Why Would A Luxury Builder Developer Panel Say No To Amazon?
Why Would A Luxury Builder Developer Panel Say No To Amazon?
Asked if they were in favor of Raleigh as a possible site and the second headquarters for Amazon they said an emphatic no? But why? Read on for my insight after attending a recent Triangle Business Journal business breakfast. To educate and communicate is my goal as a Raleigh Realtor. So my perspective is one of more curiosity. Following the Amazon story now for months, I am optimistic about the notion, but curious about what this will really do to the real estate market in Raleigh, Durham, and Chapel Hill (RDU). How will our life be with this gigantic change?
Curious about what these experts had to say?
Panelists John Rufty, owner of Rufty homes, Rex Bost, owner of Bost Custom Homes and Tim Smith, CEO of Prestonwood Development, all agree that the sudden influx of people would drive housing prices up. “I think Amazon would bring too much too fast,” Rufty stated. Bost agreed and said it will change the dynamic of our way of living here in the Triangle. He went on to say “I think we have enough growth of an industry that we don’t really need an Amazon.” Smith explained that for every relocating employee, there are potentially three family members!
What does Amazon want?
Amazon wants space and infrastructure and a mass transit system and there’s just not one around here. Since I agree, I attended the Regional Transit Alliance Summit later that same week to find out what is planned and how I can help. This area needs a system to both get people off of the roads and to get them into the cities from rapidly developing desirable outlying areas. All while preserving our greenspace and providing affordable home options.
What happens without Amazon?
With or without Amazon, land costs are nearly double from those 8-10 years ago as supply exceeds demand, particularly in Wake County. What was $600,000 ten years ago costs $1M today. How long will rising prices continue in our area? Will there be a bust soon? These experts believe that the upward price trend will continue for at least the next 2-3 years because the RDU area is a desirable place to live. University graduates stay here, new businesses move in and existing businesses expand. In the last six months alone, there was an increase in homes sold over $1M of 37% which when combined with another 15% for presold new homes not documented in the Multiple List Service is closer to 52%.
Why the uptick in demand for million dollar homes?
Why? There is pent-up demand from the effect of 2009-2013. We are attracting wealth to our region. Amazon took a hard look at RDU and so are other big companies with big presences including Apple.
What do luxury home buyers want in a home?
What do luxury home buyers want? Our panel was unanimous that convenience and walkability is the top priority. Buyers in a luxury class also want more high-end features and all the new technology. HGTV and other media have these discriminating buyers drooling for all the bells and whistles. They also want more square footage. Open floor plans with linea doors or moving walls that merge inside with expansive outdoor living areas are a huge emerging trend. Parade of Homes winners in Avalaire, an upscale community in North Raleigh offered superb spaces for luxury buyers who yearn for this type of home design. Wealthy homebuyers work hard and want the luxury where they can relax.
A popular trend for new custom luxury homes in Wake County
An aging population In key communities cashed in big with local custom builders. Teardowns of older, dated homes on beautiful, spacious lots give rise to new larger custom homes in well-established and prestigious North Ridge Country Club. We see the same thing “Inside the Beltline” which is close to downtown Raleigh and in once flagship communities such as MacGregor Downs. Some high-end buyers, unwilling to move to suburban areas will pay top dollar for a newly constructed custom home close to town. Rufty said tear downs and custom home build account for about 30% of his business.
Why are the costs of luxury homes rising so much?
Another key issue emerged. Probably unknown to most of us, there is a lack of skilled construction tradesmen. Current laborers are putting in overtime, paid a premium and there are resulting delays in completion of homes. Luxury custom builders who must compete with large National builders for a limited skilled labor pool feel the most impact. Up go the price tags for luxury custom homes.
What is an alternative to high prices for luxury homes near Raleigh?
New all-encompassing communities such as Briar Chapel in Chatham County are an affordable option for buyers who are willing to sacrifice proximity to Raleigh for price and value. This community features homes from $300 to $1 million along with commercial areas within walking distance. Once home, residents don’t venture far to enjoy coffee shops, restaurants, services, banking, and local concerts. Golf, fitness, and outdoor activities are also included or right nearby. Long trips to the city are not the only option for homeowners who want a vibrant lifestyle.
Chatham County’s newest community offering state of the art luxury homes
Preston Development is developing Chatham Park near Pittsboro which will mimic Briar Chapel. Nearly $50 million has been spent thus far for infrastructures such as roads, water, and sewer. Another $50 million is planned for 2018. The residential home building should begin in about 12-14 months. According to Tim, besides walkability, high-end features and space; buyers in the $1 million price range also demand structural integrity and energy efficiency.
Enticing and sensible options for luxury home buyers in Chatham Park
High-end home buyers will spend more for systems that save energy costs. In Chatham Park, most homes will have remote reading meters to track energy. Electric car chargers are being installed in all homes. Chatham Park homes will also offer greywater recycling whereby shower water is reused for outside irrigation to help alleviate water shortages. Stormwater management systems will keep water to use locally instead of sending this water to the city. Thee expert panelists believe that homes prices in Chatham will double. It is a great time to invest in a new home in Chatham Park.
Where is the biggest demand for luxury homes in Wake County, NC?
What existing areas in the Triangle have the biggest demand for luxury homes? The panel cites that the real growth in the home sale IS in the $1 million-dollar price range. In the past six months, 116 homes that cost more than $1 million sold in the Triangle, quite a healthy pace.
In MacGregor Downs, Cary, 6 homes sold ranging from $1.1 – $2.2 million and in Sunset Hills, Raleigh, The Oaks, Chapel Hill, and Hayes Barton, Raleigh, 5 homes in each community sold between $1.0 – $1.9 million. 4 homes sold that cost from $1.5 – $2.2 million in Avalaire and in Budleigh, Raleigh, there were 4 home sales ranging in price from $1.5 – $2.8 million.
What does all of this mean to you?
The bottom line? Even if Amazon HQ2 does not land here in RDU, demand is already outpacing supply for resale homes and new homes. Land and building costs are rising. This trend is anticipated to continue for the foreseeable future for the Triangle. Interest rates are rising, and this will continue. Higher rates affect what buyers can afford to pay for your home.
If you are thinking about selling your home over and it is worth more than $600,000 and you are looking to buy a new one, the time is now. Carefully choose the area that not only meets your needs but as a savvy investor, choose the right luxury Realtor in Raleigh. I do have one more insight for you. If you want to optimize your sale price, sell your house quickly and move to your new dream home, contact me!
We will be all right in the Triangle, but we need to be ready for the boom that this popular area may need to stand, Amazon or not.