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amoyyao

Charlotte's Condo Market

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Just moved here three months ago and found that the high rise condos here are about the same price as those in DC metro area. Given DC's greater appeal (hoursing price is obviously not part of it) to more people, is there any particular reason that these two markets should be so close?

Thanks for sharing your insight.

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are you sure? what if you compare prices per SF? are you talking 1, 2, or 3 BR condos..........

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Just moved here three months ago and found that the high rise condos here are about the same price as those in DC metro area. Given DC's greater appeal (hoursing price is obviously not part of it) to more people, is there any particular reason that these two markets should be so close?

Thanks for sharing your insight.

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Well since you mentioned high-rise condos, then you can't make a direct comparison since there are no true high-rises in the District. I assume if you are trying to compare high-rise prices, then you are comparing downtown Charlotte to Rosslyn or Arlington or Crystal City, and I would argue land in downtown Charlotte is at least as expensive as those locals, and would probably be considered more desirable to the respective populouses.

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Plus...Charlotte doesn't have a large supply. So, it compares with many markets price-wise due to the scaricty of the condos.

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I find it hard to believe DC's and Charlotte's market are similar on a per square foot basis. I'd like to see some evidence of that.

Also, I just saw today that DC's population actually shrunk over the past year - one of only 3 states incl. DC(really 2 as Lousiana was because of Katrina) that did shrink. So there you go - the demand is leaving town.

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Yes, I am mostly refering to those neighboring cities such as Arlington, Clarendon. People can get around pretty easily from these cities--it's usualy 10 minutes metro to DC and 15-25 minutes' drive to Mclean. The "high rise" I am referring to are usually from 13 to 25 stories.

Condo market has been suffering since this year and will continue like this for at least a while.

DC metro area has a much larger population than in Charlotte and due to their zoning ordinance, condo development have beeen limited.

DC has been so expensive and many people, once they have other choices, are beginning to move away. But to me, Charlotte seems to be just like DC in the late 90s--though housing market is booming, no one cares about how high these houses can sell--as long as there's a later fool to take over.

But gradually the inflow of people will slow down and people may find that the mortgage is becoming too much a burden. Young professionals find other opportunities and retirees find the prices here are too high to afford.

Please help me to prove I am wrong--I really want to buy a high rise condo but 400-500k is simply too expensive--not because I cannot afford but I believe they are not worth that much.

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Yes, I am mostly refering to those neighboring cities such as Arlington, Clarendon. People can get around pretty easily from these cities--it's usualy 10 minutes metro to DC and 15-25 minutes' drive to Mclean. The "high rise" I am referring to are usually from 13 to 25 stories.

Condo market has been suffering since this year and will continue like this for at least a while.

DC metro area has a much larger population than in Charlotte and due to their zoning ordinance, condo development have beeen limited.

DC has been so expensive and many people, once they have other choices, are beginning to move away. But to me, Charlotte seems to be just like DC in the late 90s--though housing market is booming, no one cares about how high these houses can sell--as long as there's a later fool to take over.

But gradually the inflow of people will slow down and people may find that the mortgage is becoming too much a burden. Young professionals find other opportunities and retirees find the prices here are too high to afford.

Please help me to prove I am wrong--I really want to buy a high rise condo but 400-500k is simply too expensive--not because I cannot afford but I believe they are not worth that much.

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What are the average prices in the DC areas you are referring to? Average SALES prices downtown in Charlotte are $250 - $400 per foot, most are at the $300/foot range. Some of the high-rises that won't be done for a year or two are higher, but not sales that are occuring today. There are plenty of properties in central Charlotte lower than the $400,000 - $500,000 you quoted, but obviously any that are $250,000 or so are small. There are center city properties for less than $200,000.

A lot of the reason prices are relatively high is the supply and demand factor and the influx of new folks moving to the area.

As for the speculators, we'll see how long that lasts, flip properties aren't selling that well after huge mark-ups, but developer marketed and priced properties are selling just fine.

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DC has been so expensive and many people, once they have other choices, are beginning to move away. But to me, Charlotte seems to be just like DC in the late 90s--though housing market is booming, no one cares about how high these houses can sell--as long as there's a later fool to take over.

But gradually the inflow of people will slow down and people may find that the mortgage is becoming too much a burden. Young professionals find other opportunities and retirees find the prices here are too high to afford.

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I think it has to do with the relative importance of the center of Charlotte with respect to the rest of the city. Unlike D.C., which is fairly widely spread out with businesses well and evenly distributed, you've got some of the biggest, best paying employers all centered within a closed-off 1 by 1 mile loop. As a result, there's a huge spike in the value of condos in this very small, very important location. It's like a mini-Manhattan island. Move even two miles away from this location and you're paying 1/3 or 1/4 the price per square foot.

A 90 pound woman stepping on your toe with the tip of her stilleto heel's going to hurt a lot more than a 350 pound guy with size 15 shoes.

If I were you, I would head out from the center until you hit some of those lower price points. Stuff that's up and coming along the rail line, for example, should be a lot better deal. Also, check out Courtside. People aren't recognizing that some of those places are still going at less than $280 per square foot. High-rise construction is expensive and from my understanding, that's not that much of a markup over cost.

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^Indeed. I still say a lot of it is due to speculation, flippers, and an abundance of cheap but risky financing. Once this market calms down like the rest of the country you are going to see a lot of corrections in the Charlotte market.

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Second, the condo prices are high even outside uptown. For e.g., Rosewood sells close to 500k for a two-bedroom.

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Although I prefer high rise condos, I hope my neighborhood will have some privacy from the daily traffic, lawn and trees aroud my building, etc. This is what I got from my old apartment in Arlington and this is not what I am going to get from Charlotte uptown. I guess I will get quite some noise and gas smell and vagabonds ready to smash some car windows.

