But buying a little mill house on Weaver Street for your new restaurant or boutique may be the costliest property around.

“People have paid some incredible prices,” said Mark Chilton, Carrboro mayor and real estate agent. “I think it’s a really charming street, and it’s a place people really want to be.”

For example, 205 W. Weaver St. sold in January for $419,000, a price of about $349 per square foot for the restored mill house. In December 2006, 401 W. Weaver Street sold for $550,000 for a 1,270-square-foot building.

Chilton noted that a block away, commercial real estate is much more consistent with the rest of the area, at about $180 per square foot.

“Carrboro is pretty popular, and there’s not much property available,” said commercial real estate broker Johnny Morris. “There’s always someone that wants to invest there.”

The properties available along Weaver Street are somewhat unique to the area.

“You don’t have 50 mill houses zoned commercial to compare it to,” Morris said. “It kind of goes to the highest bidder.”

Morris said small commercial properties like the converted mill houses on Weaver Street don’t necessarily represent the overall market.

“I look at those as something that skews the market,” he said.

Chilton worries about the high price of commercial property in general.

“I think it is a problem,” Chilton said. “We need more space zoned for commercial-type uses.”

Chilton said his town is trying to create some commercially zoned land in northern Carrboro to help make commercial property more affordable.

Morris said the commercial market in Chapel Hill and Carrboro has undergone a fundamental change in recent years because land has become scarce and the towns are encouraging denser developments.

“Suddenly, they want density, which is good for the area,” he said.

There are a lot of situations where people redevelop their property, rather than continuing to use the building on the site. Greenbridge is an example of this, Morris said. Greenbridge is a $50 million project on West Rosemary Street. It will include two towers, one reaching seven stories and the other 10, and will have 99 residences. The project replaces properties that had been the Queen of Sheba Ethiopian restaurant and the former Mason Motel.

“With the whole market, we’re in kind of this time of redevelopment,” Morris said. The most important question now is ‘What’s the land use, what can you do with the underlying land,’” he said.

In the past, it was a different question.

“If that property was going to be sold, it was what’s sitting on the dirt,” he said. “But if you could take that property and go up five stories, that number becomes important.”

Morris said now the improvements to the property, what’s already built there, become a liability that has to be torn down.

In Carrboro, 300 E. Main St. is an example of a denser project replacing existing buildings. The strip mall where Cat’s Cradle, VisArt and The ArtsCenter are located is now a 55,000-square-foot shopping center. But a redevelopment plan for the site was approved by the Board of Aldermen in June.

The plans call for a five-story, 350,000-square-foot mix of office, residential and retail space to be built by developer Main Street Properties.

Scarcity is driving the charge to build up.

“We’re out of land — there’s not much that’s undeveloped,” Morris said.

Such dramatic changes in land use make it more difficult to assign a value to a property.

“It’s a more sophisticated market than it’s ever been,” Morris said. “There are some big numbers out there. It’s a matter of what you can do with the land.

“It’s easier to understand if you’re buying property based on income stream,” or the amount you can lease the building and property out for. “That’s true investment real estate.”

Morris said the commercial market in this area is still very strong despite the slowdown in the residential housing market.

“There’s a lot going on,” Morris said. “Developers are looking for land and looking for opportunities.”