Cities With The Biggest Drop In Housing Prices

Cleveland, Minneapolis, Portland, Dallas, Phoenix, Chicago, Boston and Atlanta.

These are the "Big Eight", not really a distinction I would like Charlotte to have.  When you look at these cities, it is a mixture of older cities with less desirable weather, or cities that experienced runaway appreciation which led to the housing crisis by a large degree. 

As you look at the recovery and the number of businesses moving here, both of those reasons, weather and a stable economy, are major factors. 

Will Rising Interest Rates Finally Push Buyers Back Into The Housing Market?

Coupled with the article I entered here on December 13, Forbes is reporting that ironically, it could be rising interest rates that finally push home buyers off the fence and into the market.

While Congress debated the tax-cut compromise, the financial markets have interpreted the proposal as a development that will likely push mortgage interest rates higher than they have been for months.

Analysts are predicting that buyers will move quickly when it looks like rates are going up and are unlikely to come down. "Once people see this might actually be the bottom, they’ll go for it," says Paul Dales of Capital Economics.

The average rate for a 30-year fixed loan increased to 4.61 percent in the week ended Thursday, Dec. 9, from 4.46 percent the previous week. The average 15-year rate rose to 3.96 percent from 3.81 percent.  Rates vary from lender to lender and are also predicated on other issues, so yours may be different from the above.

Have We Passed The Bottom Of The Market?

Statistics are wonderful, they can be used to justify just about anything.  Take this graph for instance.  I have calculated the percentage of annual sales during the last third of each year for 2007 through December 12 2010.  This gives us a look back at the high times of 2007  before the recession took it's toll.

As one would imagine, 2008 was a weak year, and only 15% of the annual sales happened during the last third of the year.  In 2009, the year of the first time home buyer tax credit sales spiked to over 50% for that last third.  The real interesting thing to note is that while 2010 is not yet over, and the first half of this year we had the extension of the tax credit, we have exceeded the number achieved in 2007!

To be sure, we still have a way to go, but when you are trying to find your way you look for signs, and this is a clear sign that the bottom has been hit.

One last thing to support this theory, interest rates are beginning to climb.

Today I Go To Mourn With A Friend

This has nothing to do with Real Estate.

Lynn Weis is a friend of mine.  His wife died on Saturday evening. 

Death is always around, sometimes expected sometimes not.  Mary Weis falls into that last category.  She retired a few years ago and was enjoying her retirement.  My thoughts and prayers are with her.

So, today I go to mourn with Lynn.  I have known Lynn for 11 years and we have worked closely on many neighborhood initiaves.  His presidency of Friends of Fourth Ward was instrumental in my becoming involved.  Lynn is a great manager, politician, and friend.

I have not talked with Lynn since Mary's death.  I am not sure what I will say to him today.  Mary was such a large part of his life. 

Retail In Downtown Charlotte

When many of us think of retail, the thoughts of Miracle on 34th Street is brought to mind, with Macy's and Gimble's huge multi-floor department stores battling each other. Those days are gone for Charlotte. In the past, our versions were Ivey's and Belk's along with others.


During the urban renewal years, many old buildings, both storefronts as well as commercial buildings were torn down in the name of progress. Merchants also changed their models to have preprogrammed stores to plop into a suburban mall full of ample parking. Today's environment has also built parking garages to surround suburban malls.

As I identify trends currently taking place that will affect our property values, I am finding that there is indeed retail in downtown Charlotte, sometimes in plain view, we just don't notice it. The old Ivey's Department Store building, now Ivey's Townhomes, is a living example of thriving retail. Many of us walk by Ivey's everyday without realizing that the second floor has an expanded retail presents (see insert).

Sure. We see the fast food restaurants, along with the secured entrance for the townhomes, but who knew that there was a "Dollar Store" doing a great business on things we all use everyday?

Everything from a barber shop to a chiropractor, and all the spaces are filled.

If you haven't shopped there, stop in when you walk buy. While you won't be walking out with a major department store bag, you will probably have your hands full. Give it a try.

Housings Future

I am copying an article I received from Franklin American Mortgage Company that puts some definition around reasons I believe the market is coming back.  Particularly, while some indicate that current conditions will direct more people to rent vs own, the statistics continue to support ownership.

