Who is going to buy all the Condos, (Part II)

[KJHburg]

Charlotte is among the top cities for millenial renters coming in #6  OLD photo of skyline alert just 2 years ago makes a difference.

https://www.nreionline.com/multifamily/15-us-cities-most-popular-millennial-renters

I'm in #3 today.  

[t_money]

The title of this thread is a bit funny to me, because not having seen it from the beginning, I see Charlotte as not having any condos to buy! Its all apartments. So the thought of 'who will buy all the condos' seems odd to me as I think "What condos??".

[Blue_Devil]

2 hours ago, t_money said:

The title of this thread is a bit funny to me, because not having seen it from the beginning, I see Charlotte as not having any condos to buy! Its all apartments. So the thought of 'who will buy all the condos' seems odd to me as I think "What condos??".

I am pretty sure condos would actually be snatched up fairly fast if a lot went onto the market. 

[KJHburg]

Condo construction financing is still very hard to come by unless lots of presales and that is why you only see small projects here in Charlotte.   So many banks got burned bad with condos loans in 2007/2008/2009 they are not doing those type of loans.  (think 210 Trade 50 story condo tower)   Apartments are easier to get financed.  However loan issues does not apply to townhomes.  When a condo building is built you have to build the whole thing at once including any unsold units.  Townhomes sell by row and once the row is sold or almost sold out they start construction.    This keeps down the speculative nature of building.    Plus NC has unusual laws in regarding to new condos with liability of the contractor for several years afterwards which is problematic for some.  

WARNING if you do buy a presale condo know where your deposit is going and who is holding it.  Insist on a certified NC trust account with an attorney or an agent not just held by the builder.    Many 1000s of dollars where lost with the 210 Trade condo alone.  

Edited October 23, 2020 by KJHburg

[KJHburg]

Heard Fulcrum condos on S Tryon in Southend are having some delays but still should be built.

Which cities are attracting millenials renters?  of course Charlotte #6 on this list based on % of that age group renting.

1-5 to save you the slideshow are SEA, SFO, AUS, HOU, SATX 

15 Most Popular U.S. Cities for Millennials | National Real Estate Investor (nreionline.com)

[KJHburg]

This is interesting.  This shows the breakdown of home/condo prices in the Charlotte market and only one is showing downward pressure and that is uptown Charlotte.  all other submarkets in the last 10 months have increased prices. 

As Charlotte-area home prices keep rising, these areas are leading the growth - Charlotte Business Journal (bizjournals.com)

[tozmervo]

1 hour ago, KJHburg said:

This is interesting.  This shows the breakdown of home/condo prices in the Charlotte market and only one is showing downward pressure and that is uptown Charlotte.  all other submarkets in the last 10 months have increased prices. 

As Charlotte-area home prices keep rising, these areas are leading the growth - Charlotte Business Journal (bizjournals.com)

What is the "Lake Norman" submarket? Huntersville, Cornelius, and Davidson are all listed separately. 

[KJHburg]

1 hour ago, tozmervo said:

What is the "Lake Norman" submarket? Huntersville, Cornelius, and Davidson are all listed separately. 

It used to be classified as lakefront or lake access communities all around the lakes regardless of counties.  That is probably what this is referring to. 

[kermit]

3 hours ago, KJHburg said:

This is interesting.  This shows the breakdown of home/condo prices in the Charlotte market and only one is showing downward pressure and that is uptown Charlotte.  all other submarkets in the last 10 months have increased prices. 

As Charlotte-area home prices keep rising, these areas are leading the growth - Charlotte Business Journal (bizjournals.com)

So does this make housing in uptown more attractive than other submarkets ("its cheaper!") or less attractive ("its a bad investment!")?

Its a genuine question, people seem to view real estate differently than any other commodity and I am not sure I understand why.

Edited December 9, 2020 by kermit

[KJHburg]

2 minutes ago, kermit said:

So does this make housing in uptown more attractive than other submarkets ("its cheaper!") or less attractive ("its a bad investment!")?

Its a genuine question, people view real estate very differently than any other commodity and I am not sure I understand why.

