Residential teardowns stage comeback in Charlotte

deroberts@charlotteobserver.comJuly 5, 2014 

It was a common sight in Charlotte’s older neighborhoods during the housing boom: homes being torn down to build something new – and bigger.

Now those teardowns, which all but stopped during the downturn, are on the rise again.

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From SouthPark to Myers Park, Dilworth to Davidson, homes are being bulldozed and replaced with larger, much more expensive ones in the latest sign of Charlotte’s housing rebound.

“I haven’t seen this level of demolition and rebuilding since I’ve been in the homebuilding business in Charlotte since 1978,” said Jim Burbank, partner with Charlotte-based homebuilder Saussy Burbank. “It’s unusual for us to get one finished without selling” it first.

Sometimes it’s the owners who tear down their homes to build a replacement. Other times, builders buy homes to demolish them and build new ones without a buyer lined up.

Helping drive the trend are rising home values that make builders more confident they’ll be able to profit by replacing older homes considered outdated. Builders say the new homes are meeting growing demand in close-in neighborhoods such as Dilworth and Plaza Midwood – where vacant lots are scarce.

“This is the solution that the building community is finding to the problem of not enough lots on the ground: Let’s go redevelop. Let’s go infill,” said Alan Banks, co-owner of Charlotte-based Evans Coghill Homes.

The teardowns bring fresh concerns about the new, larger homes harming the character of older neighborhoods. The worries are reminiscent of those voiced about so-called McMansions during the boom times.

In Charlotte and elsewhere, new homes are getting bigger. The average size of new, single-family homes had fallen to 2,392 square feet in 2010, according to the U.S. Census Bureau. Last year, the figure climbed to 2,598 square feet – the highest level on records going back to 1973.

Some Charlotte builders are demolishing one home on a large lot or multiple lots and building two or more larger homes in its place. Think more home, less yard. Builders point out that many of the homes they have torn down are decades-old ranch-style homes with restrictive floor plans that have fallen from favor.

Much of the demand for those larger homes stems from “move-up buyers” – who are finally putting their homes on the market as rising home prices pump equity back into their properties.

Burbank plans to demolish about 10 homes this year to make way for new homes priced at $600,000 to $1.5 million each. He expects move-up buyers to purchase most of those.

Some owners are tearing down their own homes and building a bigger one on the same lot, said Joe Rempson, president of the Charlotte Regional Realtor Association. Rising home prices make them confident they’ll recoup their investment, he said.

Charlotte-area home prices rose 4.4 percent in April from a year ago, the latest figures available from the Standard & Poor’s/Case-Shiller index. That’s the 26th month in a row the region has posted year-over-year gains in prices.

Demolition business booming

Jason Black tears down houses. The vice president of Charlotte-based demolition company W.C. Black and Sons had to let three employees go when teardown activity slumped during the housing downturn. Now business is surging again. He’s added three employees this year.

About two months ago, he demolished a roughly 2,000-square-foot home in Dilworth. “It was a brick ranch,” he said. “They’ll probably put a 4,000- or 5,000-square-foot house back in its place.”

It’s difficult to measure exactly how many homes are being built on teardown sites. But Mecklenburg County demolition permits for one- and two-family homes are up so far this year compared with a year ago.

From Jan. 1 to the end of June, 289 demolition permits were issued, up from 267 in the same time last year. Those permits cover a range of projects, from carport demolitions to complete razings of homes.

Black said he’s averaging three to four demolitions a month to clear the way for new homes in popular neighborhoods. He said that’s up from one demolition a month, if he was lucky, during the housing downturn.

“Right now things seem to be booming,” he said.

Few vacant lots

Drive through older Charlotte neighborhoods, and you won’t see many vacant lots.

Bill Miley, Charlotte market director for housing-data company Metrostudy, said there are virtually no vacant lots readied for home construction in neighborhoods near uptown, such as Dilworth and Myers Park.

In Myers Park, Sadler Barnhardt, president of the neighborhood’s homeowners association, said three houses are under construction within 200 yards of his home. The three will replace older homes that were torn down this year, he said.

Barnhardt said he’s aware of at least 10 homes demolished this year in his neighborhood to make way for new ones. Most of them were about 60 years old and less than roughly 2,000 square feet each, he said.

Builders say the new homes are appealing to buyers who want to live in an older neighborhood but not in a house that is outdated and lacks features that many buyers desire today, such as more open floor plans and spacious closets.

Builders also point out that some of the older homes they are demolishing are in need of significant repairs.

“We are not tearing down the cute house on the street,” Banks, of Evans Coghill, said. “It’s often a rental that’s being torn down or it’s in some state of disrepair.”

Wanted: ‘An urban setting’

Real estate industry officials say the popularity of living in established Charlotte neighborhoods is part of a nationwide trend of people wanting homes close to downtown areas – to avoid long commutes and have a more urban lifestyle.

Cindy Pearson and her husband, Scott, this year bought a home in Plaza Midwood partially so their children could attend Shamrock Gardens Elementary School. The family had been renting in south Charlotte.

“We wanted to live back in an urban setting, where homes are close together,” Pearson said.

Their new, two-story home, which is about 3,000 square feet, was built where a one-story, roughly 1,800-square-foot home was demolished last year by Evans Coghill, which was building it without a buyer lined up when the Pearsons learned about it.

Evans Coghill has demolished four homes this year to build five in Plaza Midwood and Cotswold. The new homes will range from the high $500,000 range to around $800,000 apiece. Last year, the homebuilder tore down three homes to build four in Plaza Midwood.

Builders say the teardown trend is here to stay.

“Definitely,” said Danny Kelly, co-owner of homebuilder Kelly McArdle Construction. He said his company will demolish about four homes this year to make way for six that will sell for roughly $850,000 to about $2 million apiece.

“In Charlotte, especially, it’s getting more and more expensive to develop land and harder and harder to develop land,” he said.

“That’s going to drive the teardown market.”

Roberts: 704-358-5248; Twitter: @DeonERoberts

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