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

[KJHburg]

1 hour ago, DMann said:

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

Usually this is happening I am not sure why it would not with interest rates so low and inventory of condos low.   It shows it is just very profitable to rent and apartment owners don't want to sell individually when they can sell the whole complex for big bucks. 

 

One more thing individual sellers are finding out investors are not a protected class in Fair Housing meaning you dont have to sell to them no matter what they offer and usually they are not the highest but close to it and come up with a list during the due diligence period of repairs they think you need to do and want you to lower the price.  People here in Charlotte are wising up to their ways.  

 

Edited August 2, 2021 by KJHburg

[KJHburg]

from twitter UNCC Urban Institute and remember median is the halfway point half below half above.  Average price is slightly higher. 

 

[t_money]

19 hours ago, DMann said:

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

 

18 hours ago, KJHburg said:

Usually this is happening I am not sure why it would not with interest rates so low and inventory of condos low.   It shows it is just very profitable to rent and apartment owners don't want to sell individually when they can sell the whole complex for big bucks.

If business' are buying up all the homes to make them rentals, why would a business sell their rentals to make them homes? Seems counter-intuitive.

Wouldn't an investor just buy a bunch of those conversions and rent them out again?!?

[KJHburg]

1 minute ago, t_money said:

 

If business' are buying up all the homes to make them rentals, why would a business sell their rentals to make them homes? Seems counter-intuitive.

Wouldn't an investor just buy a bunch of those conversions and rent them out again?!?

Some individual investors local people who own rentals are selling their properties to some of these big investment companies to cash out at high prices.  Some rental property owners do want to sell to individual owner occupants  too and what I am saying there is more and more people who want to give the first time buyer or owner occupants a chance since the money is the same in the end and some of these big investment companies are ruthless to deal with.  For example I had a friend sell a home and at the last minute last day of the due diligence period this huge investment company came up with a trumped up list of things needed to be done to the house and wanted thousands of dollars off.  My seller called their bluff and settled for 25% of what they wanted.  These investment companies wait to the last minute to ask for discounts for "repairs" so they can almost force the seller to take their offer.  But people are wising up to this practice.  In most cases individual owners will pay as much if not more as the investors even with the fact they are getting a loan.  

[KJHburg]

actual new condo building in NoDa called the Galleries @NoDa     one of the very few under 800K to $1 M in the Charlotte area being built. 

 

 

[atlrvr]

16 years since originally planned, but coming along...

[rancenc]

Some pricey condos coming to the Eastover area!!

https://charlotte.axios.com/267964/32-luxury-condos-coming-to-eastover-priced-up-to-3-5m/?fbclid=IwAR3VZTrFrepgo9NlH2YhuPpxoYB47v-uxiGd7ThMrvlCCgIVDPWijfLGz70

[KJHburg]

General real estate market comment.  Nationwide multiple offers on properties for sale is starting to decrease and this is good news.

Here are 3 examples I know of recently in the last 2 months.  Home in University area priced 370s got 4 offers.  Home priced in the same range in Fort Mill got 3 offers.   Home priced in the 270s in Concord got 30 offers! 

However in Charlotte about 70% of the properties have multiple offers but that is down from 79% but this is from Redfin and might not reflect the whole market.

Fewer Bidding Wars May Open Door to Some Buyers | Realtor Magazine

still very competitive but signs of easing of the super hot market have been spotted and yes I have seen some price reductions on some homes whereas 6 months ago I saw very few. 

[KJHburg]

wow Charlotte really jumping up in the apartment construction.   Looks like the number of new units this year will be a record but look at the last few years.

Despite Challenges, 2021 Apartment Construction Tops 330,000 for 5th Consecutive Year - RENTCafé rental blog (rentcafe.com)

""Next is Charlotte. With 10,723 projected new apartments, it’s also one of the few metros that are set to beat their own construction records. What’s more, the metropolitan area not only recovered from its poor 2020 performance, but it’s also on track to seeing higher numbers than in recent years.""

[RANYC]

9 hours ago, KJHburg said:

wow Charlotte really jumping up in the apartment construction.   Looks like the number of new units this year will be a record but look at the last few years.

Despite Challenges, 2021 Apartment Construction Tops 330,000 for 5th Consecutive Year - RENTCafé rental blog (rentcafe.com)

""Next is Charlotte. With 10,723 projected new apartments, it’s also one of the few metros that are set to beat their own construction records. What’s more, the metropolitan area not only recovered from its poor 2020 performance, but it’s also on track to seeing higher numbers than in recent years.""

Charlotte punching way above its weight in apartment construction.