"The average homeowner has a net worth that is about 41 times greater than that of a renter, according to a report from the National Association of Realtors. Homeowners’ net worth averaged between $150,000 and $200,000 this year, according to NAR. The trade group for Realtors said homeowner equity accounts for a substantial part of that net worth. NAR based its research on results from a 2007 Federal Reserve Survey that provides a snapshot of family income and net worth in conjunction with basic demographic makeup. The Fed survey is conducted once every three years. A 2010 survey has not yet been released. Homeowner net worth back in 2007 was 46 times greater than that of renters, reflecting the economic conditions before housing price declines and a decreasing equities market. The average net worth of a homeowner was above $200,000, while the average net worth of a renter in 2007 was $5,000. Source: HousingWire




Total housing sales in 2010 will be down about 8 percent from last year, and will mark the bottom of the downturn, says a monthly report from Fannie Mae economists. The economic outlook from Fannie Mae is fairly upbeat looking ahead. Foreclosures will keep housing sales subdued in the final quarter of this year, the report says, but sales will see gradual improvement in 2011. “We expect home sales to increase by about 3 percent in 2011, says Fannie Mae (OTC BB: FNMA) chief economist Doug Duncan. “However the pace of the recovery will be largely determined by labor conditions. If hiring improves at a faster pace than expected, home sales will likely see a stronger gain in 2011 and vice-versa.” Improving financial conditions and recent encouraging signs from the labor market should set the stage for an above-par growth trend by mid 2011, the report says. Source: Washington Business Journal



A tougher economy is changing the way people regard housing design. Here are some of the new realities:

• The ideal home size is less than 2,000 square feet, according to Trulia.com.

• Formal living rooms and dining rooms are out; flexible space that can double or triple as home offices,

guest rooms or dens is most appealing.

• Porches are back.

• Energy efficiency trumps everything, with a private wind turbine in the back yard a real winner.

Source: USA Today"

Fifth & Poplar

There is a new listing at Fifth & Poplar that I find quite incredible.  It is on the 7th floor and is a large 2 br 2 ba unit.  It is a Short Sale, and the price is $224,000.  I showed it this morning and was very impressed at the size and finishes that it affords. 

I have mentioned before the great values that are available in this building.  To be sure, the tax value of the property remains high, and the HOA dues are high, and there is a monthly assessment surcharge of around $100 as well.

Despite that, this building is one of the best values in the city.  The amenities, including an interior park of about 1 acre, a swimming pool, a fitness center, a cyber lounge fully equiped, indoor and outdoor fireplace, a patio deck above the Harris Teeter, and of course, it sits on top of a grocery store.  Include with that a 24 hr a day concierge, and a location 2 blocks from the center of town.

Wow!

More On The VUE

The VUE remains the biggest topic in this marketplace. Standing 51 stories tall, and looking front on to the Charlotte skyline it can hardly be missed. But the size is only one of the reasons it is a Big Topic here.


Born in the heady real estate days of the mid 2000’s, it promised to deliver a location, style, and ambiance that would be unsurpassed. Several other towers that were planned or in the works have either never developed (One Charlotte) or have disappeared due to legal and zoning battles (210 Trade Street).

The sale center for The VUE was prominently located at the center of town, on the corner of Trade and Tryon.

Back in the mid 2000’s per square foot pricing downtown was comfortably over $300, and in the case of Fifth and Poplar, The VUE’s next door neighbor, the prices were well over $350. A natural progression of value would have pushed the pricing levels to somewhere between $450—$500. Initially, all sales were handled internally by the developer. Several times during the sale cycle, changes were made to the staff. Some of the contracts that were written were done directly by that team, with the team acting as a Dual Agent, meaning representing both sides of the transaction.

Those of you who have purchased new from a developer will recall that the contract you signed was written specifically to cover the developer in almost every instance, only the 7 day right of rescission remained.

The VUE is complete now, just work on interior finishes or build out’s. Closings began in September, and of this writing, two units have closed.

Contract holders have received notices to set their closing, and they are finding that the appraised value of the property, that is the number that a lender gauges the amount of a loan they are willing to give, is coming in anywhere between 15% to 35% below the contract price. Faced with not being able to secure a loan for the balance of their purchase price, they will need to bring additional dollars to the closing.

The developer is sticking with the contracts in hand and can sue for non performance if the buyers do not close. Courts have upheld contracts when a buyer has the means to close.

There are no mulligan's in real estate. When you make a purchase make sure you have proper representation going in.

Foreclosure Myths Explained

Go to this article to read about common myths regarding Foreclosures.  It is important also to note that foreclosure is a process, and not a tangible thing.  This means that when you see the word "Foreclosure" it is referring to the process.

Today's market is providing plenty of opportunities to purchase at significantly below the market value.  It is unfortunate, but it is the market we are in.