I think since this was looking at the last 10 months is  that uptown was  once a very vibrant 18 hour community is much much less so now    With the dearth of employees working there, lack of the events being held there, more restaurant closings than any other concentrated area etc the uptown area has taken the hits more greater than any neighborhood in the area.   The protests did not help either but I do think it will rebound as there is not much supply and definitely not any for sale product being built uptown.   But Covid knocked off the glow of uptown and the activity levels in surrounding neighborhoods has rebounded much more quickly  like Southend etc.   The advantages of a back to urban area movement can be found now in other places in Charlotte like Southend. 

 

[KJHburg]

One other thing I thought about this is that only the lower priced condos are selling which would also bring down the average price uptown.  

any way I feel this will correct soon enough.  

I just checked 174 homes and condos (and yes there are a few SF homes in 28202 zip code) have closed in the last 6 months.

Quick Statistics  $146,000  Lowest price sold ,     $1,275,000   Highest price sold  ,  $332,094    average price ,    $285,000,  median price  and that is last 180 days in a quick MLS search.  

Lowest price in the Silos Loft highest price in a penthouse in the Avenue 

[Hushpuppy321]

The latest report out shows Charlotte at 13th for new apartment starts during 2020 which is not bad.  I am tired though of CLT playing 2nd fiddle to Nashville.  They were like #10 on the list and probably will be ahead of CLT for some time due to Amazon and other business relocations.  I guess bigger isn’t always better...

Edited January 14, 2021 by Hushpuppy321

[RANYC]

2 hours ago, Hushpuppy321 said:

The latest report out shows Charlotte at 13th for new apartment starts during 2020 which is not bad.  I am tried though of CLT playing 2nd fiddle to Nashville.  They were like #10 on the list and probably will be ahead of CLT for some time due to Amazon and other business relocations.  I guess bigger isn’t always better...

Charlotte is a great town, but no offense, it is in no way a destination city.  Nashville is on people's radars as a place many of them really want to visit, even when they have no family here and no business here.  Charlotte simply isn't that kind of place, as far as I can tell. 

We lack a bustling, vibrant, nationally-renowned go-to district containing any sort of dense, WALKABLE, corridor of an ABUNDANCE in entertainment and indulgent offerings/venues.  Sorry, but South End isn't even close and so far, no part of South End is even branded as having that.  South End is great for local needs, but no one is taking flights to Charlotte strictly to take in South End.  I don't see that changing anytime soon as the city doesn't really want to create a plan around replicating what places like Nashville and Austin have, and perhaps a city plan for something like that really doesn't work...it just has to come about organically.  

[Urban Cowboy]

2 hours ago, RANYC said:

Charlotte is a great town, but no offense, it is in no way a destination city.  Nashville is on people's radars as a place many of them really want to visit, even when they have no family here and no business here.  Charlotte simply isn't that kind of place, as far as I can tell. 

We lack a bustling, vibrant, nationally-renowned go-to district containing any sort of dense, WALKABLE, corridor of an ABUNDANCE in entertainment and indulgent offerings/venues.  Sorry, but South End isn't even close and so far, no part of South End is even branded as having that.  South End is great for local needs, but no one is taking flights to Charlotte strictly to take in South End.  I don't see that changing anytime soon as the city doesn't really want to create a plan around replicating what places like Nashville and Austin have, and perhaps a city plan for something like that really doesn't work...it just has to come about organically.  

Agreed. Charlotte/CRVA leverages the Whitewater Center a lot in their advertising and materials.  And Nascar Hall of Fame (meh). But those don't make Charlotte a destination city. 

The Whitewater Center resonates with me and if I was out of state or hadn't been to Charlotte before, I would incorporate the Center into a Charlotte visit. But would it make me want to visit? Nashville is unique because of the country music/honky tonk vibe that is only rivaled by New Orleans in terms of American cities with unique cultural+musical+drinking identities being THE draw. I'm not including Vegas because it is a playground and lacks authenticity (to me). 

If you want a case study in what TO DO...I think Austin has done a phenomenal job of capturing their city's spirit/essence and marketing it to the masses. When I think of Austin I think of Congress Avenue leading down toward the city, and Zikler Park. And the E. Caesar Chavez area. A burgeoning skyline. What they've been able to market to the masses are simple images that evoke a sense of place. A packed field for SXSW, a brisket coming out of the smoker, cowboy boots walking down Congress. Another example of a smaller market that's kicking our ass in branding is Charleston. 