[KJHburg]

This is interesting look at what the average downpayment is for house or townhome or condo in Charlotte vs our median income.  Charlotte comes in very close to Nashville slighter worse that Raleigh which has higher incomes and Atlanta.   But then look at the California metro areas and see even with higher median incomes what it takes for the average downpayment.  (NYC too) In the race for talent it is harder and harder to attract people to those big coastal expensive cities and that is why you see a constant stream of companies coming out of California and NYC  to cheaper locales.  Imagine making $114K in San Fran and trying to buy a home condo or whatever there.

Buyers Are Bringing Supersized Down Payments | Realtor Magazine

[KJHburg]

I do believe adding to supply of apartments does not raise market rents as this article states.  However we do need more less frill apartments and not everyone on earth needs granite countertops they just need a safe clean up to date apartment.  Basic apartments are okay too.

How luxury apartment buildings help low-income renters (fullstackeconomics.com)

Preserving Naturally Occuring affordable housing NOAH is important too  almost as important as building new affordable housing. 

[Hushpuppy321]

Stunning just how fast the Lease Up is going for the Ellis in First Ward.  I know it's been mentioned on that Thread (The Ellis) but my questions are;  what is driving such fast Lease Up (especially in little old 1st Ward), Do you think Lennar would venture to build another project in 1st Ward if they are fully Leased within the next Year, Do you think other National Tier High -Rise Apartments\Apartment Developers will take note of the Ellis' Lease Up Velocity and take the plunge into the Charlotte Market?

Edited September 28, 2021 by Hushpuppy321

[CLT2014]

1 hour ago, Hushpuppy321 said:

Stunning just how fast the Lease Up is going for the Ellis in First Ward.  I know it's been mentioned on that Thread (The Ellis) but my questions are;  what is driving such fast Lease Up (especially in little old 1st Ward), Do you think Lennar would venture to build another project in 1st Ward if they are fully Leased within the next Year, Do you think other National Tier High -Rise Apartments\Apartment Developers will take note of the Ellis' Lease Up Velocity and take the plunge into the Charlotte Market?

It could be the "relative" value of the units. The Ellis is brand new and you can get in a high rise for less than some other buildings that are also newer. If you want skyscraper living, the rent is a comparative bargain. Also 2 months free rent in high rise section.

1 bedroom, high rise:
The Ellis: Starting at $1,509
The Ascent: Starting at $2,101
Uptown 550: Starting at $1,838
The Francis: Starting at $1,748

2 bedroom, high rise:
The Ellis: Starting at $2,290
The Ascent: Starting at $2,731
Uptown 550: Starting at $2,877
The Francis: Starting at $2,773

Edited September 28, 2021 by CLT2014

[kermit]

^ and the Charlotte rental market is VERY tight at the moment. (based on a friend staying with us while they look for a rental, not the vacancy stats)

[SouthendSnoop]

^ atleast in southend, the prices are sky rocketing these past couple months. If you charge a “reasonable” rate, it’s beyond easy to get tenants now and that’s probably how people see the Ellis. I’m truly wondering if the demand for Charlotte is that high or if the system is going to topple eventually. 

[CLT2014]

25 minutes ago, SouthendSnoop said:

^ atleast in southend, the prices are sky rocketing these past couple months. If you charge a “reasonable” rate, it’s beyond easy to get tenants now and that’s probably how people see the Ellis. I’m truly wondering if the demand for Charlotte is that high or if the system is going to topple eventually. 

Per this list, our median rent for a 1 bedroom is now in the top 25% and tied with Austin at $1,440. We have become one of the most expensive places to rent in the Southeast, especially when you exclude Florida. https://www.zumper.com/blog/rental-price-data/

Most expensive rent in Southeast:
Miami: $1,970
Fort Lauderdale: $1,740
Atlanta, GA: $1,640
St Petersburg, FL: $1,470
Austin, TX: $1,440
Charlotte: $1,440

[Blue_Devil]

3 hours ago, CLT2014 said:

Per this list, our median rent for a 1 bedroom is now in the top 25% and tied with Austin at $1,440. We have become one of the most expensive places to rent in the Southeast, especially when you exclude Florida. https://www.zumper.com/blog/rental-price-data/

Most expensive rent in Southeast:
Miami: $1,970
Fort Lauderdale: $1,740
Atlanta, GA: $1,640
St Petersburg, FL: $1,470
Austin, TX: $1,440
Charlotte: $1,440

With the low amount of inventory, especially around the city center, and basically one full Texas Donut worth of people moving here per week, this is to be expected. We need a lot more highrise apartments. 

[JHart]

3 hours ago, CLT2014 said:

We have become one of the most expensive places to rent in the Southeast, especially when you exclude Florida.

