Charlotte sees double-digit drops in housing starts, closings

The number of new-home construction starts in the Charlotte metropolitan area fell 48 percent in the first quarter, hitting its lowest level in at least five years, according to national housing-research firm Metrostudy.

Meanwhile, the inventory of vacant lots in the local market is at an all-time high, the firm says.

In the latest quarter, there were 3,145 new-home starts in the Charlotte area, Metrostudy says. That's a drop from 6,050 during the same period last year.

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The number of quarterly starts here has not fallen below 4,000 since the first quarter of 2003, according to Metrostudy, which monitors the start of construction visually rather than by counting the number of building permits issued.

Closings on the sale of local single-family homes fell 35 percent to 3,801 units in the latest quarter from 5,844 a year ago, Metrostudy says.

In gauging the market's vacant-lot inventory, the firm counts 40,825 lots in developing communities at the end of the first quarter. That equates to a 26.7-month supply, increasing from the 21.5-month supply at the end of 2007.

An 18- to 24-month supply is considered a good balance between supply and demand, says Bill Miley, manager of Metrostudy's Charlotte division.

"Charlotte's new-housing market is in a correction phase, as it is subject to the same problems other markets are experiencing nationally," Miley says.

He points to the clamp-down on credit underwriting, weakness in the national economy and a lack of consumer confidence. However, Charlotte's housing market remains strong, with closings exceeding starts, he says. "Despite a slowdown in job growth, the local economy remains healthy, and interest rates are near record lows."

Metrostudy says the top single-family, detached new-home subdivisions in the Charlotte market, based on annual starts at the end of the first quarter, are Carolina Lakes/Sun City, Berewick/Village of Evanton, Hamilton Lakes, Westmoreland Acres and Shiloh Commons.

Metrostudy's local analysis covers an area comprising Mecklenburg, Cabarrus, Gaston, Anson, Union and York counties.