoopNet and CoStar for the Charlotte region. And, he said, it is on par with the national companies as far as quality of detail for properties specific to Charlotte.

“The accuracy of information is something we feel we need to reconfirm from LoopNet and CoStar,” he said. “Site Index is local and reliable. Having a local broker we can contact to confirm it is helpful.”

Although Charlotte is no longer in the specific name, Site Index isn’t completely devoid of a Charlotte connection. The new site’s web address is SiteIndexCharlotte.com and the tagline for the new brand is “The dynamic source for commercial properties in the Charlotte region” and displays at the top of the new page.

“I don’t think it bothers me at all that the word Charlotte is no longer in the official name,” said Ed McAfee, president and CEO of Charlotte-based Locus Real Estate Advisors and also a member of the CRCBR board. “Our database is so vast it reaches into properties in the mountains, on the coast and is really a comprehensive database on the region.”

McAfee said frequent users of the site haven’t really made their feelings on the name change known yet. Neither has traffic to the website changed all that much since the announcement in early December.

And he said he wasn’t too concerned about how the name change was viewed by current users. Part of the reason for the rebranding, according to McAfee and Salmen, was to court new users. The outreach effort hasn’t been lost on the site’s faithful.

“I think the name change was to expand to users not in the brokerage industry,” said McLaughlin. “I think the name was probably too long before. It is easier to reference and probably means more to an outside user.”

For John Culbertson, managing partner of Charlotte-based Cardinal Real Estate Partners, the name change is just a symptom of larger shifts in the way commercial properties – and all properties – are listed online.

“What we find at Site Index is a jumping off point,” he said. “I think there are going to be far more competitors out there aggregating information on available properties. Information itself is becoming a commodity.”

When it comes to national competitors like LoopNet and CoStar, Culbertson gave the nod to Site Index as far as accuracy on property data in the Charlotte area. But he did use the former acronym when referring to the site.

“Other aggregators like the CPE have eaten away at the base for those sites,” he said. “My prediction is that in the future this kind of information will be widespread and available to everyone.”

Culbertson said he thought the name change was a good idea for marketing Site Index, but it was just the tip of the iceberg.

“This industry is going to change radically and the brokers who say ‘I’m no longer the arbiter of information but I’m a guy who knows how to get a real estate deal done’ will prosper,” he said. “But the other kind – who think they are just the manager of information –  will go the way of the dodo.”

BAUGHMAN can be reached at [email protected]

Build up

This could be the year.

There is a cautious optimism being felt across the Charlotte homebuilding industry.

are seeing signs of an improving homebuilding market. Some of the bigger names among the residential construction industry, like Columbus, Ohio-based and Indianapolis-based , are upping their production and looking to expand into new neighborhoods.

Smaller builders, like Kelly McArdle Construction and McMillan Construction Management, both based in Charlotte, are also seeing their business improve as they head into the New Year.

The optimism rides on the coattails of 2011, which was a better year for homebuilders than 2010 based on the increased number of building permits issued in Mecklenburg County. There were 2,543 permits issued through November of 2011, up from the 2,347 issued through November of 2010, an 8 percent increase.

It’s good news for an industry that has suffered from a severe drop in construction activity since the Great Recession, causing construction companies to close their doors and many people to lose their jobs.

The most telling, and all-too-well-known numbers among the industry are these statistics tracked by M/I Homes: In 2006, the last busy year before the economic downturn struck the Charlotte-metro market, there were 24,804 home starts in the eight-county metro area. The projected number of home starts for 2011 is 5,300.

, vice president of sales and marketing for M/I, said the company believes the market has bottomed out and that there are signs of recovery. But still, she admits the industry is in a precarious spot and she’s not celebrating yet.

“We’re pretty certain, but that assumes there are no unexpected large catastrophes like a bank going out of business,” Lynch said.

Without that unforeseen devastating event, there is currently an undersupply of new homes in the eight counties tracked by M/I, which are Iredell, Mecklenburg, Cabarrus, Lincoln, Gaston, Lancaster and Union counties, as well as York County in South Carolina.

Lynch said foreclosures are significantly down, resale listings of existing homes have dropped, apartment vacancy rates are at an all-time low and unemployment is slowly decreasing.

