The Vue

[ElricSeven]

...which would be the exact opposite of 210 Trade.

I remember early on in the process a lot of folks on here doubting whether 210 was going to happen due to the slow process.

Let things work themselves out...these are incredibly complex projects that have to cross numerous hurdles before they get out of the ground.

I'm still feeling really good about the Vue happening and would be surprised if we don't see construction by the fall.

Yeah, I think maybe our sentiment swings a bit too wildly around here. People were so positive before and then freaked when I suggested there was some risk that the project would not occur based on how closed-mouthed they were about progress. Now, we see some plans on their part to have an escape hatch. I hardly think that means the project is dead, it just slides the scale a little bit in the negative direction. 210 Trade looks to be 99% sure and the Vue has slipped a bit in my mind to perhaps 80% sure.

Edited June 12, 2006 by ElricSeven

[monsoon]

Well actually I did ask the question if Charlotte could support not one but 2 50+ story luxury condo towers being built at the same time. (there is a thread here on it) And this on top of a number of other announcements in the 15-35 story range.

[Dale]

But there does not appear to be a demand issue here. Just permitting issues.

[monsoon]

But there does not appear to be a demand issue here. Just permitting issues.

Well I am not so sure. The Park and the Arlington are testimates to that.

[Dale]

Well I am not so sure. The Park and the Arlington are testimates to that.

Not all will prosper in the best of times. I am simply suggesting that, unless the developers of VUE are lying about their preselling requirements being met, then the Charlotte market is indeed strong enough to support two 50+ story condos, and that VUE may or may not fail due to other factors.

[Charlotte_native]

But there does not appear to be a demand issue here. Just permitting issues.

I don't think there are straight up demand issues here at all, but issues based on unusual marketing, numbers held so close that no one really knows how many are actually pre-sold except the sales team, cloudy marketing where agents can't get a real availability list or price list (nor does the website have this), and heavy competition that does not come with all this secrecy. Combine that with higher than typical earnest money requirements (10% down -- most projects are around 5% and they will be holding this AT LEAST 2 years +) and a building that hasn't been started. If you cough up 10% of a $700,000 unit, your $70,000 will be held for quite some time -- and no dates to begin or end are reliable at this point. Combine all those and you are outside actual demand issues but comparison issues with other projects that hurt demand.

I think The Park and The Garrison have contributed to some hesitancy from potential buyers since many folks have had thier earnest monies held indefinitely *years* by these projects problems that have prevented them from getting started.

In comparison with The Avenue --- they start their projects early so there will be no lack of confidence of the buyers as to time-frames, start dates, or whether it will actually get done -- they broke ground PRIOR to sales.

[Dale]

I'm just sorry to hear that there is a lack of trust connected with this project. Their Orlando venture went swimmingly.

[ElricSeven]

I'm just sorry to hear that there is a lack of trust connected with this project. Their Orlando venture went swimmingly.

Yeah, but the condo boom is starting to die down. I just got an e-mail from an agent I know in Myrtle who said it is now a buyer's market out there due to all the construction being completed.

And as a side note, it would be healthier overall if the projectst that are mispriced, poorly placed or lacking sufficient appeal were to never happen. It wouldn't be very healthy to have the bottom fall out all of sudden. Keep up steady momentum over twenty years would be more preferable to a four year boom and then 16 years of people too frightened to buy.

Edited June 12, 2006 by ElricSeven

[Dale]

Yeah, but the condo boom is starting to die down. I just got an e-mail from an agent I know in Myrtle who said it is now a buyer's market out there due to all the construction being completed.

And as a side note, it would be healthier overall if the projectst that are mispriced, poorly placed or lacking sufficient appeal were to never happen. It wouldn't be very healthy to have the bottom fall out all of sudden. Keep up steady momentum over twenty years would be more preferable to a four year boom and then 16 years of people too frightened to buy.

Good for Charlotte if the market favors the buyer.

And I doubt that the bottom will fall out. Your more moderate scenario is much more likely I should think.

Also factor in the historic nature of the current boom, with the reversal of urban-flight and so forth.

[ElricSeven]

Good for Charlotte if the market favors the buyer.

And I doubt that the bottom will fall out. Your more moderate scenario is much more likely I should think.

Also factor in the historic nature of the current boom, with the reversal of urban-flight and so forth.

I concur that the more moderate scenario is the most likely, especially if, as we're seeing, the marginal projects drop by the wayside.

[monsoon]

Yeah, but the condo boom is starting to die down. I just got an e-mail from an agent I know in Myrtle who said it is now a buyer's market out there due to all the construction being completed.

Yeah, the market in Myrtle Beach is 75% property investors if not more. It's a bit of a different situation there as a huge number of condos there are purchased solely to be rented out. If you have a place on the waterfront and manage to rent it out the 12 weeks of the summer season, you can easily make a year's worth of payments from that. Anything else is gravy. I would say that 20% are retirement homes and the other 5% are just people wanting to live there. Myrtle Beach/NMB only has a population of about 50,000 people but has more highrises (using the emporius definition) than Charlotte.

So, the fact that condo growth is dying down in that market is a sure sign that investor money is drying up, even here in the Carolinas. It will be interesting to see how much of that might affect all of the projects announced for Charlotte.

