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

[a2theb]

15 minutes ago, KJHburg said:

Double rarity: stacked condo development and 2nd rarity it is in the far suburbs near Highland Creek in NE Charlotte. Very close to I-485 but walking distance to Publix anchored center. 

Project that'll add dozens of condos in north Charlotte slated to break ground soon - Charlotte Business Journal (bizjournals.com)

""That development, called Prosperity, is slated to bring more than 80 condos and about 9,000 square feet of ground-floor retail space to a 3.2-acre site at the corner of Benfield Road and Summer Creek Lane, near the Highland Creek neighborhood.  Developer John Wagener, managing partner at Fort Myers, Florida-based The Greenstone Group LLC, says he expects to break ground on the project in about a month, once he receives a permit from the city of Charlotte allowing him to grade the site. Vertical construction on the building is expected to start in August.  Plans call for a mix of two studio, 29 one-bedroom, 47 two-bedroom and nine three-bedroom units across four stories, says David Hoffman of Charlotte-based David Hoffman Realty New Homes, which is handling the condo sales and marketing at Prosperity. Hoffman anticipates the project to appeal to both young professionals and empty-nesters.  The studio and one-bedroom condos will be about 981 square feet, including one bathroom, and priced around $295,000, Hoffman says. The two-bedroom units will include 1,339 square feet and two bathrooms, with a price of about $359,000, while the three-bedroom condos will have 1,667 square feet, two bathrooms and a price point of $450,000.""

 

Those prices for Highland Creek are insane. Don't see that panning out.

[KJHburg]

8 minutes ago, a2theb said:

Those prices for Highland Creek are insane. Don't see that panning out.

I agree they are agressive but brand newn and might appeal to parents or people downsizing from the nearby area.  Like I said it very much a rarity but the housing market is strong and with Centene opening up not too far away might have a market. 

[SgtCampsalot]

5 hours ago, a2theb said:

Those prices for Highland Creek are insane. Don't see that panning out.

That's also Prosperity Village which is possibly the only new, "greenfield" development area of the CLT region in which I'd ever want to live because the small blocks and decent walkable facilities make it very feasible to be contented in walking everywhere.

[KJHburg]

More 2020 data from Zillow where people moved from and where they relocated  and Charlotte is one of those where they moved.

""The five markets with the most outbound movers in 2020, according to North American Van Lines, were Chicago, New York, Los Angeles, San Diego and San Francisco. The five markets with the most inbound movers were Phoenix, Charlotte, Austin, Dallas and Sarasota, Fla. Nationwide, the average local home value in the ZIP codes movers left was $419,344; the average home value in the ZIP codes they moved to was $392,381, a difference of almost $27,000""

U.S. Movers are Reshuffling into Larger, More-Affordable Homes - Zillow Research

[kermit]

On 1/31/2008 at 8:56 AM, monsoon said:

We have had a spirited discussion on this in the past and now with the news that 300 South is canceled on the heels of the news that One Charlotte tower is also dead, and no news from Trump, has the condo bust finally hit Charlotte? Did too many projects get announced in a city where there were not enough real buyers to support and/or will units that have already been built start to experience devaluation?

 

What other projects could be canned as well?

So the irony of this thread is killing me. The first post in the thread (January 2008) is quoted above. 

What is the worst that would have happened if developers went nuts and built all of the projects they proposed back in 2008? With the benefit of hindsight I think we would have had: a) a handful of bankrupt developers who probably would have come back in a new corporate form; b) a more residential uptown which might have slowed the extinction of uptown businesses in the COVID era; c) more housing for everybody (yes, I know these would have been luxury units, but neoclassical economics tells us that filtering down should happen).

Charlotte’s growth rate has been remarkably steady for 30+ years, I honestly think that everyone involved in development could see that overbuilding is going to only be a short term issue in Charlotte. WTF were we so worried about too much housing in Charlotte in 2008?

Edit: I will admit that late 2008 was an existentially scary time in Charlotte, but still.

