Millennials, and fintech, flock to Charlotte

Published: Oct 11, 2021
Updated: Oct 08, 2021
Photo by Carissa Rogers on Unsplash

By Brian Boucher

At the end of 2020, data from Realtor.com pegged Charlotte, North Carolina as number three among the hottest markets for 2021, and that prediction has been borne out in style. As of August, the median list price of a single family home was a healthy $350,000, nearly 20 percent over last year’s figure, according to Canopy Realtor Association. 

Real estate experts have high expectations for the city’s future. A recent report on trends in real estate, written by the consulting firm PwC and the Urban Land Institute and based on the insights of more than 1,600 professionals, placed Charlotte among its “boomtowns,” which are attracting “far more than their share of smart young workers” and which were making great strides in recovering from COVID-related job losses. 

The report also praised it as a “magnet” among “18-hour cities,” so named for having a downtown that is active outside of the working hours of 9 to 5. The city was forecast to be number 11 in the country in construction activity in 2021 to meet growing demand, so there will be homes on the market for those looking to invest.

It is “just a frenzy” for sellers, realtor Jill Castle told news outlet WCNC, which reported that one broker was even going door-to-door in desirable neighborhoods, soliciting homeowners who might be interested in selling. 

As seen in other hot areas around the country, buyers are going to lengths like waiving appraisals and inspections; one house reportedly went for $125,000 over the list price, wildly unusual for this market. Canopy Realtor Association’s August 2021 sales data showed days on market averaged a lightning-fast 14 days compared to 34 in August 2020, so buyers don’t have time to think twice.

Demand is expected to grow, as officials say 100 people are moving to the city every day, and they are all looking for housing. 

A favorable tax climate, and big city amenities

Flick/formulaone

“Over the last 18 months, the housing market has been crazy,” says Yongqiang Chu, director of the Childress Klein Center for Real Estate at the Belk College of Business at the University of North Carolina at Charlotte. “Certainly nobody would have predicted this, especially at the start of the pandemic, when the worry was that it would take a big hit.” 

He described the 20 percent spike in median home price as “very dramatic, even considering the rapid growth Charlotte has experienced even in the last five to 10 years.”

In the decade before the pandemic, a favorable corporate tax environment was already drawing companies to Charlotte, with their employees following. Those employees have found “reasonable” real estate taxes, and state taxes that are “middle of the pack,” according to U.S. News and World Report. As a result, prices had increased by six or seven percent a year, says Chu. 

All those people moving in find the sorts of amenities of bigger cities. There’s a good airport, NBA and NFL teams to follow, several top-notch museums and, unlike most other Southern cities, they experience all four seasons. Aside from the expected barbecue and “meat and three” joints, Charlotte has the full panoply of international cuisine, including Asian, Latin, Italian, Ethiopian, French, New American, etc. Locals rave about restaurants like River’s Edge, with its “breathtaking” river views; Haberdish, which updates Southern classics; and Amélie's French Bakery & Café, where they can enjoy “eclectic” decor and pastries inspired by Gallic classics. 

Housing costs are in line with smaller markets. And the growth hasn’t caused some of the problems it can often bring, like the major traffic that plagues other cities. Buyers who got in five years ago, according to Freddie Mac’s Home Price Index, have seen returns of an incredible 56 percent on their investment. 

Renters play a big role in the Charlotte market

In Charlotte, renter-occupied households make up for 41 percent of the housing stock, so there are plentiful opportunities for investors. The city’s demographics are attractive as well.

“Charlotte is the number one city in the country attracting millennials, because it’s one of the largest drivers for financial services,” says Thomas Stepp, director of investor services at Mynd. 

Charlotte is the country’s second-largest financial center; Bank of America and Wells Fargo are among the city’s top employers. 

“Companies that would previously have been based in Manhattan are now moving bankers who are in years one to five of their careers to Charlotte because of the city’s affordability,” Stepp added. 

Millennials are the population most likely to be renters, and demand has pushed up rents five percent year-over-year. Those junior bankers find their money goes much further than in places that previously held a monopoly on the financial industry. 

“You can pay half the price you pay in New York or New Jersey to get a home twice the size,” says Chu. “So the quality of life is much higher.” 

The prominence of financial institutions in Charlotte translates into reliable returns, and low vacancy rates, for property owners. 

“If you’re worried about rising interest rates or inflation, there is probably no better place to invest than in a city with a healthy financial market, because banks do very well in that climate,” says Stepp. 

Being such a prominent center of finance, says Chu, “Fintech locating here makes a lot of sense. This will have a big impact on the local business environment.”

