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Charlotte: Financial Hub, Millennial Magnet

From the outside, Charlotte, N.C., might look like a “typical” American city. It tapers out from a central district into neighborhoods, suburbs, exurbs, and countryside. The racial and economic mixes are pretty consistent with the country at large.

But there’s something unique about this city. Once a tiny village with just a half dozen houses, it became the crossroads of the slow-moving traffic across the Piedmont plain and eventually a major industrial city. But the pace was always consistent with the rest of the bucolic South.

And yet, unlike most the rest of Appalachia, it never got left behind for long. While their cousins up in the hills might blame their problems on “elites” along the coasts, Charlotteans went about the hard slog of becoming elite while remaining true to who they are.

When you peel away the layers, then, it becomes clear that Charlotte is not what America is today. If we’re lucky, though, Charlotte is what America someday will be.

And a new generation is betting their future that Charlotte is where the next economic boom will find a home. There are reasons for that.

Charlotte has a lot to build on

Charlotte’s old settlers are — and this isn’t a pejorative — rednecks. It’s what Appalachian-Americans, whose Scots-Irish ancestors arrived in the 1600s and 1700s, often call themselves. At the time their families came over, many Scottish Protestants wore red collars to signify their religious allegiance. When they arrived in America and went about the hard, outdoorsy work of building new communities, the image of a sunburned neck was conflated with the symbol of their choice of church and the American redneck tradition began. The group has had its struggles with poverty, ignorance, and intolerance, but equating all of today’s rednecks with these stereotypes is misguided and unfair.

Charlotte has been a transportation hub almost since its establishment in the mid-1700s. During the Civil War, it was one of the Confederacy’s principal railheads. In the 1960s, it became the birthplace of Henson Airlines which, after a few name changes and rebrandings and mergers and acquisitions, became a part of American Airlines. Charlotte is the carrier’s major southeast U.S. hub to this day.

But what really gave Charlotte an economic head start was an accident of geology. In 1799 — 50 years before the California gold rush — the area around Charlotte was the site of the first major gold find in the United States. Mining companies were formed, business types moved in and the new U.S. Mint opened up a branch office there.

Eventually, the Civil War disrupted the mining and minting businesses and, by the turn of the 20th century, the vein had been nearly tapped out. Still, there was enough of a financial community established there that Charlotte maintained its status as a banking center.  Today, Charlotte hosts the world headquarters of Bank of America as well as the East Coast headquarters of California-based Wells Fargo. As such, it is the second-most important banking hub in the United States, surpassed only by New York.

Finance isn’t the only industry to make its home in Charlotte, though. Hardware and building supplies retailer Lowe’s is based there, as are electronics manufacturer Honeywell, steelmaker Nucor, Duke Energy, and many other sizable companies.

Work brings workers, and greater Charlotte’s population keeps growing. Currently, around 860,000 live inside the city limits, and almost one out of every five moved there since 2010. Since 1850, not a decade has gone by without the U.S. Census reporting double-digit growth. If you include the surrounding areas, Mecklenberg County, which contains Charlotte, has well over 1 million residents and the combined statistical area has more than 2 million.

So who are these people who keep moving into town? Where do they come from, and what are their prospects in this ever-expanding metropolis?

Turn of the Millennials

To start with, they’re young.

According to City-Data.com, the average North Carolinian in 38.7 years old but the average Charlottean just turned 34. She — the city is 52% female — manages a household income of $61,017, compared to the statewide median of $50,584. She makes her money in management or sales, and very likely in the finance or insurance industries. She has at least an associate’s degree and probably a bachelor’s. If she expresses a religious preference, it’s evangelical Protestant, but she’s twice as likely to express no persuasion at all. Ethnically, it’s difficult to generalize about a typical Charlottean. White people still comprise the plurality of the population, but black people will soon exceed their numbers if current trends hold. Her marital status is also anyone’s guess. She is slightly more likely to be single, separated, widowed or divorced than she is to be married, so just go up and ask her.