Charlotte's identity, I feel, is an enigma and we don't have a cohesive voice. And we do a terrible job telling our story, or sharing our identity. If Charlotte was a brand, what would it be? I'm so sick of the Bojangles jokes, etc. But that's what people say. We're a city that so quick to cheer the latest restaurant from another market opening a Charlotte location, that we forget to cheer on and support the homegrown businesses.

The Charlotte I want to visit capitalizes on the following imagery: The light rail pulling into uptown. The Whitewater Center. A rooftop drink at sunset. Around the Crown 10K.  Cranes in South End. Pulled Pork. Yes, Nascar under the lights. Panthers, Hornets, Knights, MLS. Someone busking in Romare Bearden Park. Students at CPCC walking to class while the Gold Line moves past. Someone running along little Sugar Creek. Tubing in the Catawba. An installation at the Mint, exhibit at the Gantt. Street meat on Tryon at lunch time. Optimist Hall and Camp North End. An artist in NoDa. A sign of the times concert or the music factory. Carowinds and the airport. Golf even. 

Our problem is we spend so much time looking at everyone else and how we measure up, that we forget to tell our own story. And so we don't have one on the national scene outside of a nice skyline and banking. 

 

[kermit]

^ Charlotte is the Singapore of the South

(its more boring than most places, we (arguably) have above average food*, and its the place where people from the region go to make their fortunes)

* not sure why I said that. I don't think there is much great to eat here these days.

Edited January 14, 2021 by kermit

[KJHburg]

this is about the rental market nationally in urban areas but there is softness in uptown Charlotte with lots of completions coming online very soon with the Ellis and 500 West Trade. 

Plunging City Rents Could Spawn Urban Resurgence | Realtor Magazine

[Bikeguy]

tsk,tsk,tsk.

 

https://www.nytimes.com/2021/02/03/realestate/luxury-high-rise-432-park.html?action=click&auth=login-email&login=email&module=Top Stories&pgtype=Homepage

[KJHburg]

who is going to rent all these apartments?  well Charlotte absorbed more apartments than completed units in 2020.   That is the best compared to  these top 24 markets.  From CBRE:

Sum of Markets

81,100 55,600 279,600 190,600 1.7 1.2 

LEGEND:  COMPLETIONS 4Q 2020; NET ABSORPTION 4Q2020; 2020 FULL YR COMPLETIONS; COMPLETIONS % OF INVENTORY; NET ABSORPTION % OF TOTAL INVENTORY

Charlotte was the BEST performing market of these the top 24 by % of absorbed so look for more apartments to come! even better than Austin.  Who was the worst market? why NYC of course. 

1 New York 7,700 (2,600) 23,200 (9,200) 1.0 -0.4
2 Houston 4,500 2,300 18,000 12,400 2.8 1.9
3 Dallas 3,200 1,500 14,200 9,600 2.5 1.7
4 Washington, D.C. 3,100 200 11,900 4,400 1.9 0.7
5 Boston 2,200 1,000 11,600 4,700 2.3 0.9
6 Minneapolis 2,200 700 9,500 6,500 3.2 2.2
7 Atlanta 2,500 2,800 8,600 11,200 1.9 2.5
8 Austin 2,000 700 8,400 4,400 3.6 1.9
9 Los Angeles 3,000 5,500 8,300 (800) 0.8 -0.1
10 Denver 2,400 1,000 8,300 7,800 2.5 2.3
11 Chicago 2,400 (2,300) 8,300 200 1.1 0.0
12 Seattle 2,800 500 8,000 4,000 2.0 1.0
13 Miami 3,100 2,900 7,800 4,600 2.6 1.5
14 San Antonio 1,200 500 6,700 6,000 3.4 3.0
15 Charlotte 2,100;  1,900;  6,600 total completed in 2020;  6,700 total absorbed in 2020; 3.8% ; 3.9%
16 Orlando 1,100 600 6,500 4,300 3.0 2.0
17 Ft. Lauderdale 2,300 2,200 6,200 6,400 3.1 3.2
18 Oakland 1,100 800 5,900 4,500 2.8 2.1
19 Portland 2,500 2,300 5,800 5,700 2.7 2.7
20 Kansas City 900 300 5,400 4,700 3.4 3.0
21 Philadelphia 1,900 2,000 5,000 5,100 1.6 1.6
22 Phoenix 1,100 1,600 4,900 5,600 1.4 1.6
23 Baltimore 1,500 1,900 4,800 6,100 2.3 2.9
24 Columbus 1,000 700 4,700 4,700 2.8 2.8

U.S. Multifamily Figures Q4 2020 | CBRE

 

 

[NYtoCLT]

Obviously there are far more rental buildings being built than for-sale condos, but does anyone have any numbers on how many condos were built?  My suspicion is that they would sell reasonably well but I'd be curious if there was data to back that up.

