This week, Royal Oaks Building Group paid $5.9 million for nearly 30 acres in North Raleigh. The site is one of the last large infill sites in that part of the city, a fact reflected in the price.
Its all about the location, which is why we reached for it, said Rich Van Tassel, president of Raleigh-based Royal Oaks, which had the property under contract for about a year. Its expensive dirt.
Indeed. Royal Oaks is paying nearly $72,000 a lot for the property northeast of Lake Lynn, at the intersection of Ray and Howard roads. It was owned by the family of Willie Chavis, who died in 2011. Royal Oaks plans to develop the site into an 82-lot subdivision called Stonehenge Manor.
The purchase is the latest example of developers scooping up infill sites as they scour the Triangle for a shrinking number of prime locations.
Van Tassel said residents in that part of North Raleigh have few options when looking for new single-family homes if theyre not willing to go the tear-down route.
When we did a market analysis on that area, theres nothing there, he said.
Most of the remaining undeveloped sites are being turned into higher-density developments, such as apartments or town houses.
We think our buyer lives in North Raleigh right now; maybe they live in a $350,000 house and theyd like a bigger and more modern one, Van Tassel said.
Homes in Stonehenge Manor will average about $550,000, Van Tassel said, with the possibility that some lots could have homes priced as high as $700,000. The neighborhood will connect to another recently completed subdivision, Stonehenge Place, and Van Tassel said the two communities will be similar in style and architecture.
Although Stonehenge Manor will offer some of the largest and most expensive homes in the area, Royal Oaks is wise to not reach too high in terms of its asking prices, said Stacey Anfindsen, a Cary appraiser who analyzes Multiple Listing Services data for area real estate agents.
I think as long as they keep it under $700,000, but preferably between $500,000 and $600,000, they wont have any problem, he said. When you get to $800,000, it gets kind of messy.
The upper end of the Triangle housing market continues to struggle, even as lower segments of the market have experienced double-digit sales increases and modest price appreciation.
Anfindsen noted that the older neighborhoods near Stonehenge Manor targeted buyers in the $150,000 to $300,000 range, with the high end neighborhoods topping out at $400,000.
It was never really somebody with a half million dollars to spend on a house, he said of the typical buyer. They did that out at Falls Lake. They didnt do that in that section of North Raleigh.
Van Tassel is well aware of the increased expectations, and risks, that result as you go up in price points. The company, which has focused mainly on the $350,000 to $450,000 market, made its investment in Stonehenge Manor after finding success selling $575,000 homes in the Bella Casa neighborhood in Apex.
You start getting up to $500,000, $600,000, theres a different expectation for a buyer. I dont ever see us being up in the $850,000s but well see where this goes, Van Tassel said. This is going to be more customer-service driven than anything weve done.
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