All the same, future growth is not expected to be at stratospheric levels, but rather at the steady pace that ensures growth without major corrections to come.

“Cities like Charlotte, Raleigh, and Atlanta offer a very balanced return for investors,” says Stepp. 

Tech sector lagged, but is picking up

It’s true that more rapid development of the tech industry (which has driven prices in places like Austin through the roof) may be hampered because Charlotte’s higher education offerings, notable as they are, suffer a bit by comparison with the area a couple of hours’ drive to the east. There, the “Research Triangle,” made up of the tri-city Raleigh-Durham-Chapel Hill area, is home to North Carolina State University, Duke University, and the University of North Carolina respectively. 

Chu puts the city’s failure to attract Amazon headquarters a few years back, despite what local honchos called an “aggressive” bid, partly down to the lackluster tech qualifications among the area’s college graduates. 

All the same, employment in the technology sector is growing in Charlotte, with Amazon opening a third fulfillment center here soon, promising hundreds of jobs. With fintech following big finance to Charlotte, the number of tech jobs in the city has increased by 30 percent since 2013, a rate twice the national average. 

Biotech manufacturer Hydromer recently moved its corporate headquarters to the metro area. And the city is supported by a diverse economy that includes seven Fortune 500 companies: besides Bank of America, there’s Honeywell, Nucor, Lowe’s, Duke Energy, Sonic Automotive, and Brighthouse Financial.

What’s more, Charlotte is likely to become only more appealing as the city implements its comprehensive plan, which states: “All Charlotte households will have access to essential amenities, goods, and services within a comfortable, tree-shaded 10-minute walk, bike, or transit trip by 2040.” 

One local magazine points out that a handful of districts, including Eastover, Commonwealth, and the Arboretum, are well on their way to being “10-minute neighborhoods.”

Gold, railroads and civil rights progress

The tremendous housing market isn’t the city’s first gold rush. America’s first literal one started here in 1799; some locals still pan for gold in area streams. The city touts itself as a prime example of the “New South,” and played an early role in the Civil Rights movement.

Initially settled by the Catawba Native Americans, Charlotte is organized around the Nations Path, a major Native American trading route, rather than the North-South orientation of most colonial-era cities. (Its “uptown,” as a result, is named not for its placement, but rather for its elevation.) 

The so-called Queen City was named for the wife of King George III before the Revolution, but it rose up against England even before the Declaration of Independence. One British general described it as “a hornet’s nest of rebellion,” and it still proudly bears the nickname “the hornet’s nest” (lending a name to its NBA team, the Hornets).

Its first boom was as a post-Civil War cotton processing center, and its second happened with the foundation of a major railroad in 1852, around the time that regional leaders started to talk of a “New South.” 

Colleges were founded to serve the city, including the historically black Johnson C. Smith University, Queens College and Davidson College, later joined by UNC Charlotte. (With over 30 institutions of higher education in the city or within 50 miles, it is today one of the biggest school districts in the Southeast.) Its third growth spurt came with a military base during World War I. 

In contrast with North Carolina’s history as a Confederate state in the Civil War, in the 1960s Charlotte was the site of the one of the largest sit-ins in the South, organized by Smith University students. In 1963 — a year before the 1964 Civil Rights Act was passed — the mayor welcomed demands for integration while other cities were responding with fire hoses and police dogs. 

A banking center, and home to a diverse population 

Charlotte’s role as a financial center dates back to the 1970s. In the 1990s, Bank of America became the first coast-to-coast bank when a local financier bought it and moved to the Queen City, making it second only to New York as a banking town, a ranking it has maintained ever since.

A major Latino influx started in the 1990s, diversifying Charlotte along with smaller communities of Vietnamese, Chinese, Italians and others. In the decade starting in 2004, the metro area was the fastest-growing in the U.S., hitting a million residents. 

With a population of about 2.66 million, the Charlotte metropolitan area is now the 23rd-most-populous in the U.S. For recreation, those millions enjoy North and South Carolina’s sandy beaches and the nearby Smoky Mountains. The city’s sports offerings include NASCAR races on the organization’s longest track as well as the NFL’s Carolina Panthers (along with the NBA’s Hornets). 

Cultural offerings range from the NASCAR Hall of Fame to the Bechtler Museum of Modern Art, housed in a building designed by postmodern star Mario Botta and—an unusual one—the Museum of the Alphabet, studying thousands of years’ worth of writing systems.

Charlotte’s relatively affordability, along with its high quality of life, and its broad and hardy economic base, create a solid foundation for a healthy housing market, so expectations are that it will continue to entice residents, and investors who will cater to them.


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