“We are really undersupplied even without strong job growth,” she said.

Job losses played a key role in the housing downturn and Lynch compares today’s data with data prior to second quarter 2008, which she considered the breaking point for the homebuilding industry. It was that quarter when the metro area lost 53,000 jobs and “our market took a nose dive,” she said.

Currently, there are 11,777 new home listings, representing an eight-month supply at current sales volume levels. The supply has not been that low since October 2007, she said, and there haven’t been that few new homes for sale, based solely on the quantity, since December 2002.

New home starts

There were 3,153 new homes under construction in the third quarter of 2011, representing a two-month supply, Lynch said.

“That hasn’t been that low since third quarter 2007, prior to the worst-of-times,” she said. “On a unit perspective, you have to go back to 1995 to see that level of low inventory.”

In perspective, there were 5,498 homes under construction two years ago, she said. Prior to the extreme loss of jobs in 2008, there were more than 8,000 inventory units.

Timberstone homes had 101 houses in some stage of construction in the Charlotte area in December, said Curtis McCurry, Charlotte’s division manager for Timberstone Homes.

“We are busy like crazy,” McCurry said.

Crescent Resources is planning for future phases of the Chapel Cove development near Lake Wylie that will be built out over time, said company vice president James Martin. The builder has requested approval from the Charlotte City Council for phase 3 of Chapel Cove, which could include up to 314 lots on nearly 140 acres of a larger 320-acre site.

“This year, we have experienced renewed demand for homes and homesites at Chapel Cove, and sales volumes have steadily increased,” Martin said by email.

Atlanta-based John Wieland Homes had 110 new starts in 2011 in Mecklenburg, Union and Lancaster counties, said Walter Nichols, vice president of sales over the Charlotte, Raleigh and Charleston markets. He’s one more builder that is using the term “cautiously optimistic.”

Charlotte-based Kelly McArdle Construction is not anywhere near the size of Crescent, M/I Homes, Timberstone, or even John Wieland Homes.

But still, Danny Kelly, one of the company’s owners and the incoming president of the Homebuilders Association of Charlotte, says 2012 looks promising.

Kelly said his company has started two new big custom homes in the past 90 days, and hopes to begin up to three more in the next 60 to 90 days, but those deals aren’t final yet. Kelly McArdle has completed two homes in 2011, and hopes to complete six in 2012.

But Kelly’s not sold on the success of 2012 yet.

“For the first half of next year, things seem to be looking up,” he said. “I have no guess if that’s going to continue in the second half of the year. It could be a short spike. I’m trying not to get too excited.”

Despite that uncertainty, he’s witnessed an uplifted mood among homebuilders in the Charlotte area.

“Whether it’s a custom builder, remodeler, supplier, or one of the trades, everybody seems to be way more optimistic than we were in the last two years,” Kelly said. “Everyone is back to being steady and some people are actually busy.”

New communities

Timberstone Homes has an aggressive plan to begin building in seven new communities in 2012, McCurry said.

Those neighborhoods are Lawing Pond, Crossley Village and Houston Hills in Charlotte, Hackberry Place and Riverwalk in Concord and Green Meadows in Mint Hill, becoming part of 23 neighborhoods where Timberstone has a presence.

M/I Homes is also actively looking for land “right now,” Lynch said.

She couldn’t share specific site locations, but said they are in a “due diligence” period for four parcels including two in southwest Mecklenburg County and one each in Pineville and Matthews. Lynch expected those sites to be available for homebuyers in 2012. The company is also in contract for property in Waxhaw, and they expect to begin constructing homes in the $300,000 price point there in February.

Lynch said they also just opened model homes in The Farms in Lake Norman with homes ranging from $400,000 to $1 million and in Antiquity in Cornelius with homes priced beginning at $250,000.

Sales

Karla Knotts, owner of a smaller Charlotte development firm, Knotts Builders, said she hopes to have a 20 percent increase in volume in 2012. She sold 18 homes in 2011, up from 16 homes in 2010. Knotts’ dollar volume jumped 60 percent, she said.

