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Allen Tate CEO predicts more price gains for existing homes

Allen Tate CEO Pat Riley

Allen Tate CEO Pat Riley

Rising home prices are a good thing, soaring prices not so much. The Charlotte region has been known for its steadier history around price appreciation—and declines. Steady here is a good thing.

New home construction means year over year price gains of around 4 percent for existing homes are the norm in Charlotte, while Chicago and New York have seen declines of 2 percent and 3 percent, respectively. On the flip side are markets like Portland, Seattle and Denver, where price gains are in the double digits this year over last year, according to the S&P/Case-Shiller national home price index

So, what’s happening here in Lake Norman? Cornelius Today editor Dave Yochum interviewed Pat Riley, president and CEO of the Allen Tate Cos.

What’s your forecast for home price increases this year, next year and 2018 in Charlotte?

RILEY: I predict another above-average year again this year and next (2017) because of shortages of inventory. I don’t see shortages going away anytime soon because builders have a long way to go to get back up to full speed. Also, boomers are dragging their feet when it comes to downsizing; rather, they are remodeling and staying put. Shortages cause above-average appreciation because of supply and demand.

Because of net in-migration, will the Charlotte region be ‘hot’ for the foreseeable future?

RILEY: I see the Charlotte region being a beacon for in-migration for years and years to come IF we continue to address the issues of transportation and quality of life. Future generations will judge us on living up to the “Connect Our Future” regional planning.

Does net in-migration mean Charlotte regional prices will climb about the same as the Case-Shiller average, or a little bit ahead?

RILEY: Once we get inventory realigned, annual price apprecation will fall back into the 3-4 percent range.

For Lake Norman, how does congestion on I-77 affect the broad middle market? How does it affect the luxury market?

RILEY: I-77 is being addressed and light rail will follow at some point. Lake Norman has always been attractive for those who do not need to work downtown and can work at home or are retired and need access to a major airport.

For 1980s houses or those houses without the coveted open floor plan, short of a strenuous remodel, how can you make your house more sellable?

RILEY: Half-walls and opening the inside to the outdoors—leaving in a lot of light—is key. Formal living rooms need to made part of another part of the home, such as the master bedroom, or the dining room to create a great room.

Shifting to millennials, will they want big homes some day?

RILEY: Today there is a large demand for smaller homes with better quality features and more details, but there will always be a demand for larger homes from those who want the grandeur and space—because they can.

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