I mean, yeah? What other major cities do you expect to be more expensive? Outside of Atlanta and Florida we are clearly the largest city in the Southeast. 

[KJHburg]

This is an interesting study by Fannie Mae.  New development of apartments even high rise upper price range  apartments helps affordability by providing supply.

    Do New Housing Units Next Door Raise Your Rents? | Fannie Mae

[KJHburg]

Homeownership is the main way most people gain wealth.  (that is why all these big investors buying up starter homes delays the wealth creation)

anyway check out how Charlotte does

https://magazine.realtor/daily-news/2022/01/11/owners-average-225k-in-housing-wealth-over-decade

[KJHburg]

General end of year stats from Canopy Realtors group on the Median sales price in the various counties and cities in the metro area.  This includes both condos and single family homes. I highlighted major counties and facts. 

2017 2018 2019 2020 2021
Change
From 2020   first percentage 
Change
From 2017    2nd percentage 

                                       2017            2018             2019         2020                2021     % change     1st number from 2020   2nd number from 2017 is the last column. 

Charlotte Region $224,900 $238,000 $255,000 $280,000 $325,180 + 16.1% + 44.6%
Alexander County $147,750 $151,000 $166,250 $199,900 $217,000 + 8.6% + 46.9%
Anson County $79,500 $102,500 $111,750 $124,900 $135,000 + 8.1% + 69.8%
Cabarrus County $205,000 $224,900 $245,000 $267,900 $319,700 + 19.3% + 56.0%
Charlotte MSA $230,000 $244,000 $260,000 $287,500 $335,000 + 16.5% + 45.7%
City of Charlotte $225,000 $237,500 $257,000 $285,000 $340,000 + 19.3% + 51.1%
Concord $204,000 $222,630 $244,000 $270,800 $315,000 + 16.3% + 54.4%
Cornelius $275,000 $294,900 $306,500 $332,000 $399,000 + 20.2% + 45.1%
Davidson $324,000 $375,000 $367,500 $415,000 $514,500 + 24.0% + 58.8%
Denver $334,000 $331,330 $346,000 $358,500 $395,000 + 10.2% + 18.3%
Fort Mill $299,000 $323,500 $315,000 $340,000 $394,109 + 15.9% + 31.8%
Gaston County $164,990 $180,000 $190,000 $217,000 $260,000 + 19.8% + 57.6%
Gastonia $155,000 $165,000 $175,000 $200,000 $243,000 + 21.5% + 56.8%
Huntersville $296,465 $314,500 $320,000 $348,000 $407,750 + 17.2% + 37.5%
Iredell County $244,000 $254,900 $268,890 $295,000 $340,000 + 15.3% + 39.3%
Kannapolis $133,360 $151,650 $164,200 $185,450 $240,000 + 29.4% + 80.0%
Lake Norman $375,994 $385,333 $380,500 $420,000 $460,000 + 9.5% + 22.3%
Lake Wylie $327,000 $354,681 $349,900 $375,000 $442,003 + 17.9% + 35.2%
Lancaster County $268,000 $279,000 $300,000 $325,000 $365,000 + 12.3% + 36.2%
Lincoln County $255,000 $267,500 $283,875 $310,000 $348,026 + 12.3% + 36.5%
Lincolnton $155,500 $164,000 $185,000 $200,700 $245,000 + 22.1% + 57.6%
Matthews $278,250 $295,000 $310,000 $330,000 $385,000 + 16.7% + 38.4%
Mecklenburg County $239,900 $252,000 $270,000 $300,000 $355,000 + 18.3% + 48.0%
Monroe $186,000 $205,000 $229,000 $250,000 $310,000 + 24.0% + 66.7%
Montgomery County $120,000 $132,000 $135,000 $176,200 $161,750 - 8.2% + 34.8%
Mooresville $287,000 $299,903 $304,950 $335,000 $377,500 + 12.7% + 31.5%
Rock Hill $185,500 $195,000 $213,313 $235,000 $270,000 + 14.9% + 45.6%
Rowan County $134,000 $145,000 $161,250 $190,000 $222,000 + 16.8% + 65.7%
Salisbury $143,000 $149,000 $163,000 $191,500 $218,000 + 13.8% + 52.4%
Stanly County $144,990 $155,000 $183,445 $190,000 $225,000 + 18.4% + 55.2%
Statesville $154,000 $166,450 $185,000 $203,000 $241,050 + 18.7% + 56.5%
Union County $284,855 $300,000 $305,000 $334,900 $378,900 + 13.1% + 33.0%
Uptown Charlotte $284,000 $279,000 $295,500 $281,000 $340,000 + 21.0% + 19.7%
Waxhaw $382,000 $394,450 $384,245 $419,900 $495,000 + 17.9% + 29.6%
York County $244,000 $255,000 $268,000 $289,000 $326,100 + 12.8% + 33.6%

Notice how the more affordable counties and cities are the fastest appreciating since 2017 like Kannapolis, Gaston county etc. 