M/I Homes also expects a jump in home sales. Lynch said the company closed on 255 homes in 2011 and is projecting 310 closings for 2011.

That’s a 15 percent increase and marks the company’s first growth since 2007. While that’s only 55 more homes, a number not that impressive when considering year-to-year closing increases in the boom years, percentage-wise, it’s a respectable number, she said.

M/I’s closings in third quarter 2011 were the best it’s had since third quarter 2008, with the exception of second quarter 2010 when home sales jumped due to a federal tax credit.

“The only quarter that beat it was artificially stimulated,” she said. “This is true, real upward closing volume.”

All those statistics mean something important at M/I Homes: the company has begun turning profits again during the past several months.

“We’ve turned the corner on profitability,” she said. “All builders are having difficulty with earnings these last few years, but in 2012, we expect to be profitable.”

RAMSEY can be reached at [email protected]

Internet scams trick vacationers with fake rentals

FORT LAUDERDALE, Florida — A family from Suriname was the first of a string of guests to arrive at Steve Chase’s million-dollar South Florida home expecting a vacation — only, Chase didn’t invite any of them.

All had paid thousands of dollars and had rental contracts for the Fort Lauderdale house. They were the victims of a growing number of scams that post occupied homes as available on vacation rental websites.

“I said, ‘I hate to say it to you, but this house is not for rent. You’ve been scammed,'” Chase recalled telling the family.

“It’s so sad,” Chase told the South Florida Sun Sentinel newspaper. “These were good people that had good intentions, and they were just shocked.”

Experts say Chase’s would-be houseguests probably never get their money back or see the scam artists punished because the fraud crosses international borders, making investigation and prosecution difficult.

Websites offering vacation home rentals act as clearinghouses where homeowners can list their properties. Prospective renters then connect with the owners independently of the websites.

Scam artists are increasingly taking advantage of that arrangement, falsely listing properties and requiring unsuspecting renters to pay upfront by wiring the money or sending a check to a post office box, experts say.

Chase’s neighbor, 85-year-old June Beard, also has received multiple visits from people who believed they had rented her beachfront home. Beard neither listed the property nor collected the rent.

“The poor people who have come and expect to rent our houses, it’s a shame,” she said.

Fort Lauderdale police say they have been stymied in efforts to locate, arrest and prosecute the culprits.

“Our problem is that the victims are from Canada and other countries,” said Sgt. Steve Scelfo, head of the Fort Lauderdale police’s Economic Crimes Unit. “The money’s not actually coming through Fort Lauderdale. We don’t have standing jurisdictionally to investigate it.”

Further complicating the cases is the fact that the homeowners such as Chase are not being victimized.

“He’s not out financially or really the victim of the crime,” Scelfo said.

Such cases are the province of the Internet Crime Complaint Center, a federal Department of Justice clearinghouse that analyzes online fraud, he said. Few of these cases, though, see prosecution.

In addition to the family from Suriname, Chase has had to turn away a couple from Quebec and a local man who wanted to inspect the property on behalf of a New Jersey banker interested in renting the home for six adults, four children and two dogs.

The banker, Michael McKenna of Pine Beach, New Jersey, withdrew his offer and now says he only works withreal estate agents on vacation rentals. “They’re definitely more trustworthy than going off those Internet sites,” he said.

Chase has had two fake listings in his beachfront neighborhood pulled from four websites, and he’s fighting for more accountability for vacation rentals.

“I’m trying to push for some legislation to hold these websites accountable for the information they post,” he said. “I’m making a lot of noise.”

Survey: Home prices down in most major US cities

WASHINGTON — U.S. fell in most major cities for the second straight month, further evidence that the housing recovery will be bumpy and weigh on the broader economy in 2012.

The Standard & Poor’s/Case-Shiller index released Tuesday showed prices dropped in October from September in 19 of the 20 cities tracked.

The decline reflects the typically fall slowdown after the peak buying season. Prices had risen modestly in April through August in at least half of the cities tracked.

Still, home prices have fallen roughly 32 percent nationwide since the housing bubble burst five years ago and are back to 2003 levels, according to the index.

