Housing market rebound resurrects tear-down trend
Posted September 13, 2013
Raleigh, N.C. — Old homes inside the Interstate 440 Beltline in Raleigh are once again giving way to the wrecking ball and new construction.
So-called "tear-downs" were a hot trend about several years ago, with nearly 600 Raleigh homes razed and replaced between 2002 and 2007. Then, the housing market collapsed amid the sub-prime mortgage crisis.
With the economy recovering and interest rates still low, tear-downs have returned, especially inside the Beltline, where available land is limited.
"There's been a lull since 2006. They pretty much dwindled to very few," home builder Richard Tilley said Friday. "Now, you see them pop back up. There's opportunities inside the Beltline."
On Rock Creek Drive, off Six Forks Road, for example, at least a half-dozen homes have been demolished to make way for new ones.
"People want to be in close. They want to be in an established neighborhood," said Tilley, who has about 50 tear-downs inside the Beltline over the years.
Builders say renovating older homes is often more expensive than starting from scratch. Also, people are more focused now on smaller houses with quality accents than the gargantuan "McMansions" that were popular several years ago.
Raleigh building inspector Dave Huffstetler said he and other inspectors have had their hands full in the last year making sure the new homes are up to code.
"We really haven’t seen anything like this since '09 when the bubble burst, but this is a very good sign things are coming back," Huffstetler said. "Permits are up every month since last year, and we think we're going to get even busier."
Developer George Andrews said he doesn't think the boom in tear-downs will last, noting it's being fueled by low interest rates.
"Financing is still relatively inexpensive as historic norms go," Andrews said. "That’s helped facilitate our market right now to get it while you can."
"The economy is adjusting to a new normal, I think," Tilley said. "This is good, but I don’t think it’ll ever be what it was before."