[KJHburg]

Stats and summary of the Charlotte metro real estate market from Canopy and there are cracks in the market starting to show (mainly due to much higher interest rates and low inventory and buyer fatigue)   Highlights are mine.   Interest rates were below 3% in Feb. of this year and now averaging about 5.4% which significantly affects affordability.  However even at that rate they are below historical norms of the last few decades. 

""May 18, 2022
CHARLOTTE, N.C.— Home sales across the Charlotte region slipped again in April, declining 10.8 percent year-over-year, with 4,420 homes sold throughout the 16-county region. Last spring, as sales heated up and nearly surpassed 5,000 home sales, there were 534 more homes sold during the month of April 2021 than this past April. Month-over-month sales are down 2.2 percent compared to March 2022, as rising mortgage rates that climbed to 5.4 percent by the end of April, continue to constrain the spring market.

Housing statistics included in this report are completed transactions that include single-family and condo/townhomes only, according to data from Canopy MLS.

Pending sales, were also down, signaling yet a fourth month of year-over-year declines, as buyers, weary of rising prices, continue to pull back from the market. Contract activity declined 4 percent year-over-year as 4,993 homes went under contract during the month.  The continued decline in contract activity means weaker sales in the coming months. April’s contract activity increased by 1 percent, when compared to contract activity in March 2022. 

Seller confidence in the market is somewhat mixed, as sellers listed 5,744 homes for sale, which is nearly the same level of new listing activity that the market saw in April 2021. New listings were down 1.5 percent year-over-year but are up 9.3 percent when compared to new listing activity in March 2022. 

2022 Association/Canopy MLS President Lee Allen said, “I believe as we see inflation continue to put pressure on day-to-day expenses, like groceries and gas, buyers are finding less income available to spend on housing. First-time buyers especially are feeling the squeeze, as inflation and rising rates force them to make tough decisions.” 

According to the National Association of Realtors® approximately 3 million renter households aged 25-40 years old, already spend 50 percent of their income on rents, which will make it even more challenging to save for future down payments. 

Allen continued, “As Realtors®, we continue to work to be ‘at the table’ with policymakers and leaders at both the local and national levels, offering innovative solutions to help increase affordability. We are excited to see inventory starting to rise, but continue to feel the pressures of increased interest rates and double-digit price increases.” 

Canopy reported in February and March that inventory and supply held steady at about 15 days of supply. However, from March 2022 to April 2022, 713 homes were added to inventory, an increase of 29 percent month-over-month, increasing months of supply to 21 days of supply. 

Inventory across the 16-county market is still critically low, with a little over 3,100 homes for sale at report time. A year ago, in April 2021 there were more than 4,200 homes for sale across the region. 

Low inventory will continue to pressure prices, as it did in April. The median sales price ($380,000) and the average sales price ($449,581) rose 20.6 percent and 18.7 percent year-over-year respectively, while the average list price rose 17.7 percent year-over-year to $488,069. The original list price to sales price ratio registered 102.8 percent, showing sellers in the region receiving well over asking prices for their homes during the month of April. 

Buyers will continue to see homes selling almost as quickly as they are listed, as the average number of days a property was on market from the time it was listed until it closed (list to close) fell to 68 days compared to 75 days in April 2022. Days on market, the metric that accrues for “Active” and “Under Contract-show” statuses, averaged 16 days, which is even faster than April 2021 when homes averaged 21 days on market until sale.

Canopy Realtor® Association provides monthly reports on residential real estate market activity for the Charlotte region based on data from Canopy MLS. The Charlotte region, which this report is based on, includes 12 counties in North Carolina and four counties in South Carolina. 

For more residential-housing market statistics, visit www.CarolinaHome.com and click on “Market Data.” For an interview with 2022 Association/Canopy MLS President Lee Allen, Realtor®/Broker-in-charge with RE/MAX Executive, please contact Kim Walker.

The Canopy Realtor® Association is a trade association that provides its more than 16,000 Realtor® members with the resources and services they need to conduct ethical, professional, successful and profitable businesses. ""

sometimes a graphic shows it better

[KJHburg]

who is going to rent all these apartments?  well Charlotte named of the one best markets for prices in relation to income, supply, how many new units etc.

https://www.rentcafe.com/blog/rental-market/market-snapshots/best-cities-for-renters-in-2022/

of course this does not mean we dont need more affordable apartments and we need to preserve our NOAH units. 

[SydneycartonII]