210 Trade | EpiCentre

[MZT]

400K? 500K?

We must be getting desensitized to it, because the numbers are becoming so commonplace. But, it really IS a lot of money!

How the heck can a typical uptown office worker pay for this??

The traditional measure of affordability is 32% of gross income. Figure 55K for the usual uptown geek financial job, that's $1466 a month for lodging.

Financing 90% of 400K at 6.5% interest for FORTY years is $2108 a month, then add HOA and property tax on it... PMI too? Yikes.

I don't see how investors could be buying these units either. What would they rent for? $1500, maybe?? (32% of income again...) How does this make financial sense?

Despite my perplexedness, I'm actually pretty enthusiastic to see 210 Trade sell out - I want to see development by the rail line take off.

But it sure sounds like the average person will have to wait for the resales, if they want to get into one of these units.

Edited June 21, 2006 by MZT

[AuLukey]

But it sure sounds like the average person will have to wait for the resales, if they want to get into one of these units.

Yup, just in time for my planned move uptown in 2008-ish.

[dubone]

People don't have these 400k - 500k homes as their starter home. It is typically their second or third home, meaning they have established some equity through appreciation, and principle payments.

Thus, I would be surprised to see only 90% down on these units, as 80% is standard (especially considering you're throwing money away on PMI). 6.5% with 20% down on a 400k unit is $2020 in monthly payments for P&I.

My guess is also that most of these 400-500k units are for DINKs, rather than singles. Singles would be more apt to buy in the 200-300k range for the one bedrooms and the studios. So if you figure that DINKs might make 45k and 55k, for a total of 100k annually, 8.3k monthly, 5.8k monthly after taxes, and 2k monthly budget for for lodging.

It might also be worthwhile for some to bump up beyond the 1/3 level for lodging, as some might be able to walk to work and reduce auto expenses. Others might be counting a higher expectation for appreciation to warrant some other sacrifices in their budget, or to replace other potential savings and/or investments.

All in all, though, average people can afford these units if they want to, which is why they are selling. Although I bet most of these buyers make more than the example given.

[ScottCLT]

I don't see how investors could be buying these units either. What would they rent for? $1500, maybe?? (32% of income again...) How does this make financial sense?

I live at Fifth @ Poplar and I was by the mailboxes the other day and noticed a 2BR condo there for rent on the bulletin board for $3400/month. I had to do a double-take, but that's what I read. I didn't think rentals were that high here, but $1500 for 210 would be way cheap in comparison to other downtown properties...I just looked at the prices on Camden's site for the Cotton Mills and it's $1200/month for a 550 sqft apartment.

[Neo]

I just looked at the prices on Camden's site for the Cotton Mills and it's $1200/month for a 550 sqft apartment.

That is quite steep. In 2002 I had a 650 sq. ft. apartment in downtown Chicago that was ~$1300/mo but that also included hot water, cable, security, and Internet access. This was at a good location (Superior/State) and was 1/2 block from the Red Line Subway. I had a view of the lake, Sears Tower, etc. from my windows and balcony. $1200/mo for a 550 sq. ft. apartment at Cotton Mills in Charlotte is just simply too high for this city IMO. Chicago can get away with it but I'm not so sure Charlotte can.

[ElricSeven]

I live at Fifth @ Poplar and I was by the mailboxes the other day and noticed a 2BR condo there for rent on the bulletin board for $3400/month. I had to do a double-take, but that's what I read. I didn't think rentals were that high here, but $1500 for 210 would be way cheap in comparison to other downtown properties...I just looked at the prices on Camden's site for the Cotton Mills and it's $1200/month for a 550 sqft apartment.

Having rented two things in Uptown in the past 6 months, I can say that the max you're going to get is about $1.70 per square foot. Those at FAP would have to have like 50% down on the place just to break even. I feel sorry for anyone who thinks they're going to buy anything Uptown right now and then rent the place out.

