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


monsoon

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Basically Archer Daniel Midlands and their mill is saying we don't want a bunch of townhomes this close to our facility where there is noise 24/7  and I dont blame them.  They know these home buyers will complain non stop  even though this mill has been there.  I had someone looking at one of the condos at Fourth Ward square and she asked me if that noise was going away.  I told her probably not anytime soon and she looked elsewhere.  Surely  Lennar  can find another site that is not next to an industrial facility that is probably not moving anytime soon.  They are at the junction of 2 major highways and 2 crossing railroads why would they move?   If they the developer wins the rezoning  ADM should erect a banner on the side of the storage silos that says this is a 24 hour 7 day operation that makes noise just to let you know.   Not to mention so close to active heavily used freight lines.  

https://charlottenc.gov/planning/Rezoning/RezoningPetitions/2021Petitions/Pages/2021-238.aspx

https://charlottenc.gov/planning/Rezoning/RezoningPetitions/2021Petitions/Documents/Community_Meeting_Reports/2021_238_CMR.pdf   page 32 look at the townhomes location compared to ADM 

Edited by KJHburg
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In the 1800's with the age of steam and coal steam engines, expensive homes were never by the rail line. The shower of sparks from the locomotive stack and the smoke from the boiler firebox meant there was fire risk and soot as a constant companion. The vibration of passing trains made a less than solid structure subject to premature failure. Modern diesel electrics have reduced the first risk but the second is still an issue. Plus the noise which can be a thrum resonating throughout the structure not including the train horn, the clang of cars clattering over rail connections, and all the rest. In the childhood of my parents time no one bragged about living by the railroad.

 

edit typos

Edited by tarhoosier
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CONDO news yes this is about Condos being built albeit pricey ones in Myers Park.

""John Tammaro, owner and CEO of Simonini Homes, said high demand for luxury living prompted the company to build more upscale condos in Myers Park. Construction is slated to begin on Echelon on Queens in the second quarter of 2023. The project, which includes a gated parking deck, totals 73,792 square feet and is expected to cost about $22.4 million.   Echelon will include 17 two- and-three-bedroom condos that range from 2,029 to 2,537 square feet. The units are priced starting at $1.5 million. Two top-floor penthouses, spanning more than 4,500 square feet, will have three bedrooms, three-and-a-half bathrooms and include additional amenities like a study, an expansive balcony, a chef’s kitchen and a wine cellar.  This isn't Simonini's first luxury project in Myers Park. Construction on 1500 Queens, a 14-condo project at the corner of Queens Road and Pembroke Avenue, began in October 2020 and is expected to deliver in the next eight to 10 months. Tammaro said it was the high demand there that made the decision to build Echelon an easy one.""

https://www.bizjournals.com/charlotte/news/2022/06/10/simonini-homes-myers-park-luxury-condos-housing.html

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What’s the likelihood of those condos by the boardwalks in the university being developed someday? I know those have been there forever, but I feel like that this will be a super prime spot someday with the current revamp of the area and proximity to jw light rail station. Just a thought, possibility nothing will happen. 
C0501605-43D4-4CC2-BB7B-7194AE0C824A.thumb.jpeg.12ec296af9f9bf00b79b9ebd357ea9dd.jpeg

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20 minutes ago, CharlotteWkndBuzz said:

What’s the likelihood of those condos by the boardwalks in the university being developed someday? I know those have been there forever, but I feel like that this will be a super prime spot someday with the current revamp of the area and proximity to jw light rail station. Just a thought, possibility nothing will happen. 
 

I would say highly unlikely.  Given individual  ownership of condos it is hard to put together an assemblage like that but the Trianon in southpark has done it.  But I would say don't hold your breath. 

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Charlotte ranks in the top 5 nationally in new home construction per capita and in the top 10 of cities with the most apartments per capita being built. 

More supply of SF homes and townhomes and rental apartments helps with affordability.

https://investors.redfin.com/news-events/press-releases/detail/727/redfin-reports-austin-raleigh-and-other-popular-sun-belt

Raleigh is #2 per capita in new home builds

https://www.redfin.com/news/metros-building-new-construction-Q1-2022/

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  • 2 weeks later...
17 minutes ago, Hushpuppy321 said:

Year over Year Rental Lease Price increases being passed onto Charlotte Area Renters is just sick.  100 to 200$ per month Rent Increases are totally ridiculous but I fear are being done because of the strong In Migration of Renters to the region.

Unfortunately that is happening in most of our peer cities Raleigh Nashville Atlanta Florida cities.   I do believe this will moderate in the next year because of the national economy. 

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  • 2 weeks later...

Investors still some of the biggest buyers of homes in this area from this 1Q 2022 data.  I do think this will be slowing down as the year goes on. 

