Here’s a change from earlier this summer: You might actually have to wait for a table if you go out to eat in Charlotte. The number of people dining out has risen sharply the past few weeks.
That’s according to an analysis by the Charlotte Ledger Business Newsletter. The Ledger's Tony Mecia joins us with more on that and other local business news.
Marshall Terry: Tony, I do want to get into what's driving this increase in just a moment. First, just how much has dining out in Charlotte increased in the past few weeks?
Tony Mecia: Marshall, Open Table, which is the reservation system that a lot of restaurants use — they also use it for seating, not just reservation — they have a bunch of data we can look at and see how much people are actually being seated at restaurants. The number of people being seated at restaurants in Charlotte has increased in the last few weeks.
Now it's still down pretty significantly. It's down right now about 45% from where it was a year ago. However, that's an improvement from being down 60% as it was in most of July and obviously, you know, 100% when things were closed in March and April. So, it is ticking upward, if you look at the graph, and so I think that's encouraging on the one hand. On the other hand, it's still down pretty significantly. So, you know, there are still a lot of problems in the restaurant industry.
Terry: So, what's going on? Why are more people dining out now, all of a sudden?
Mecia: Well, I think it's a number of factors. I think as this pandemic drags on, I think people are maybe sort of getting tired of the spaghetti and meatballs at home. The weather's been pretty nice lately. The kids are back in school. And so, you know, if you're at home all day with kids trying to work, maybe the last thing you want to do is cook a meal.
I think all those factors are kind of contributing. When you look at the numbers, Charlotte actually is one of the top cities in the country that has seen improvement. There are a lot of other cities that are down 70-80% in some of these bigger cities. You know, they're maybe tourism dependent. San Francisco, New York, Seattle — those are down a whole lot more than Charlotte is.
Terry: Well, as you said, while it is an improvement, it's still pretty far down from where they were a year ago. So where do restaurants go from here?
Mecia: Well, remember, Marshall, that restaurants are still capped, supposedly at 50% of their capacity. So even on their best nights, they can still really only accommodate half of the people that they ordinarily would. And so until those numbers go up, until those capacity restrictions are lifted or increased, which is supposed to happen to Phase 3, which might be implemented as soon as Sept. 11, you know, I think then we might be able to see some of an increase for restaurants. But for right now, it seems like it's hard to imagine it going a whole lot higher than where it is just because they're bumping up against these capacity limits.
Terry: Tony, the Ledger is reporting homebuilders in Charlotte and nationwide are facing a lumber shortage because of the pandemic. What is that doing to home prices?
Mecia: Well, it's increasing home prices by a lot. Marshall, the National Association of Home Builders estimated that the average cost of a single-family home has increased by more than $14,000 since the middle of April.
If you look at the price of lumber, it's more than doubled since the middle of April. A number of reasons for that: Production was down, some problems with lumber mills and processing in terms of factories and how do you get all the people in the factories with this COVID going around? You know, the demand has not tapered off as much as people had thought. There's still a tremendous desire to build homes. That's really kind of held up last few months. There's tariffs from Canada. There's insects that are destroying some of the wood. There's a number of factors, but those prices have really gone up on the wood, so that's going to get passed along to home buyers.
And we talked to one wood supplier in Charlotte, Queen City Lumber, who said that as far as the supplies and the availability of lumber that's needed for houses, that the situation we're in right now is worse than it was during Hurricane Hugo in 1989.
Mecia: You report that COVID is disrupting an $18 million real estate deal in Charlotte's Dilworth area. What was the plan there?
Mecia: There was a spot on Morehead Street at Euclid, about two or three acres, and it was going to be sold and developed into a mixed use project. However, the buyer out of New York was unable to get financing because the deal was supposed to close by May 1; said they couldn't line up they financing deal, fell through. Now it's in court. The two sides are kind of suing each other. It's sort of an example of how some of these land deals can kind of change in this recessionary period.
Terry: Are we likely to see more projects like this get put on hold or canceled because of the pandemic?
Mecia: Well, it's hard to say. So far, I think we haven't seen a whole lot of these. We saw that in the last recession. We saw financing dry up. You know, you had projects that were under construction that just stopped. We haven't had anything of that magnitude. There was the news that came out this week, the Beacon Properties, which was developing an office tower and some retail near the Scaleybark light rail line, now is apparently selling that. It's on the market. That land is on the market. It's a development called LoSo Station.
There's still some apartments being built there. Those are continuing, but Beacon sounds like it's getting out of the office and retail part of it. So, it's just another example of how plans can kind of change as some of these markets change. It's kind of a tough time. There are questions about what's the future of office: You know, are we going to need as much office space as we did in the past? And of course, retail, you don't have as many people going out to shop, so there are questions about that, too. So, some of these plans are changing.
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