Life in Charlotte, N.C., has changed radically in the last generation. What was once a small southern town is flooding its boundaries, and areas that were outskirts and farmlands are now near the center of town, residents say.
"We've come from sleepy city to one of the most rapidly growing metropolitan areas in the South," said Dan Bechter, an economist based in the Charlotte branch of the Federal Reserve Bank of Richmond. Last year, Charlotte received an official stamp of nationwide recognition as a major city when its Carolina Panthers began play in the National Football League.
A heavy influx of white-collar professionals from the Northeast and Midwest has been driving the growth. Many are drawn by job opportunities at the growing operations of both NationsBank Corp. and First Union Corp., both headquartered in Charlotte. New technology-related companies in the area and foreign investments are also contributing to the economic growth, Mr. Bechter said.
Why Charlotte? "We have the ideal climate," said Linda Theisen-Barnhill, executive vice president of Marsh Associates Inc., a local lender. "Not too cold in the winter, not too warm in the summer, close to the mountains, and close to the ocean."
The migration to the city with ideal weather has meant a heavy demand for housing since 1990.
Construction has been booming in the area, but it hasn't been able to keep pace: Consequently, resale home values shot up 30% in the past six years, according to a recent TRW Redi Property Data study.
"Builders just hadn't anticipated this kind of growth," said Ms. Theisen-Barnhill.
Average mortgage size has increased substantially - from $50,000 to $90,000 in the past few years at Marsh Associates, for example - because of skyrocketing resale values, and because newcomers are looking for showpiece homes with upscale amenities.
"Golf course communities," developed on the outskirts of Charlotte, cater to affluent 30- and 40-somethings with children. Such developments often feature country clubs, and homes of 2,000 to 5,000 square feet costing from $180,000 to $500,000. As the developments become more popular, the city's boundaries are growing.
"One of the things that explains the expansion of Charlotte is that the people moving in don't mind buying a home 30 or 40 minutes away from where they work," said Kevin Hanson, loan originator for First Union. "They're used to traveling an hour to work: getting on a bus in New Jersey, and then taking a subway in Manhattan."
Heavy housing demand doesn't mean that it's a picnic for established small local mortgage bankers.
The various mortgage and banking subsidiaries of NationsBank and First Union dominate the market, and many national players have gotten into the game in the past few years, bringing with them the advantages of size.
"They can outprice us," said Ms. Theisen-Barnhill, whose Marsh Associates wrote $24 million in mortgage loans in 1995. In many transactions, Marsh is now acting as a mortgage broker, rather than a banker, and passing loans to the larger players.
The population moving in is heavily rate and point conscious, Ms. Theisen-Barnhill said, perhaps in part because many of them work in banking. Most lenders have reduced origination fees substantially -to as low as 0.5%.
As home values climb and upscale developments grow, some first time homebuyers are finding themselves priced out of the market. At the lowest end of the market, textile mills in outlying towns have been refurbishing housing that was formerly rented to employees, and selling it off.
But, Mr. Henson said, affordable housing is still available within the city limits. "There are always people upgrading, and leaving behind greater numbers of starter homes."