Edited June 12, 2021 by kermit

[KJHburg]

Dan Ryan was buiilding these for sale townhomes now they are building them for Progress Residential all rentals.  I think that is a shame however they are a few for sale new townhome properties nearby the Ryan and the larger TriPointe homes across S Tryon and up against 77. But homeownership in the area creates wealth over time and neighborhood stability. 

renting for $3200 a month plus.   I can't see how this is any cheaper than owning.

Rental Houses in charlotte, NC | Progress Residential (rentprogress.com)

Progress is the big wall street based firm snapping up 1000s of homes across this area.

Wall Street-backed landlords now own more than 11,000 single-family homes in Charlotte | UNC Charlotte Urban Institute | UNC Charlotte

Owning a home is great idea for the long term and if you ever have to leave the area you can become the landlord. 

1st photo is the for sale Ryan Homes townhomes. 

 

[Blue_Devil]

41 minutes ago, KJHburg said:

Dan Ryan was buiilding these for sale townhomes now they are building them for Progress Residential all rentals.  I think that is a shame however they are a few for sale new townhome properties nearby the Ryan and the larger TriPointe homes across S Tryon and up against 77. But homeownership in the area creates wealth over time and neighborhood stability. 

renting for $3200 a month plus.   I can't see how this is any cheaper than owning.

Rental Houses in charlotte, NC | Progress Residential (rentprogress.com)

Progress is the big wall street based firm snapping up 1000s of homes across this area.

Wall Street-backed landlords now own more than 11,000 single-family homes in Charlotte | UNC Charlotte Urban Institute | UNC Charlotte

Owning a home is great idea for the long term and if you ever have to leave the area you can become the landlord. 

1st photo is the for sale Ryan Homes townhomes. 

 

That is a real shame. I get why they are doing it, rent's are greater then the loan costs + large scale can keep repair costs down + return on property values when they sell. But still doesn't feel right. 

[KJHburg]

Well here is another new townhome project in Southend from Toll Brothers a national builder.

""Toll Brothers announced Wednesday the grand opening of Tremont Station, which includes 103 new townhomes off Tremont Avenue in South End. Pricing for the townhomes will start in the mid-$500,000s. A question sent to Toll Brothers asking when the first units will deliver was not immediately returned. The Charlotte Business Journal reported in February that the first units were targeted for delivery in October. However, the Toll Brothers sales team is accepting appointments for the townhomes. The sales center is off site but also on Tremont Avenue. The townhomes will range between 1,830 and 2,292 square feet, featuring floor plans with three and four bedrooms.""

Toll Brothers opens new townhome project in South End, adding to Charlotte portfolio - Charlotte Business Journal (bizjournals.com)

New Luxury Homes for Sale in Charlotte, NC | Tremont Station (tollbrothers.com)

[jjwilli]

5 hours ago, KJHburg said:

Well here is another new townhome project in Southend from Toll Brothers a national builder.

Any word if the city has plans to complete Dunavant to S Tryon? This new townhome project will complete roughly half of the connection and it would be great to see the city complete the other half.  It also would not hurt to have another light at Dunavant and S Tryon.

[DEnd]

11 hours ago, KJHburg said:

renting for $3200 a month plus.   I can't see how this is any cheaper than owning.

Renting is never Cheaper than owning , especially when comparing like for like.  People do not rent because it is cheaper, they rent because they don't have the money to buy, are in a transitional stage of life, they don't want to buy, or buying into the market is not feasible. Landlords make money on the price difference between renting and buying, if that price difference isn't there landlords will sell.   

[KJHburg]

Who is going to buy all those condos and houses?  If they can find them as inventory levels are still way low here is how Charlotte stacks up.  Notice median prices of Nashville and Raleigh are both much higher than Charlotte's median.  Charlotte coming in at $389,000 vs  $411,000 in Raleigh.  Check out those California markets ouch makes NY and Boston and DC look cheap. 