Prices are even lower in hard-hit areas, such as Atlanta, Cleveland,
Detroit, Phoenix and Las Vegas.
Washington, New York, Los Angeles and San Diego have seen the smallest
declines.

Home values remain depressed
despite some modest progress in the
housing market.

Residential construction is likely to add to U.S. economic growth in 2011, the first time that has happened in four years. That’s mainly because apartments are being built almost twice as fast as two years ago — reflecting a surge in renting and weaker home sales.

The Case-Shiller index measures prices for roughly half of all U.S. homes. Prices are compared with those in
January 2000 and the index is based
on a three-month moving average. The monthly data are not seasonally adjusted.

Atlanta, Detroit and Minneapolis posted the biggest monthly declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing
crisis began. Prices rose in Phoenix after three straight monthly declines.

David M. Blitzer, chairman of S&P’s index committee, said steep price drops
in cities such as Atlanta, Chicago,
Cleveland, Detroit and Minneapolis were particularly worrisome because their gains earlier this season were so strong.

“Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness,” Blitzer said. “These markets were some of the strongest during the spring/summer buying season.”

Americans are reluctant to purchase a home more than two years after the
recession officially ended. High unemployment and weak job growth have deterred many would-be buyers. Even the lowest mortgage rates in history haven’t been enough to lift sales.

Some people can’t qualify for loans or meet higher down payment requirements. Many with good credit and stable jobs are holding off because they fear that prices will keep falling.

Sales of previously occupied homes are barely ahead of 2008’s dismal figures — the worst in 13 years. And sales of new homes this year will likely be the worst since the government began keeping records a half century ago.

Prices are likely to fall further once banks resume millions of foreclosures. They have been delayed because of a yearlong government investigation into mortgage lending practices.

Foreclosures and short sales — when a lender accepts less for a home than what is owed on a mortgage — are selling at an average discount of 20 percent.

Homeland sales?

Union County Association of Realtors President can add “TV Star” to her list of titles after the Dec. 18 episode of Showtime’s “Homeland” series. The drama about a CIA agent who investigates a returning American POW from Afghanistan has filmed several episodes in and around Charlotte this year and Bee happily tweeted on Dec. 18 that Homeland’s season finale was “her episode” after an approximately 20 second stint as an extra. Lori gave the play-by-play on Facebook after the episode concluded:

“I was in the shot (if you count the back of my head) where they were checking the incoming cars on day 2, and also walked behind Carrie as she was on phone to Saul. Both very brief and hardly recognizable, but it was a fun day and met lots of great people .”

Wonder if that means she can point to any particular property she reps and tout it “as seen on TV with Lori Bee” to help drive sales?

At least home prices are going to rise somewhere

While America seeks to recover from economic devastation, the nation of Iraq is hard at work trying to recover from physical devastation after almost a decade of conflict in the Iraq War. One place that financial experts over there are looking for recovery is the housing market. According to eDinar Financial – an Iraqi currency trading news site – Iraqi economist Abdul Hussain is expecting a turnaround in the property prices in Iraq. “The existence of failures of many mar the process of construction and reconstruction of the country,” Hussain said. “And the inability to provide the infrastructure lacking in most residential areas, (will lead) to increased property prices in cities with good services.”

In other words, prices will go up for properties in cities that are relatively unscathed by the conflict. Or, more simply, it’s about location, location, location. And the lack of bombed out craters in those locations.

Occupy Charlotte occupies dwellings

Charlotte City Councilman loves to be on the cutting edge in the Queen City. To demonstrate his connection with the people and the trends in the area he took a tour of the Occupy Charlotte protest site set up in Uptown just before the New Year. Dulin’s main purpose for being there was to check up on the protestors and be amongst the people. But he also went to be a secret shopper as it were. In a Tweet on Tuesday Dulin wrote: “I’m headed down at 10am to secret shop the occupy #clt encampment at Old City Hall. It will be interesting to count tents vs humans.” And when he arrived, Dulin found the main structure was less tent and more like a tiny house. After his initial inspection, Dulin tweeted: “This not a tent! It has a raised floor and heat.” And he followed it up with pictures.

If anyone needs us, we’ll be down at old city hall enjoying the digs with the Occupy Charlotte folks – that sounds better than many college dorm rooms.

