Few sectors of the local real estate market have been as slow to recover as the market for high-end, custom-built homes.
When the housing market collapsed, many developers suddenly found themselves with large inventories of such homes but no interested buyers.
Today the market for homes priced at $600,000 and above is far from recovered, but there are signs that demand is returning.
Earlier this month a group led by Raleigh developer Andrew Sandman paid just over $4 million for two parcels of land that are to become The Reserve at Falls Lake, a 72-lot residential community that will feature homes starting in the low $700,000s.
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The sale included roughly 81 acres of what will eventually be a 118-acre community at the edge of Falls Lake.
“It’s just gorgeous, absolutely stunning,” Sandman said of the property.
He’s confident in the project both because of its unique location and because the inventory of new construction in this price point is low.
“It is just our belief that homes starting in the $700,000s in that location, on those lots, we feel very comfortable with it,” he said.
While certain pockets of the Triangle still have extraordinarily high inventory levels at the high-end of the market, the data aren’t nearly as frightening as they were a few years ago.
In North Raleigh/Northern Wake County, there is now a six-month supply of homes on the market priced between $600,000 and $800,000, Triangle Multiple Listing Services data show. Above $800,000, the supply of homes jumps to 11 months.
In Cary/Morrisville/Apex there is a six-month supply of homes priced between $600,000 and $800,000, and just a five-month supply above $800,000.
Contrast that with South Cary, Western Wake and Holly Springs, where there remains a 20-month supply of homes priced above $800,000.
Sandman’s group is no stranger to developing communities in this price range. The group’s other projects include The Hamptons at Umstead, a 215-lot community featuring homes starting in the $600,000s, and The Registry at Bailey Falls in Raleigh.
Sandman said he’s in the process of putting together a team of custom builders for the Falls Lake neighborhood. Some of the homes will be built on spec, he said.
The first phase of the community is to include 26 lots, with homes expected to be on the ground by this summer.