Ahead Of My TIme?

The article I have linked here discusses the potential beginnings of a trend away from car ownership.  The article talks of many reasons for not owning a car, but the best reason can be found in the last paragraph.  It appears these generation "Y"'s are realizing that they can best allocate the assets they have in other directions.

Way Cool Transit Information

Go here:

http://toddata.cnt.org/

Register (it is free) at this site and you will have the ability to get an incredible amount of information on existing and proposed transit stations in terms of population and median income.  How do they know this stuff???

Here in Charlotte, you can select the station (example: Seventh Street Station), and find out how many residents or jobs are within .5 miles, or .25 miles. So you can compare which stations are most TOD friendly with real numbers. You can also do this for future lines in Charlotte.

Could The VUE Consider This?

Before I get into this, please note that this is just pure speculation.  I have not talked to any potential owners, and I have not talked to the developer or the sales team for The VUE.

That said, please go to this article:  Equity Sharing  It might be a vehicle that would allow someone to close on this property without the developer having to make pricing adjustments from the contract price to meet the current appraisal value.

In this situation, again this is just unsupported conjecture, a unit which went under contract for $1,000,000 with a $150,000 down payment might only appraise for $800,000.  A lender would in most cases only provide financing for $640,000, leaving a shortfall of $210,000.  The developer might choose to do an Equity Sharing agreement, taking that $210,000 as part ownership in the property. 

If as the developer says, the property will increase in value as we climb out of this recession, the developer may stand to make more long term profits on the property, if not, the developer will stand to recoup the investment upon the sale of the property. 

Sale prices will be maintained for appraisal value, and mortgages will be able to be obtained.

Not a perfect situation, but food for thought on a sunny October morning.

Freezing Foreclosure Action?

1. What is robo-signing and what all the fuss is about? The phrase robo-signing refers to what we’re now realizing has been a very common practice in the banks’ foreclosure document processing divisions, where one person was essentially given the job of signing as many 10,000 foreclosure documents per month, by hand. These individuals were supposed to be reviewing the files, making sure grounds for foreclosure actually existed, signing the docs in front of notaries. But because of the volume of documents, what they actually did was just sign thousands of documents at a time, without even reading them, and ship them off somewhere else to be notarized.


If you do the math on an 8 hour workday, you'll see that that only gives the staffer 1.5 minute to review each file and documents to make sure the foreclosure is warranted. That's not humanly possible, which is how these staffers got the nickname “robo-signers”

Government regulators are very concerned that the banks may have been taking people's homes without following the proper legal procedures. As a result, 40 states' attorneys general are teaming up to launch a multi-state investigation, and the federal Comptroller of the Currency and federal attorney general may also get involved in investigating this issue.

2. Will the freeze will make the banks cancel buyer contracts on REO properties? Currently, the freeze impacts bank-owned properties that are owned and/or serviced by Ally Financial/GMAC Mortgage, JP Morgan Chase, and some properties that were owned by Bank of America. Generally, contracts to buy these homes are being put on hold and extended for 30 days. As well, the banks are often reaching out directly to buyers and offering them the option to cancel their contracts and recoup their deposit money.

3. Is it safe to buy a foreclosed home? There's lots of talk right now about the "clouds" that this scandal will create on the titles to homes that were foreclosed by the banks' foreclosure mills. And that makes sense: if the home wasn't properly foreclosed on in the first place, then the legitimacy of the bank's resale can be called into question. Normally, don't worry about it, buyer - that's why you'll get title insurance! But last week, 3 of America's largest title company insurers declared that they will not offer title insurance on a number of the homes that may have been involved in this scandal.

In the vast majority of cases – when the foreclosure was justified and a bona fide purchaser, someone who was not involved in the bank’s wrongdoing, has purchased the home, courts will not reverse these foreclosures or their sale to buyers. But if you’re in the market for a foreclosure, get clear on which bank owns the place as soon as you can, and run the property past your title insurer before you get too far into the transaction to make sure they can write a policy of title insurance on the property before you spend too much money on inspections and appraisals.

4. How the foreclosure freeze will impact American home values, say after you buy. In the short term, these freezes might cause prices to stabilize, as we expect to see the supply of foreclosures for sale start to shrink. However, if these freezes stretch out for a long period of time, they could simply be delaying many inevitable foreclosures, which could delay the recovery of the housing market and home prices, over time.

Fifth & Poplar Moves Distressed Properties

Fifth & Poplar located in the Fourth Ward has always been a wonderful location. The interior park is peaceful, and well maintained. An apartment conversion project, it sold out during the peak of the market back in 2005 - 2006. It was not uncommon to see square foot prices as high as $385!