Lift in Listings as Home Prices Shatter Records | Realtor Magazine

[RANYC]

17 hours ago, KJHburg said:

Who is going to buy all those condos and houses?  If they can find them as inventory levels are still way low here is how Charlotte stacks up.  Notice median prices of Nashville and Raleigh are both much higher than Charlotte's median.  Charlotte coming in at $389,000 vs  $411,000 in Raleigh.  Check out those California markets ouch makes NY and Boston and DC look cheap. 

Lift in Listings as Home Prices Shatter Records | Realtor Magazine

Both Raleigh and Nashville have higher medians and homes spend considerably fewer days on the market than in Charlotte.

Austin and Denver medians are just extraordinarily higher.  Are they even in the same peer group with Charlotte still?  Even at their medians of 525k and 600k respectively, their  homes spend far fewer days on the market than the homes in Charlotte.  Should I interpret this data to mean that these other cities are just far more desirable cities experiencing much more torrid growth than Charlotte?

[HopHead]

2 hours ago, RANYC said:

Both Raleigh and Nashville have higher medians and homes spend considerably fewer days on the market than in Charlotte.

Austin and Denver medians are just extraordinarily higher.  Are they even in the same peer group with Charlotte still?  Even at their medians of 525k and 600k respectively, their  homes spend far fewer days on the market than the homes in Charlotte.  Should I interpret this data to mean that these other cities are just far more desirable cities experiencing much more torrid growth than Charlotte?

I find it interesting that both Charlotte and Dallas are almost identical in terms of median price and median days on the market.  My SIL just moved there from California and can tell you it's as hyper competitive of a real estate market as anyone else. And I wouldn't really consider them to be peers. There are a lot of different ways to interpret this data. All of which is good for a lot of the metros listed. 

[atlrvr]

Austin median income is 15% higher than Charlotte.

Charlotte homeownership rates at 7% higher than Austin.

Austin migration flows are from higher prices markets than Charlotte on average.

And lastly, with all financial investments in bull markets, the recent trend is more powerful than any other factor by magnitudes.  (i.e. the single greatest factor in predicting if the stock market will set a new high, is did it set a new high the previous day)

So, any single interpretation would likely be flawed IMO.

[KJHburg]

8 hours ago, RANYC said:

Both Raleigh and Nashville have higher medians and homes spend considerably fewer days on the market than in Charlotte.

Austin and Denver medians are just extraordinarily higher.  Are they even in the same peer group with Charlotte still?  Even at their medians of 525k and 600k respectively, their  homes spend far fewer days on the market than the homes in Charlotte.  Should I interpret this data to mean that these other cities are just far more desirable cities experiencing much more torrid growth than Charlotte?

Here is the growth rates from 2010 to 2019 of some of the above mentioned metros:

Austin MSA:    # 1  -  29.8%   

Raleigh MSA:   #2  -  23%

Charlotte MSA:  Tie #10  - 17.5%

Nashville MSA:  Tie #10 - 17.5%

Denver MSA:   #12 - 16.7%

Raleigh also has an higher average income than Charlotte metro.  All real estate is local and while we have a severe shortage and low supply of home here some metros are even worse off.   with lumber prices cratering in the past month hopefully homebuilding will pick up more here as builders have throttled back due to higher commodity prices.  The demand is there but they are limiting how many homes they build until they can get a handle on their own costs and some component shortages.  Charlotte metro is one of the top 10 fastest big metro areas in the country and nothing has changed with that.  Yesterday I saw a moving truck from Brooklyn merging on to 277 undoubtedly just delivering another persons belongings to their new home in Charlotte. 

[KJHburg]

in this study of new jobs created and new building permits Charlotte is doing okay but we still need more housing in this area.

Notice the areas creating lots of jobs but not as much housing. 

 

[RANYC]

5 hours ago, KJHburg said:

in this study of new jobs created and new building permits Charlotte is doing okay but we still need more housing in this area.

Notice the areas creating lots of jobs but not as much housing. 