My understanding is that the percentage of investors in Uptown condos right now has risen to be larger than those that plan to live in the places. There's going to be some people with loadstones around their necks if the boom doesn't keep going.

[ElricSeven]

400K? 500K?

We must be getting desensitized to it, because the numbers are becoming so commonplace. But, it really IS a lot of money!

How the heck can a typical uptown office worker pay for this??

The traditional measure of affordability is 32% of gross income. Figure 55K for the usual uptown geek financial job, that's $1466 a month for lodging.

Financing 90% of 400K at 6.5% interest for FORTY years is $2108 a month, then add HOA and property tax on it... PMI too? Yikes.

I don't see how investors could be buying these units either. What would they rent for? $1500, maybe?? (32% of income again...) How does this make financial sense?

Despite my perplexedness, I'm actually pretty enthusiastic to see 210 Trade sell out - I want to see development by the rail line take off.

But it sure sounds like the average person will have to wait for the resales, if they want to get into one of these units.

People buying these aren't typical Uptown office workers. There are a lot of people in this town that earn in the low six figures. If there are two of them, $400 to $500K can be quite afordable. As far as PMI, I don't think anyone pays that anymore. They just get a HELOC which is all deductible interest.

[Charlotte_native]

I live at Fifth @ Poplar and I was by the mailboxes the other day and noticed a 2BR condo there for rent on the bulletin board for $3400/month. I had to do a double-take, but that's what I read. I didn't think rentals were that high here, but $1500 for 210 would be way cheap in comparison to other downtown properties...I just looked at the prices on Camden's site for the Cotton Mills and it's $1200/month for a 550 sqft apartment.

Just because someone is asking for that much rent doesn't mean they'll get it. I suspect A LOT of the "investors" who bought uptown condos intending to have them as investments / rentals might not have considered whether someone will pay what they NEED to get monthly in rent. $3400 sounds like it is based off adding the mortgage payment and the HOA dues to the property taxes and coming up with a rental amount. Poor investment strategy. Rental rates (researched BEFORE buying rental units) should be based on market rent and competitors actual rents received. Tenants don't care what your bills are or what you have to cover, they care about how much they can afford, how much competing similar properties are, and where they want to live. If you can go to Cotton Mills and rent for $1200 - $1500 / month why would you pay more than double that for Fifth and Poplar?

I think a lot of investors saw the money made a few years ago when buyers bought condos that were priced low at pre-construction prices and flipped them so they wanted in on the game. Unfortunately prices in center city have risen so much and developers price more in-line with market value -- and assumed market value from pre-construction to completion -- that those days are gone. I've noticed a lot of ads in Creative Loafing, Craigs List, ads in magazines, flyers, etc., for high-end condos for rent all over center city...too many to think that the rental market and pool of tenants can support it. See thread in Coffee House for "Investors today day traders of yesterday...".

When all of these condos downtown are done, and investors who bought to flip put them back on the market, it might be a great time to be a buyer...

[ElricSeven]

When all of these condos downtown are done, and investors who bought to flip put them back on the market, it might be a great time to be a buyer...

I concur, although waiting three years to buy one has risk also since one would have to pay rent that whole time any way. Construction costs do go up and it is conceivable that although these people might not make money, they might not lose any (other than transaction costs) either.

I live in one already, I'm hoping that if and when a glut occurs, I'll still be able to sell mine for a decent profit and trade up to one someone owns and is under huge pressure to unload. 20% sale at 210 Trade! Wahoo!

Alternatively, stuff might not be as marked up right outside the inner loop in the more established neighborhoods.

[Charlotte_native]

I concur, although waiting three years to buy one has risk also since one would have to pay rent that whole time any way. Construction costs do go up and it is conceivable that although these people might not make money, they might not lose any (other than transaction costs) either.

I hope no one loses money. When I say developers are pricing with appreciation already accounted for from pre-construction to completion, consider this: there aren't condos selling for much more than $300/foot today in center city -- yes, there are a couple exceptions, but only a couple.