These investors are pushing aside owner occupant buyers and more neighborhoods are putting rental restriction in like wait a year after buying a home and then you can rent away.   Covers the owner occupant who needs to sell but maybe the market is not good and they could rent.  Berewick has a newly enforced policy only one rental investment home per purchaser.  That means big corporate owners not welcome.  

From the Biz Journal

""Investors were responsible for 32.2% of home purchases in the Charlotte market during the first quarter of 2022, according to the Redfin study. That's down 19.1% over the quarter but up 44.4% over the year. In the first quarter of 2021, investor purchases here made up a 23.1% share. Local homes purchased by investors during the first quarter of 2022 had a median price of $306,000 and totaled $1.15 billion in value.  Of the markets included in the study, Charlotte logged the third-highest percentage of investor-purchased homes in the first quarter of this year, following Atlanta, with a 33.1% share, and Jacksonville, Florida, with a 32.3% share.""

https://www.bizjournals.com/charlotte/news/2022/07/05/housing-market-investor-activity-q1-2022.html

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who is going to rent all these apartments?  this should lower rent increases with so much new supply.  

from the Charlotte Ledger this morning:

""Building boom: Charlotte has a record number of apartments under construction
You’re not imagining things: There really are a lot of apartments being built in Charlotte.

In fact, there are more apartments in Charlotte under construction now than at any time in the city’s history, according to a new report from real estate data service CoStar.

Figures from CoStar show that there were nearly 20,000 apartments in Charlotte under construction in the 2Q of this year — the equivalent of more than 10% of all the apartments in the city. Apartments are going up all over the place, but the biggest concentration is in … drum roll … South End, which has more than 2,000 under construction at the moment.

New starts slowing, rents moderating: Demand, though, seems to be cooling off, and groundbreakings have slowed since April, wrote analyst Chuck McShane. But there will still be a ton of apartments coming on the market in the next couple years, which should lead to lower increases in rent.

And by lower, we mean less than the 14%-18% annual increases of the last few quarters. —TM""

 

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28 minutes ago, KJHburg said:

who is going to rent all these apartments?  this should lower rent increases with so much new supply.  

from the Charlotte Ledger this morning:

""Building boom: Charlotte has a record number of apartments under construction
You’re not imagining things: There really are a lot of apartments being built in Charlotte.

In fact, there are more apartments in Charlotte under construction now than at any time in the city’s history, according to a new report from real estate data service CoStar.

Figures from CoStar show that there were nearly 20,000 apartments in Charlotte under construction in the 2Q of this year — the equivalent of more than 10% of all the apartments in the city. Apartments are going up all over the place, but the biggest concentration is in … drum roll … South End, which has more than 2,000 under construction at the moment.

New starts slowing, rents moderating: Demand, though, seems to be cooling off, and groundbreakings have slowed since April, wrote analyst Chuck McShane. But there will still be a ton of apartments coming on the market in the next couple years, which should lead to lower increases in rent.

And by lower, we mean less than the 14%-18% annual increases of the last few quarters. —TM""

 

Last I read, Charlotte need about 12,000 a year to keep up with demand. But the MSA needs 30,000 apartment units. So 20,000 under construction makes sense since they are staggered. 25000 moving into Charlotte metro alone per year. And most are seeking rentals.

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I’d love to know what the annual Single Family Home construction is for Mecklenburg County - seems like Wake County dominates in SFH construction in the State which makes since due to its vast size and available land.  People in CLT do need homes to own though, I guess Townhomes / Triplexes/Quadplexes will be the main thing built in the future since land is not that available in large parts of Mecklenburg.

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First time in 30 years apartment demand went majorly negative.   From Ashley Fahey Charlotte based national real estate writer for the Biz Journals

"""Demand for apartments plummeted in the national apartment market in the third quarter, coming off what had been several quarters of strong run-up in demand and rent growth for the national multifamily market.

In fact, apartment demand turned negative last quarter, the first Q3 in at least 30 years that such a phenomenon occurred, according to RealPage Inc. The summer months are typically strong for the for-sale and rental housing markets, making the Q3 drop in demand this year particularly significant.

Net demand was -82,095 units in Q3 among the markets tracked nationally by RealPage, bringing year-to-date net demand to -47,143 units. Negative demand means more renters moved out of than into apartments during a specified period.

Jay Parsons, head of economics and industry principals for RealPage, in a statement accompanying the report said soft leasing numbers and weak home sales point to low consumer confidence. People tend to go into wait-and-see mode during periods of uncertainty, he also said.

It's possible, too, record rental-rate growth across the U.S. observed in the past 18 months, up until the end of this summer, has more renters doubling up to split the rent.""

RealPage studies the Charlotte market now what is happening here I am not sure.  But with higher interest rates and rents levelling out I would expect apartment construction to slow across the Charlotte metro.  Well financed deals will get built but some of these many apartment towers may not get off the ground right now but will in the future.  