 

we seem to be top-ranked in housing keeping up with jobs.  Austin and Denver kicking out butt

[KJHburg]

1 minute ago, RANYC said:

we seem to be top-ranked in housing keeping up with jobs.  Austin and Denver kicking out butt

Austin is the fastest growing large metro in the country but Denver is larger than Charlotte metro 2.9 M vs 2.6 M and is actually growing at  slightly less rate than Charlotte! 

 

[go_vertical]

On 7/4/2021 at 4:18 PM, KJHburg said:

Here is the growth rates from 2010 to 2019 of some of the above mentioned metros:

Austin MSA:    # 1  -  29.8%   

Raleigh MSA:   #2  -  23%

Charlotte MSA:  Tie #10  - 17.5%

Nashville MSA:  Tie #10 - 17.5%

Denver MSA:   #12 - 16.7%

I'm actually happy we're not seeing Austin-level growth here. Charlotte has what I feel is a brisk but still (mostly) manageable pace of growth especially since it has slightly decreased from a decade or so ago. I kind of imagine what Austin is experiencing being like a Fortnight bus flying overhead everyday with people clutching luggage parachuting out and frantically running around looking for leasing offices upon landing. 

[KJHburg]

This is interesting about Charlotte and average lot sizes.  Lot sizes have definitely shrunk in Charlotte here of late but I question the lot sizes back in the 1970s unless that was the entire metro area.  The lot size now they report seems correct to me.   Most newer homes in Charlotte area are even built on smaller lots now.   My grandparents when they lived in Thomasboro area did have almost an acre in the city in the 1970s and that lot is still that big with the current owner.  Providence Plantation has always had big lot sizes too as did many older neighborhood.  But their figure now seems correct to me. 

Lot Sizes And Home Sizes In Top 20 Biggest US Cities (storagecafe.com)

totally unrelated to lot size but construction costs are still high look at this report from Hoar.

Mid-Year Construction Industry Outlook - Hoar Construction

Edited July 15, 2021 by KJHburg

[KJHburg]

Maybe this thread should be renamed " Who is Going to Build Charlotte out of this Shortage"  I wish all those condos were built back in 2008/2009 now. 

Charlotte has one of the worst housing deficits among the top 50 metro areas

Housing Shortage Hotspots Across The United States | DeedClaim   check out the cities with the biggest surpluses of houses hint not here in NC! 

 

20 Cities With the Most Severe Housing Shortages | Realtor Magazine

[KJHburg]

this is another reason of low inventory of homes for sale in the Charlotte area   investors snapping them up backed by Wall Street.  I know some sellers are starting to buck these cash buyers and selling to individual owner occupants.  

Market    No. of homes bought by investors    Value of homes bought by investors    Share of purchased homes bought by investors    YOY change in number of homes bought by investors
Phoenix    6,889    $4.1B    24.5%    176.6%
Miami    2,640    $2.64B    24.2%    91.3%
Atlanta    6,203    $1.95B    23.6.%    140.2%
Charlotte, North Carolina    2,493  number of homes bought,    $782.1M  total value, ,   22.8%  share bought by investors   135% year over year change in number of homes bought 
Las Vegas    3,043    $1.5B    22.8%    279.4%
Jacksonville, Florida    1,819    $513.7M    22.8%    163.6%
Detroit    1,018    $104M    19.6%    119.4%
Orlando, Florida    2,313    $734.1M    18.6%    170.8%
San Francisco    735    $2.3B    18.6%    107.6%
Tampa, Florida    3,802    $1.26B    18.6%    152.8%
San Diego    2,091    $2.92B    18.5%    109.5%
Philadelphia    831    $181.1M    17.8%    49.5%