The new higher-end condos, similar to thoses we already have (Ratcliffe, Chapel Watch, others) are being pre-sold at $400, $500 + per foot -- that is FAR AND ABOVE current market value so it is likely going to be what they ARE worth when they are done. If that is the case, there is no room to flip and make money and possibly not room to flip and cover original closing costs, commissions, payments made until re-sold, etc. This could cause a glut in the market, which will then adjust making it a great buyers market.

Might not happen, but most definitely could.

In the past, before the center city market was proven and developers wanted to make sure they sold out easily and quickly, units were priced very close or even at the market value at the time of announcement -- they had no built-in appreciation for the time it would take to build.

[monsoon]

As far as PMI, I don't think anyone pays that anymore. They just get a HELOC which is all deductible interest.

Of course, if short term interest goes up, which there are all indications this is happening, that advantage is quickly lost in increased interest payments. Financing part of a purchase of something is expensive with a HELOC is a big gamble right now.

[atlrvr]

This was on F&C's website

Groundbreaking Date: Fall 2005

F irst Unit Completion Date: Fall 2007

Construction Completion Date: Fall 2008

I wonder if they plan on completing some units and moving before the entire structure is completed.

[revitalize]

It may be that they can obtain CO's by finished floor, so they can start moving people in before the higher levels are completed.

[CLTfanatic]

I'm pretty sure all closings are around the same time in 2008...

[ElricSeven]

I'm pretty sure all closings are around the same time in 2008...

Really? When I went by the sales office, they said the lower level units would be able to move in in late 2007.

[A2]

Really? When I went by the sales office, they said the lower level units would be able to move in in late 2007.

That is what they said on WSOC last night as well. This thing has more legs than an octopus. Go 210 ! GO GO GO GO GO GO GO GO

A2

[A2]

^^^For what it is worth the Empire state bldg was built in 14 months. Anything is possible!^^

A2

[dubone]

I thought of one other possible explanation for their rapid sales that didn't occur to me before (and I haven't seen before on this thread, but I might have missed it). There isn't really a "back" of the building with no views. Because the building is on a diagonal against the street grid, units on what would have been the back side are able to have views that see Charlotte Plaza, One Wachovia, and the future Nascar HOF. Even the spot in the building with theoretically the worst views will have views of other highrises, such as the Panos complex, the South McDowell office and hotel buildings, and the government center buildings.

The remaining units of The Park only get to see that one government center building, which I think is the main reason for their mollasses slow sales recently. But TTT will see all those buildings like a mid-rise skyline, so the effect is very different.

[UrbanCharlotte]

Well, the reason I think TTT is selling so fast, and the Vue isnt, is because TTT probably has a lot more investors buying units then at the Vue. I heard it was really tough for an investor to buy at the Vue.

[AuLukey]

Is it bad that I get disappointed whenever I look at the webcam and construction has barely changed from the previous day? I'm obsessed with this project getting finished.

[jednc]

No Luke...I'm right there with you. I want this tower to start rising. The foundation work seems to be taking forever! Focus on Trademark and Ave. for a while. They seem to be reaching that point where they are taking off and seem to be moving faster than before. It's probably psychological, but they are satisfying to watch now that they have some height.

[krazeeboi]

Well, the reason I think TTT is selling so fast, and the Vue isnt, is because TTT probably has a lot more investors buying units then at the Vue. I heard it was really tough for an investor to buy at the Vue.

That may have something to do with it. I was talking to a guy today who turned out to be an investor, and he's buying a unit at 210 Trade.

[Charlotteman]

An interesting note: on SkyscraperPage in Charlotte's diagram, the Hearst Tower is listed as taller than 210 Trade, even though in the pic it is clear that 210 is taller (?)

[CSP]

It also said on that site that the 210 Trade was going to be 210 meters, but when they got information that it is going to be 183 meters that guy didn't bother to correct the picture.

[Charlotteman]

I'm confused. How tall will it be?