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Follow up to what is posted above.   Rent rapid appreciation is OVER with this news just like the real estate for sale market is seeing softening prices to higher interest rates, apartment rent growth has stalled out.    This might also delay some projects from getting off the ground here in Charlotte as our under construction pipeline of apartments is really strong right now. 

If you rent don't let them raise your rents greatly.  Threaten to move out and see what they come back with then. 

https://www.bisnow.com/national/news/multifamily/rents-declining-nationally-as-uncertainty-hits-renters-purse-strings-115736?

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Currently  ‘Under Construction’ Apartments throughout the City Center is just utterly Staggering.  I took the time to drive through all of the Nooks & Crannies of Center City Charlotte - From the Sugar Creek Station down through the Woodlawn Station (N. CLT to LoSo) and everything in between. (NoDa, OP, PM, Midtown, Gold Dist., SE, LoSo)

Significant Apartment Complex Construction is totally changing the Landscape.  Do you folks think that the High Mortgage Interest Rates now, which is slowing down home sales will actually drive up Rental Occupancy Rates of these Apartments as people rent while waiting for Mortgage Loan Rates to Abate?

 

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3 hours ago, Hushpuppy321 said:

Currently  ‘Under Construction’ Apartments throughout the City Center is just utterly Staggering.  I took the time to drive through all of the Nooks & Crannies of Center City Charlotte - From the Sugar Creek Station down through the Woodlawn Station (N. CLT to LoSo) and everything in between. (NoDa, OP, PM, Midtown, Gold Dist., SE, LoSo)

Significant Apartment Complex Construction is totally changing the Landscape.  Do you folks think that the High Mortgage Interest Rates now, which is slowing down home sales will actually drive up Rental Occupancy Rates of these Apartments as people rent while waiting for Mortgage Loan Rates to Abate?

 

Personally rising rent has pushed me to buying a home even with this increase in interest rates. 

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6 hours ago, Hushpuppy321 said:

Currently  ‘Under Construction’ Apartments throughout the City Center is just utterly Staggering.  I took the time to drive through all of the Nooks & Crannies of Center City Charlotte - From the Sugar Creek Station down through the Woodlawn Station (N. CLT to LoSo) and everything in between. (NoDa, OP, PM, Midtown, Gold Dist., SE, LoSo)

Significant Apartment Complex Construction is totally changing the Landscape.  Do you folks think that the High Mortgage Interest Rates now, which is slowing down home sales will actually drive up Rental Occupancy Rates of these Apartments as people rent while waiting for Mortgage Loan Rates to Abate?

 

It makes home payments higher with rates that have gone up however prices are moderating and sellers are more willing to come off their price and or pay some buyers closing costs.  I am advising all my buyers now that make offers especially if the home has been on the market more than a week.  Time on market is increasing.  The residential market is going back to 2018/2019 where it was a sellers market but not over the top.  The days are OVER  for multiple offers and way over asking price except in rare situations.  What we saw in 2020 to early 2022 is NO MORE spread the word.  Inventory is increasing so there is more out there for sale.    Homes on the market at prices based on what something sold for earlier in the year are now out of date.     The great thing is that even with todays interest rates you are NOT stuck with them for 30 years when rates come back down you can refinance.  

In the short term some may choose rentals over buying for lots of reasons but with high rental prices and cheaply made apartments people still desire to own.   Rental prices are starting to moderate but home prices have been doing so since May.  

Edited by KJHburg
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From Canopy association of Realtors" 

New listings decreased in September, falling 15.8 percent year-over-year as sellers listed 4,676 homes for sale compared to 5,553 listed in September 2021. This is the third month of decline in seller confidence. Seller confidence, as displayed by new listings rose briefly in May and June 2022, helping to boost inventory and supply. The region needs to see consistent listing activity in order to ease inventory challenges. Inventory rose in September, increasing 32.5 percent year-over-year with 7,104 homes for sale at report time, which is 1.6 months of supply.  Months of supply has increased 45.5 percent from 1.1 months in September 2021, to 1.6 months this past month (September 2022).  September represents the fourth consecutive month of year-over-year increases in both inventory and supply. Subtle changes in supply will help to cool price appreciation over time.

 

Prices however continued to rise in September, as both the median sales price ($380,000) and the average sales price ($449,927) rose 13.4 percent and 16.1 percent year-over-year respectively, while the average list price rose 16.6 percent to $472,651. This brought the original list price received to sales price ratio to 97.2 percent.  This metric continues to slowly fall and is down 3.8 percent when compared to September 2021. It was as high as 102.8 percent in May 2022, but has steadily fallen since. This time last year it was 101 percent as sellers received more than asking prices for their homes. Canopy MLS reported that price reductions on active listings have started to increase, which means that buyers could be experiencing some leverage in the market.

Correction from my above post the List price to sales price ratio is 97.2 and was as high as 102.8% in May 2022. 

 

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