[KJHburg]

Townhomes are selling well all over town but not at the numbers of apartments being leased in any stretch.   Stacked condo flats are just a small part of the market here.

in another study showing the markets with most apartment completions this year (2021) Charlotte is in the top 25 actually # 16 with 6692 completions expected this year. 

25 Markets Adding the Most Multifamily Units in 2021 | Wealth Management

 

[KJHburg]

where are the condos and townhomes and single family homes in Charlotte?  great study with maps from UNCC Urban Institute

Notice house sizes are increasing greatly intown as smaller more affordable homes are being replaced by much larger homes.

Updated maps let you explore Charlotte’s changing housing | UNC Charlotte Urban Institute | UNC Charlotte

[Nathan2]

21 hours ago, KJHburg said:

where are the condos and townhomes and single family homes in Charlotte?  great study with maps from UNCC Urban Institute

Notice house sizes are increasing greatly intown as smaller more affordable homes are being replaced by much larger homes.

Updated maps let you explore Charlotte’s changing housing | UNC Charlotte Urban Institute | UNC Charlotte

Can anything be done about this? I feel like this is a major affordability issue that will affect people for generations. We need more housing not larger more unaffordable homes closer to the city.

[kermit]

On 2/19/2021 at 9:16 AM, Nathan2 said:

Can anything be done about this? I feel like this is a major affordability issue that will affect people for generations. We need more housing not larger more unaffordable homes closer to the city.

Yup.

• Relax zoning restrictions and eliminate all single family exclusive zoning (ADUs everywhere!). This would also include eliminating all minimum lot size and setback requirements 
• Eliminate parking requirements for new construction and any rehab work
• Streamlined permitting. Perhaps wave all permit fees for residential structures of less than 1000 (?) square feet. (I regularly toy with converting my detached garage to an ADU, but design costs and permitting fees are the first things that discourage me)
• Density bonuses for multifamily which offer x% of affordable units
• Reduce opportunities for NIMBY pushback on increased residential densities
• Increase the availability of transit (including infill stations where appropriate and improved ped/bike station access) so that housing next to it is not in limited supply
• Ban snout-houses (garage in front). (This would not do anything for affordability, they just suck)

and lots of other things that don’t immediately come to mind. Unfortunately the political structure of most cities is driven by developers and home owners, both groups want to keep home prices high.

Edited February 20, 2021 by kermit

[KJHburg]

23 hours ago, Nathan2 said:

Can anything be done about this? I feel like this is a major affordability issue that will affect people for generations. We need more housing not larger more unaffordable homes closer to the city.

Yes we need to make as many people homeowners as possible even using community land trusts where the land is owned by a  non profit and the home is privately owned with some restrictions about what happens when the owner sells the home.   The problem in our inner city neighborhoods is that many people are renters and so when the values zoom up the property owners sell them.  I have read about neighborhoods in atlanta where 90% of the residents are renters which of course leaves they vulnerable to redevelopment and being pushed out of their homes.  Habitat for Humanity is a great agency that is dealing with building homes and homeownership.  They ususally have restrictions on selling in the first XX of years too. 

We need more housing everywhere in this region to keep with with demand which we are not now.  ADUs are good but they are primarily rental but is a good source of affordable rentals.  I am a big advocate of home ownership because of the stability it provides the neighborhood.  

https://www.westsideclt.org/

Check out Atlanta's land trust much bigger and been around longer than ours

https://atlantalandtrust.org/

 

[kermit]

^ the downside of emphasizing ownership is that it reduces mobility and flexibility for people as they change jobs or family situations. Transaction costs for real estate are high, so being forced to undertake a couple of home sales because of job changes can be financially punishing. Our current hot market masks this overhead.

[I am not knocking ownership, I agree that it is important for stability and continuity, but not everybody wants it. There has been a generational shift on views of residential ‘permanence’ that successful housing policies will need to accommodate.]