It’s their party

On Tuesday, Dec. 20, the Meck Times decided to attend the monthly meeting of the .

It wasn’t a first, for us. The meetings are often filled with talk of inspection pass rates and response times, permitting numbers and revenues, and countless bar graphs compiled by the stat-happy Jim Bartl, the director of the county’s code enforcement office.

Needless to say, it’s a meeting only an industry professional would love.

As in meetings of yestermonth, the city and county government calendar listed the BDC meeting as taking place in the auditorium of the Hal Marshall Services Center, 700 North Tryon Street, Charlotte.

But when a Meck Times staffer arrived, the auditorium was a dark, quiet space with a total lack of charts or builders of any kind.

We discovered that the BDC meeting in December is always a holiday party. And, it’s held at the home of Jon Morris, the chairman of the BDC, not at the Hal Marshall Services Center.

Apparently, our party invitation got lost in the mail.

Planning department sponsored by Walt Disney

If you frequent the , you probably have noticed a neon sign in a conference room just off the lobby of the Eighth Floor offices.

But do you know the history of the Innovation Station?

With a name that sounds as if it could have been inspired by Walt Disney himself, the space is intended to encourage creativity.

It used to be located on the opposite side of the building from where the planning department is now located in the current site of the CATS offices.

According to Charlotte Mecklenburg planning director Debra Campbell, the former planning director, Martin Crampton, set aside the space as a way to avoid simply developing regulations for the bureaucratic process. Instead it was a place to be, well, innovative.

“It was a place for us to think about how we innovate, how we create systemic and sustainable change in our community,” Campbell said. “We used to have examples of all the projects that we’ve worked on so the public could come up to the floor and just peruse around and see the things we are doing.”

But displaying examples of innovative projects is something the department hasn’t done much of lately.

“I hadn’t thought about that in a long time,” Campbell said. “That was a really good idea to have the projects we worked on displayed. We don’t celebrate enough. It’s always on to the next thing. We are busy.”

Midtown Morehead Cherry Area Plan postponed

The ‘s planning committee has postponed its
decision once again on a recommendation about the Midtown Morehead Cherry Area Plan.

The committee voted Dec. 20 to keep the public comment
period open until its next monthly meeting at 5 p.m. on Jan. 17, at which time a vote is expected on the plan.

The is still working with residents in the area to make some changes to the plan. Those tweaks should be complete by the next meeting, said city planner Kent Main.

Sylvia Bittle-Patton, a member of the Cherry Neighborhood Association, said she is pleased with the progress made between the neighborhood group and the planning staff and she feels the association will be able to fully support the plan after those changes are made.

Main said some of the association’s concerns have been about future plans for a proposed Cherry Street connection, Cecil Street abandonment, and a
suggested “road diet” for
Charlottetown Avenue.

The plan provides a
framework for growth and
development in a 455-acre area bounded by South Tryon Street and the John Belk Freeway to the north, East Fourth Street and Queens Road to the east, Henley Place to the south and Dilworth to the west.

Home sales up 8 percent in November

November marked the fifth consecutive month of year-over-year improvement with an
8 percent increase statewide in existing home sales when
compared to the previous year.

According to statistics
compiled by the , total units sold for the month were 5,834 and total dollar sales were $1.12 million.  The average existing home sales price declined 8 percent to $192,511.

There were 1,686 units sold in the Carolina Multiple Listing Service in November 2011, a 13 percent increase from the 1,487 units sold in November 2010. Total dollar sales in November 2011 in the Charlotte MLS were $3.24 million, up from the $3.2 million in sales in November 2010, accounting for a 1 percent increase. That’s down 12 percent from the $3.67 million in sales in October. The average cost of homes sold in November 2011 in the Charlotte MLS was $192,472, down 11 percent from the $215,239 average cost in November 2010.

Brunswick and Carteret County led the state with the highest year-to-date sales growth with a 7 percent increase in total dollar sales, while Rocky Mount followed with a 4 percent increase, respectively. Carteret, Fayetteville, Jacksonville, and Rocky Mount all led the state in price appreciation with a 1 percent increase, respectively.