By Margot C. Lester
â€œBe glad youâ€™re here, because these numbers are a lot better than the Triangle and the rest of the country.â€
That quote, from local realtor Mark Zimmerman, pretty much sums up the data points presented at the Chapel Hill-Carrboro Chamber of Commerceâ€™s Orange County Development briefing, held Tuesday at the Friday Center.
Zimmerman, owner/agent of RE/MAX Winning Edge, said the county is outperforming the region, with an August year-to-date decrease in sales of only 2.3 percent, versus a 10.1 percent decline for the Triangle as a whole. Days on market increased slightly in the county and sales were a mixed bag (see chart).
High unemployment, continued financial insecurity and limited lending are behind the declines. Ironically, however, sales of the most expensive homes are picking up. From August 2010 to August 2011, 36 homes listed at more than $800,000 were sold. Thatâ€™s an increase of 38.5 percent from a year ago.
â€œThereâ€™s one good reason for that,â€ Zimmerman said. â€œJumbo loans are now available at better rates.â€
Consider that a bright spot.
Itâ€™s another story for condos though. August sales in Orange County were down 39.3 percent from a year ago, and units took an average of 136 days to sell. Townhouses are only slightly better off, with sales down only 14.4 percent and 122 average days on the market. Part of the problem is financing, which is hard to come by, meaning more buyers have to pay in cash. And there are a lot of higher-priced units on the market.
â€œExpensive plus cash is not easy,â€ Zimmerman said.
â€œThe condo situation will come back when the credit situation changes and people start loaning again. But that could be three to four years out. The economists have stopped predicting when things will get better.â€
Chapel Hill Economic Development Director Dwight Bassett reported that retail and warehouse space is in the highest demand across the county. Only 8 percent of the nearly 1.9 million square feet of retail in the county is available and none of the 489,700-square-foot warehouse inventory is vacant.
â€œIt appears retail vacancy is beginning to decline, so there is fairly limited availability in Chapel Hill and Carrboro,â€ Bassett said. â€œThereâ€™s not a lot of opportunity for future growth in existing inventory. Warehouse is in the highest demand because thereâ€™s very little in Orange County â€“ and we donâ€™t build a lot of it because itâ€™s speculative.â€
The office market, on the other hand, has lots of available space. Thereâ€™s 1.05 million square feet of Class A (top of the line) office space in the county, and almost a quarter of it (23 percent) is unleased. Even the more affordable Class B inventory of 459,019 square feet is 16 percent vacant.
Mixed (use) messages
Despite the data, several proposed developments tentatively include offices in the mix.
â€œWhat is currently being proposed is soft, meaning [developers] are unclear as to where the demand will be and if they will build it,â€ Bassett explained. â€œWe do not have a significant amount of office currently in the works, primarily because we need to come out of this economic downturn and absorb some of the existing space.â€
The crowd of more than 130 people also saw presentations from the developers of The Edge, Obey Creek, The Lloyd Property, Carolina North and 123 West Franklin Street, and UNC Health Care, OWASA, AT&T and Time Warner Cable Business Class. Aaron Nelson, the chamberâ€™s executive director, closed the event with an overview of the quarter-cent sales tax initiative, which, if approved by voters in November, would benefit education and economic development.