 

from an article in the Biz Journal

""During the Great Recession, Wall Street firms amassed foreclosure properties with the purpose of renting them out, institutionalizing a single-family rental sector that historically has been comprised of small-scale landlords.  Institutional investment in the single-family market is making headlines again as major capital sources throw their weight behind a booming housing market and bet on substantial rent growth in many U.S. cities. Life insurance companies, hedge funds and other major capital sources are buying in.  Canada-based Tricon Residential Inc., for example, earlier this month said it was forming a $5 billion joint venture with the Teacher Retirement System of Texas, Pacific Life Insurance Co. and another, undisclosed global investor. The $5 billion venture will acquire more than 18,000 single-family rental homes across the country.  Real estate investors (not just institutional) purchased 67,943 U.S. homes in the second quarter of 2021, the highest quarterly figure on record, according to a new report by Seattle-based Redfin Corp. That's up 15.1% from Q1.""

Institutional investors may grab bigger share of single-family rental market as smaller-scale landlords look for an exit - Charlotte Business Journal (bizjournals.com)

[DMann]

Anyone have any thoughts about apartment to condo conversions that could happen?

[Blue_Devil]

Honestly, there should be ten condo towers going up in South End right now. Even if they are mixed use luxury type things. Durham is building Condos all over.... Durham. There is no reason we cant have One City Center type high-rises with a rental/condo mix, or more 5 store boutique condo projects. We just need more density. 

[RANYC]

57 minutes ago, KJHburg said:

this is another reason of low inventory of homes for sale in the Charlotte area   investors snapping them up backed by Wall Street.  I know some sellers are starting to buck these cash buyers and selling to individual owner occupants.  

Market    No. of homes bought by investors    Value of homes bought by investors    Share of purchased homes bought by investors    YOY change in number of homes bought by investors
Phoenix    6,889    $4.1B    24.5%    176.6%
Miami    2,640    $2.64B    24.2%    91.3%
Atlanta    6,203    $1.95B    23.6.%    140.2%
Charlotte, North Carolina    2,493  number of homes bought,    $782.1M  total value, ,   22.8%  share bought by investors   135% year over year change in number of homes bought 
Las Vegas    3,043    $1.5B    22.8%    279.4%
Jacksonville, Florida    1,819    $513.7M    22.8%    163.6%
Detroit    1,018    $104M    19.6%    119.4%
Orlando, Florida    2,313    $734.1M    18.6%    170.8%
San Francisco    735    $2.3B    18.6%    107.6%
Tampa, Florida    3,802    $1.26B    18.6%    152.8%
San Diego    2,091    $2.92B    18.5%    109.5%
Philadelphia    831    $181.1M    17.8%    49.5%

 

from an article in the Biz Journal

""During the Great Recession, Wall Street firms amassed foreclosure properties with the purpose of renting them out, institutionalizing a single-family rental sector that historically has been comprised of small-scale landlords.  Institutional investment in the single-family market is making headlines again as major capital sources throw their weight behind a booming housing market and bet on substantial rent growth in many U.S. cities. Life insurance companies, hedge funds and other major capital sources are buying in.  Canada-based Tricon Residential Inc., for example, earlier this month said it was forming a $5 billion joint venture with the Teacher Retirement System of Texas, Pacific Life Insurance Co. and another, undisclosed global investor. The $5 billion venture will acquire more than 18,000 single-family rental homes across the country.  Real estate investors (not just institutional) purchased 67,943 U.S. homes in the second quarter of 2021, the highest quarterly figure on record, according to a new report by Seattle-based Redfin Corp. That's up 15.1% from Q1.""

Institutional investors may grab bigger share of single-family rental market as smaller-scale landlords look for an exit - Charlotte Business Journal (bizjournals.com)

After years of income inequality, with wealth concentrated in fewer and fewer hands, will we now see big pools of institutional money buying and holding God’s original capital - land - making it increasingly scarce, bidding up its price by extraordinary measures, and forcing a growing share of people to never set their sights on property ownership - but to instead be perennial renters?  Their rental obligations then become sources of income streams that can be securitized into financial instruments for the portfolios of these institutional pools.

Edited August 2, 2021 by RANYC