Back then, lenders were both lending, and being creative with the types of loans available. Balloon mortgages were frequently the mortgage of choice, and many others got a mortgage and a second mortgage basically putting nothing down.

The beauty of this property was that it was chocked full of amenities, everything from a great pool, to a doggie park, to a concierge, etc. These things all cost money, and the HOA dues, based on square footage, was in the upper $300 range.

Due to maintanence issues and needing to develop a legal fund to potentially pay for legal action against the builder, the HOA fees have been increased by around $110 per unit per month! Yikes.

The recession cost many their jobs, or lead to transfers out of the city. As the market went down, the balloon payments became due, further strapping the abilty of some owners to meet their obligations. Foreclosure activity and Short Sales began to be the norm.

I have shown the building many times, and there are significant deals and values to be had there. The good news is that it is beginning to work. Since July 1, five (5) properties have sold, and another six (6) have gone under contract. The average selling price is under $200,000, and the average $ per square foot is at $200!

There are still properties available, and I would love to help you to secure one if you are motivated. Call me.

Interesting Times At The VUE

There have been some rumors going around that some of the people who have contracts to purchase at The VUE were considering walking away from their investment. There is a blog VueCharlotteBuyersBlog that has reported much of this, and describes the difficult wavering that some are experiencing.

There was a post on that blog from the developer MCL which links to a court order on a different property ruling in favor of the developer and instructing the buyer to go through with the purchase of the unit they contracted for.

Court Order

Stay tuned, more to come!

Urban Market!

Can't say this is a surprise!

Press release:
Charlotte Center City Partners is exploring the creation of a new public market in Uptown to be located in the former Reid’s Fine Foods space on the ground floor of the Seventh Street Station parking deck. Carolinas HealthCare System (CHS) has offered to invest in this new market because of the project’s potential benefits for the citizens of our region.

The proposed ‘City Market’, situated adjacent to the 7th Street light rail station, would feature high quality, unique products sold at reasonable prices. Produce and products from local farmers and vendors would support public health by providing year-round access to fresh foods. The vendor mix is proposed to be multicultural and represent Charlotte’s global melting pot as well as its Southern heritage. The market would include a café and provide programming opportunities for the community to learn about healthy eating in a warm and inviting setting, surrounded by fresh foods.

“Our goal will be to provide a wide variety of produce, meat, fish, bakery and dairy products, and other raw and prepared food, brought to market in the center of the city by farmers, growers, producers and chefs,” said Michael Smith, President and CEO of Charlotte Center City Partners. “We want to create an environment that recognizes and celebrates the diversity of our citizens and fosters their interaction. We also want to strengthen the historic link and mutual dependency of our rural and urban communities.”

The market will take advantage of its Uptown location and the City’s unique assets including the light rail line, the new UNC Charlotte building and First Ward Park across the street as well as Johnson & Wales University.

Another objective will be to provide an incubator for small businesses, supported by the workforce development programs at CPCC. In time, this market will become a ‘must see’ destination and provide an authentic Charlotte experience for visitors. The hope is to achieve all this and, at the same time, make sure the market is operationally self-funded.

As founding sponsor, CHS would provide health and wellness programming for the market. “We want to invest in the City Market because it supports our mission of ‘Live Well Carolinas’ and our goal of prevention and wellness in the Charlotte community,” said CEO Michael Tarwater.

This concept is the result of years of research and exploration through a partnership with the City, County and Projects for Public Spaces (PPS). In a recently completed feasibility study report, PPS surveyed local market vendors and found a high-capacity, skilled set of vendors who know and understand retail marketing. The survey found that 75% of vendors have a strong interest in participating in a year-round indoor market and that 75% employ 0-3 full-time employees and more than 60% of vendors would be ready to sell in less than three months.

The City Market is proposed to be a stand-alone 501(c) 3 organization employing a Market Manager and Assistant Manager as well as custodial staff. The projected opening is Spring of 2011.

Reid's Nearing A Retail Location Decision

Just got this on 9/9/2010:

BIG NEWS
Be on the look out for an announcement within the next
2 WEEKS regarding
information about our future retail location.

We should know something by the end of the month!