[Dale]

I concur that the more moderate scenario is the most likely, especially if, as we're seeing, the marginal projects drop by the wayside.

I like your scenario with the lesser projects dropping and the major projects moving ahead. Here in Orlando there are increasing questions about the strength of the CBD market. Yet, the high-profile projects seem to all be moving ahead, with certain of the less glamorous projects raising questions.

I think we'd all be happy to know that, after out cities skylines are radically transformed in 2-3 years, that we'd see one or two snazzy projects a year after that.

Edited June 12, 2006 by Dale

[Charlotte_native]

And as a side note, it would be healthier overall if the projectst that are mispriced, poorly placed or lacking sufficient appeal were to never happen. It wouldn't be very healthy to have the bottom fall out all of sudden. Keep up steady momentum over twenty years would be more preferable to a four year boom and then 16 years of people too frightened to buy.

wouldn't this be considered a market correcting inself in an open market?

[Charlotte_native]

Wow. Just had lunch with someone that recently looked at The Vue -- I didn't realize they actually want a whopping 20% down. I might understand a high requirement if you had to make it at or just before breaking ground, but that is a huge amount of money for something that has an open-ended start and finish date. I was amazed. She was looking at a $600,000 unit and would absolutely NOT give $120,000 for at least 2 -- 3 years hoping it would get started.

[krazeeboi]

Yeah, the market in Myrtle Beach is 75% property investors if not more.

Now I'm not the sharpest knife in the drawer when it comes to real estate, but I do know that's a very high figure. Wow.

[ElricSeven]

Now I'm not the sharpest knife in the drawer when it comes to real estate, but I do know that's a very high figure. Wow.

Yeah, but they've got a really high rate of rentals. Most of the population is transient at the beach. Now whether or not they can realize sufficient return on investment to justify what they paid on the condo is another story.

[sleightofhand]

Wow. Just had lunch with someone that recently looked at The Vue -- I didn't realize they actually want a whopping 20% down. I might understand a high requirement if you had to make it at or just before breaking ground, but that is a huge amount of money for something that has an open-ended start and finish date. I was amazed. She was looking at a $600,000 unit and would absolutely NOT give $120,000 for at least 2 -- 3 years hoping it would get started.

This isn't right.

The Vue requires 5% down now and then another 5% when they break ground. If the unit is over $600,000 then you are required 5% now and then another 10% once they break ground.

[Charlotte_native]

This isn't right.

The Vue requires 5% down now and then another 5% when they break ground. If the unit is over $600,000 then you are required 5% now and then another 10% once they break ground.

If so I am glad to be corrected, just passing on what I was told.

[Richhamleigh, DC]

Wow. Just had lunch with someone that recently looked at The Vue -- I didn't realize they actually want a whopping 20% down. I might understand a high requirement if you had to make it at or just before breaking ground, but that is a huge amount of money for something that has an open-ended start and finish date. I was amazed. She was looking at a $600,000 unit and would absolutely NOT give $120,000 for at least 2 -- 3 years hoping it would get started.

Which is a good point...how many people want to buy something sight-unseen? I wonder if they would sell-out if the building were actually under construction or just finished and people could actually touch/see walls?

[Charlotte_native]

Which is a good point...how many people want to buy something sight-unseen? I wonder if they would sell-out if the building were actually under construction or just finished and people could actually touch/see walls?

Selling finished would always work but few developers can do that financially -- lender want to see pre-sales. Now if ground were broken it might be an easier sell, that is what The Avenue does for that very reason. You don't have to wonder when and if the project will start, Novare breaks ground before marketing.

[atlrvr]

It makes you wonder, would the developer be willing to front some cash to get earthmoving equipment on the site and digging as a sign of commitment.

Obviously, the Vue has announced enough pre-sells that they don't need to do this, but it could be a way to accelerate sells.

On the flip side, many developers prefer to not have as many pre-sells, because they can typically raise the price of units once it is under construction.....the risk is gone for the buyer, so they pay more.

[Charlotte_native]

It makes you wonder, would the developer be willing to front some cash to get earthmoving equipment on the site and digging as a sign of commitment.

Obviously, the Vue has announced enough pre-sells that they don't need to do this, but it could be a way to accelerate sells.

On the flip side, many developers prefer to not have as many pre-sells, because they can typically raise the price of units once it is under construction.....the risk is gone for the buyer, so they pay more.

I think they will need to finish buying the land before they can break ground. Plus they have announced enough pre-sales, but not many people believe it and they won't let anyone see a sales or availability sheet to demonstrate how many are actually under contract.

[rockhilljames]

I'm amazed they don't own all the land yet. How can you expect to get a fair price on the land when the owners know you need it?

To me that might be this project's biggest hurdle...

[sleightofhand]

On the flip side, many developers prefer to not have as many pre-sells, because they can typically raise the price of units once it is under construction.....the risk is gone for the buyer, so they pay more.

Very good point. This way the developer makes more money instead of selling out early and not having the chance to raise prices.

[ElricSeven]

Very good point. This way the developer makes more money instead of selling out early and not having the chance to raise prices.

At the prices these units are going for, I'm not sure that the developer would be making a good gamble that prices will be going up.