And there is little doubt that, if she moved to Charlotte from out of town, she falls into that generation known to marketers as Millennials. There’s no firm definition of what a Millennial — or “Gen Y’er” or “Echo Boomer” — is, but those born in the years from 1981 to 1996 are generally considered as such. Some of us just refer to them as “grown men and women who’ve been out of school for years and are creeping up on middle age.” Sorry to be so cynical, but the data suggest that Millennials are both more narcissistic and less narcissistic than previous generations and that they are simultaneously less politically engaged and more likely to vote. So, let’s just call them what they are: individuals. Adults. Workers. Earners. People minding their own business, which involves building a career and a family in a town of other people building careers and families.

But there do seem to be a lot of them and, according to a SmartAsset study, many are finding new homes in Charlotte. In one recent year, the city saw a net gain of 11,000 Millennials. That’s more than relocated to any other second-tier city including Seattle, Austin or any other youth-vibe town you can name. According to mortgage processing service Ellie Mae, they account for 38% of new mortgages in Charlotte. That’s not all that big a number, which suggests that maybe they’re choosing to rent. Maybe they owe so much on student loans they have to rent.

So where are they choosing to live?


Pittsburgh-based research firm Niche conducted a study of the top neighborhoods for young professionals in the Charlotte area. They were judged, according to the Charlotte Business Journal, on “access to coffee shops, bars and restaurants, diversity, crime and safety, walkability and cost-of-living grades”.

Top honors went to the Fourth Ward, toward the north end of the urban core, which is a trendy neighborhood known for its pulsating nightlife and mediocre schools. Two out of three residents are in rental units, paying a median $1,454/month in rent. That said, there are actual houses to buy in the Fourth Ward, unlike the rest of the city center. It’s followed by First Ward, a mixed-income zone with rents $300 a month less but, somehow, with better schools.

Those wards are often considered part of the Uptown central business district. The Second Ward is the historic black neighborhood, portions of which have been revitalized with the construction of city and county offices. Its old name was Brooklyn but, for reasons best not to contemplate, Niche just refers to this area as “Uptown,” to distinguish it from the other wards. It’s still on the best-for-Millennials list, though. So is the Third Ward, which is probably what people think about when they say “Uptown”. It’s the core of the Charlotte skyline, where the major hotels and restaurant rows are, as well as the convention center, and Bank of America Stadium is where the Carolina Panthers play.

The rest of the list winds around the outside of the John Belk Freeway. Such communities as Wilmore to the west, Dilworth to the south, Optimist Park to the north and Cherry to the east are also competing for early- to mid-career professionals. Farther east along the Independence Freeway Elizabeth beckons, and Sedgefield waits to be discovered off Interstate 77 to the south.

That’s not all

One need not be a Millennial, though, to have a reason to move to greater Charlotte. But whatever the new arrival’s demography, renting is almost certainly their first step, and quite possibly their next.

“The metro’s addition of 52,000 new residents this year will result in household growth that doubles the national pace,” according to a recent Marcus & Millichap study. “Robust demand will also come from fewer tenants being able to transition to homeownership due to a lack of entry-level homes for sale amid rising interest rates and values. Even as the need for apartments expands, deliveries will ease from last year’s pace, tightening vacancy to its lowest point of this cycle, supporting rent growth.”

What’s bringing them is jobs. “Over the past year, employers in Charlotte added 29,200 positions across the metro,” according to Institutional Property Advisors. “The unemployment rate has continued to compress, falling into the low 3-percent range.” That’s not just below the national average, it’s below what’s healthy. That’s a labor shortage, so people who are looking for work and don’t want to head up north are going to seriously consider the Carolina climate.

The market for rentals in Charlotte is tight now and keeps getting tighter.

Charlotte at a glance

  • Construction (projected, 2019): 7,700 units, down from 8,500 units last year but consistent with the five-year trend
  • Vacancy rate (projected, year-end 2019): 4.2%, down 50 bps year-over-year
  • Annual rent (projected, 2019): $1,166, up 4.7% year-over-year, following up 2018’s 6.9% surge

Sources: Marcus & Millichap

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