Mixed-use projects in south Charlotte are bringing new housing options to major corridor.
December 2, 2016, Charlotte Business Journal, Laura Williams-Tracy
There’s a mini housing boom happening in south Charlotte deploying a strategy that pairs walkable mixed-use communities with well-funded national homebuilders targeting a highly desirable school zone.
At least four large-scale communities are planned or are already underway near the Providence and Ardrey Kell roads area, just off Interstate 485, where commercial and residential development is taking the place of former fields and pastures. Over the next five years, more than 500 for-sale homes could dot the area, including luxury single-family homes priced over $700,000.
The developments set to transform the area are:
While the production may seem like a large number of homes coming to a relatively concentrated area, analysts say the market is under-supplied and likely to rapidly absorb the new homes.
Three years ago, this area had less than three months’ supply of new housing, when six to seven months is considered healthy, and only a five-month supply of building lots, when 18 to 24 months is considered healthy, says Jay Colvin, regional director of Metrostudy, which monitors construction in the Carolinas.
“The area was extremely undersupplied, and the recent activity is the reaction to that undersupply,” Colvin says. “Based on current absorptions the lot supply is still somewhat below demand and the housing is within the range considered healthy.”
Colvin says it will be important to watch how buyers react to higher pricing in the submarket. In 2013 about 50% of the new homes built in the area were priced in the upper $200,000s to low $300,000s. Now the majority of the market is starting in the upper $400,000s.
Among the new developments, Waverly is the furthest along, and the first home buyer moved into a David Weekley Homes house in May.
David Weekley Homes has exclusive rights to build 70 single family homes on 15 acres of the 90-acre Waverly mixed-use development that includes apartments developed by Terwilliger Pappas Multifamily and a Whole Foods grocery among other shops and restaurants.
Mark Gibbs, Charlotte division president for David Weekley Homes, says the neighborhood will include 70 single-family homes in the more private southern portion of the community with traffic signal access to Providence Road. There are 25 home sites in the first phase and a second phase is for sale. Approximately one- third of David Weekley’s single-family homes, priced from $420,000 and higher, are sold.
“We are seeing a lot of empty nesters right-sizing and also families that want the lifestyle Waverly offers as well as the excellent schools,” Gibbs says. “Our customers realize it is a very unique opportunity and are wisely taking advantage of the ability to build a quality home in such a well-planned community.”
David Weekley designed its portfolio of homes in Waverly using an extensive photographic study of those close-in Charlotte neighborhoods.
“We perceived it could be a like a new Dilworth/Myers Park as it is very walkable and is a great location,” Gibbs says. “The freedom to live, work, shop, eat and play in a wonderful environment without using your car is a very attractive concept.”
Gibbs believes the builder will finish single-family home building in Waverly in 2018. David Weekley is about to release a new phase there in early spring that will include 50 townhomes within walking distance to the grocery and other shopping. Gibbs says that building will finish in 2019.
Nearby, national builder PulteGroup has plans for 115 single-family homes off Tilley Morris Road on nearly 40 acres purchased in July.
PulteGroup contracted for the land more than two years earlier and has been working on entitlements for the property, including the extension of Ardrey Kelly Road through Waverly from Providence Road, says Jon Cherry, Charlotte division president for PulteGroup.
“It’s difficult to find property in south Charlotte,” Cherry says. “We’re fortunate to have tied this up and we’re excited about it. This particular piece of property along with the golf course where Rea Farms is going are probably the largest two tracks of land everyone has been tracking on for a while. There’s one remaining piece south of Waverly.”
PulteGroup hasn’t yet released pricing on the homes, which will be sized from 3,200 square feet to 4,600 square feet on 70-foot-wide lots.
Cherry says sales and construction will begin when road construction is complete, likely next fall.
“What makes our property unique to some of the others out there in Waverly or Rea Farms is that this is a traditional neighborhood,” Cherry says. “The property could have done 200-plus homes, but we went down to 115. It’s more of a traditional family-oriented community and Providence High School is a main draw. You can’t go wrong with the schools in south Charlotte.”
Cherry says the four developments planned for the area are nicely segmented. “We all know who we are trying to serve in the market. Quite frankly there’s very little overlap, and I think we will all be able to get what we need to be successful. I think the momentum created by the amount of things going on will be outstanding. The builders will feed off one another. It’s impressive what they are doing from a commercial standpoint.”
Nearby, Crescent Communities plans nearly 404 residential units within its 72-acre development called Providence Farm. There will be 396 garden apartments and eight three-story townhomes with attached garages, along with up to 30,000 square feet of shops and a 180-room hotel.
The multifamily phase broke ground late this summer and another 80 single-family homes and townhomes are planned.
Michael Tubridy, director of development for Crescent Communities, says the developer is currently evaluating builders for the for-sale residential component, including the developer’s own recently formed home building company, Fielding Homes.
“We anticipate first occupancy in the fall of 2017,” Turbridy says, adding that there’s collaboration between the multitude of developers leaving their mark on the area of concentrated development. For example, Crescent Communities sold land earlier this year to Childress Klein and Crosland in a deal that will lead to the development of some amenities for future residents at Providence Farm.
Finally, the residential portion of Lincoln Harris’ 194-acre project at Providence and Ardrey Kell roads will include at least 250 homes of varying size and model. When built out Rea Farms will include up to 650,000 square feet of office space, 250,000 square feet of retail, 500 multifamily units, a fitness facility, a day care and a magnet school.
National builder CalAtlantic, formed after Standard Pacific and Ryland merged last fall, will build two- and three-story townhouses and single-family homes with detached and attached garages. CalAtlantic closed on its first purchase of 15.3 acres in the development in May and plans to buy a total of 39 acres.
Representatives of the home builder declined to be included in this story because home sales won’t begin until 2018.
Carl Van Horn, market analyst with Market Opportunity Research Enterprises, says it’s no surprise that national builder dominate new product offerings in south Charlotte.
“When the market hears there’s no desirable land in a particular areas that is in most cases true for a small or local builders,” Van Horn says. “The national homebuilders always have access to capital to allow them to purchase the most desirable land. The national homebuilders will pay more for a sure thing, a guaranteed successful neighborhood than to go further out in the periphery areas to prospect for up and coming areas. The larger, national homebuilders are targeting an area like that because the commutes are shorter. They are not going to have trouble selling that product.”
Van Horn says the close proximity of new product shouldn’t be a concern either.
“The national builders have been clustering for years in every major city. As soon as first builder goes in and has success the others are going to try to mimic that. They all know that market can absorb the homes they are putting there. South Charlotte is a desirable place to build and as long as there is land there what they build is going to be successful.”