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Given DC's greater appeal (hoursing price is obviously not part of it) to more people, is there any particular reason that these two markets should be so close?

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It's a little funny how much of this discussion simply accepts the premise that housing costs in DC and Charlotte are comparable, and that the reason has something to do with Uptown's desireability.

Hello? :shades:

Any measure of real estate prices I've ever seen shows an incredible distance between these markets. It is interesting that Charlotte now has some units, at the high end, that compare with DC prices. But that's the extent of the overlap. Our most expensive units have now reached DC levels.

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What's even more amazing, is to see condos selling for $300+/sq ft in the south park area, while surrounding neighborhoods sell in the $170/sq ft range. Many people are overlooking the great houses in Fairmeadows, Beverly Woods, Barclay Downs, etc.

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You seem to be choosing only the high priced condos for comparison. Rosewood is in an expensive part of town. There are plenty of nice safe parts of town where you could get the same sized condo with the same bedroom count for less than half of that. Elizabeth, Plaza-Midwood, Central Ave, NoDa, Walnut Hill...just to name a few. Not all of Charlotte is extremely expensive, plenty of Charlotte is though.

Demand is driving these prices. As soon as people are no longer willing to pay the high prices, they will stall or drop. I think it is amazing that people are shelling out money for high-rise condos that, when done in a year or two, will close out at $500 - $700 per foot, but that is just me -- they seem to be willing to do it.

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It's a little funny how much of this discussion simply accepts the premise that housing costs in DC and Charlotte are comparable, and that the reason has something to do with Uptown's desireability.

Hello? :shades:

Any measure of real estate prices I've ever seen shows an incredible distance between these markets. It is interesting that Charlotte now has some units, at the high end, that compare with DC prices. But that's the extent of the overlap. Our most expensive units have now reached DC levels.

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Thanks for your response--I am coming to get the mentality here.

I am not sure "DC" is losing its people--unless you are talking about DC DC--the reason the real estate has picked so much in the past several years is because so many people have moved to Northern Virginia and Southern Maryland. And now when the market has stabalized or decreased in these two areas (not because people are moving away but because investment craze has subsided), inner DC has picked its pace--areas like Union Station has seen a tremendous revival in the recent 3 years and it seems this trend will continue for a while as more and more poorer people are being driven eastwards.

Although I do not have ready statistics available, I do feel that Fairfax, Arlington, Montagomery give me a better sense of security than Charlotte. Two friends of mine who have their car window smashed within first month of their move to Charlotte. Of course certain areas in DC are bad--but nobody decent lives there.

In Charlotte, things are different--there does not seem to be a dividing line for crime--one incident mentioned above happenedin Ballentine (a very nice neighborhood) and the other in a gated Uptown apartment.

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Thanks for your response. I really appreciate it. I have some followup thoughts, however.

First, personally, I do not think living within the 277 circle is such a big deal. Unlike Georgetown or Crystal City of DC metro, uptown Charlotte is not that appealing to many people I know of: it is not as dynamic, it does not have so many choices for night life. Although I prefer high rise condos, I hope my neighborhood will have some privacy from the daily traffic, lawn and trees aroud my building, etc. This is what I got from my old apartment in Arlington and this is not what I am going to get from Charlotte uptown. I guess I will get quite some noise and gas smell and vagabonds ready to smash some car windows.

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As for saying that people are willing to pay $500 and up per SF I'm not so sure. In many cases people put down there 5% to hold the condo and hope to sell it two years later when before the project is finished. I have 4 friends who did this on one of the projects uptown and one of them is hoping to sell his before they are finished next summer...because it will be a streach for him to afford it. There are plenty of people who do this so lets see how many foreclosures/defaults there are

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I'm curious where they are doing this since all contracts for new projects that I've seen in center city (I think I've read them all) specifically don't allow assignment of contract therefore you can't "sell" your condo until you yourself have closed. Therefore they will have to buy at whatever price they committed to ($500 if that was it!), then put it on the market. That is why the big flood of units from Courtside, 230, and M Street the minute the units are closed out. Most contracts even state that you can't advertise the unit you are buying as a resale until you have closed on it. I hope they read the small print or if they are allowed to do this, what project allows this? I know none of the big projects allow this -- I think Ave and Vue might even have language that gives the developer right of first refusal to buy the unit back at its original price plus just a bit of expenses if it comes back on the market sooner than 12 months after it closes.

As for seeing how many foreclosures or defaults there are, hopefully it won't get to that and I doubt it will, but the speculators who bought at Courtside and M Street have been slowly and quietly lowering their prices or adding tons of bonuses and incentives for the past few months while their properties have not resold. I think the prices will tumble before foreclosures begin. Most that can afford to buy and speculate on a property like this won't let it go to foreclosure and ruin their credit before they cut the price and get out. Your statement "there are plenty of people who do this..." is true, but a new phenominon in Charlotte -- we have really only had these couple projects to date where a lot of units have come back on the market right after closing as flips, so we are still watching to see if it will work here or if those who made lots of cash a few years ago were just lucky to be at the front of the wave.

Most that I know that made a lot of money reselling properties in center city didn't go into it as an investment, but bought at, most of them Gateway and Ratcliff, to live there and ended up selling when the prices hit the roof. Developers are pricing properties a lot higher now so that built-in equity when you close was likely already factored into your purchase price.

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You guys are talking about two different things. One is selling the "contract" that you have to purchase a property which I would think would be difficult or impossible in NC. I don't think that is happening in downtown so I am not sure why it was brought up.

The other is selling the property "after" you have closed on it. I don't see where any restrictions on that would hold up that well in NC and owners are free to sell their property as they see fit. People who buy a condo these days with the idea they are going to quickly flip it to make some cash are entering a very risky crap shoot.

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