Conflicting Housing Price News

Funny thing about housing news, it changes radically from month to month. One month you hear that the average price has dropped X%, the next month, it is up Y%. Then you hear that new home sales have dropped dramatically.
What to believe?
Let’s look at some of the statistics behind the numbers. When congress enacted the First Time Home Buyers Tax credit, it created a market of guess what, First Time Homebuyers! These people were looking for inexpensive, affordable homes that would fit into their budget. These homes generally were at the entry level of housing prices, so the average price of a home was driven down. This does not mean that other houses were not selling, but that the unit sales were skewed by the tax credit.
When the credit ended, and the unit sales in that entry level price range fell back, the average price of a home went up.
As to new home sales dropping, well, building permits for the past 24 months have fallen significantly, and banks have been more reluctant to extend loans to builders, so with fewer homes being built, it stands to reason that fewer are being sold. This does not address demand, but supply.
My point here is that if we respond to information without a frame of reference to it, we become part of the panic that just feeds the problem. We are in difficult times, but not impossible times. The demand for housing still exists, though slower than several years ago. Sellers are taking a more realistic view of the value of their property and prices are not as speculative.
Companies continue to move to Charlotte and the long term future looks good here. There will be bumps along the way, but don’t succumb to panic.

The Saga Of The VUE Continues

It was early in March of 2005 when Doug Smith broke the story of The VUE Charlotte, and the enormous size of the project. Wow! 50 stories, spires on top, biometric sensors to read your thumb print instead of using fobs, glass walls with incredible views of a rapidly growing city with construction cranes everywhere.
At the time of the announcement, the market was riding pretty high and continued through 2007.



Irrational Exuberance? Those were heady times, and no one was crying out to reign in the economy. The fall of the economy has been well documented everywhere else, so I won’t go there.
The topic of the day as reported in the Business Journal and the Observer is that some people with contracts on The VUE are giving consideration from walking away from their down payment as opposed to buying a property that has had an erosion of value since the initial commitment.
Had the economy not dropped the way it did, sales per square foot could be between $400—$450 on average for all downtown. If that were the case, the building itself, its location, and the uniqueness of the amenities might be enough to justify some overpaying.
But that is not the case. 2010 to date $ SqFt is near 2004 levels at $220. % of Asking Price is running around 79%.
There is no question that The VUE will be a unique address probably for the next 5 to 10 years, and that may be enough, but current buyers will need to make some hard decisions, as will the developer. Stay tuned.

Sellers, Price Your Home With The Market

It is not uncommon for a seller to want to list the asking price of their home somewhat higher figuring that it will give them a little “wiggle room” when a buyer makes an offer. In a seller’s market, that strategy might work but not in todays market.
The Wall Street Journal has published an article describing that in this Internet Marketing era, most buyers will shop what is fresh, and new listings get four (4) times the hits during the first week of the listing than the remainder of the time on market. Even an eventual price drop by a seller only gets a modest increase in activity.
When a buyer sees that a property has been on the market a long time (over 60 days) they assume that it is either priced too high and the seller is not willing to negotiate, or there is a property has some other problem that stands in the way of its sale.
The article draws no direct conclusion, but implies that to price a property that reflects current marketing conditions will lead to a quicker sale. As I tell all my clients, you can turn down an offer you don’t like, but you cannot negotiate on an offer you do not get.

Morgan Stanley News?

Morgan Stanley has hired 100 bankers to offer loans and deposit products to brokerage clients. The unit will be run by former Wachovia Corporation Executive and may quintuple its ranks by the end of 2011. This is a direct attempt to form a "private bank" (as opposed to a retail bank) that is based in Charlotte and New York.
This is a continuing expansion of the financial services sector of our Charlotte economy.

Kitchen Upgrades

This article gives more indications of current trends for those considering remodeling.

KITCHEN-DESIGN TRENDS
Counter tops: Stainless steel, antiqued marble, lava stone, wood, concrete, mosaics and flamed granite with a textured, matte finish.

Cabinetry: Fewer overhead cabinets. Lift-up or sliding doors, self-closing drawers, glass-fronted cabinets and glass shelving, tracks inside doors for attaching storage accessories, pantires with multiple storage options. Fresh finishes, from smooth, high-gloss and matte lacquer, to textured, horizontal-grain laminates.

Appliances: Free-standing accent pieces and fully-integrated designs that blend with cabinets. Fridges with more crisper space, less freezer space; combination gas/electric ranges; designer range hoods; super-quiet dishwashers; specialty sink faucets; luxury items such as warmer drawers for coffee mugs.

Lighting: Combinations of soft incandescent, bright halogen and cool, energy-efficient LED bulbs.

Colors: Warm neutrals such as walnut, slate, sand, greige, celadon and magnolia.

Architectural elements: Wall niches and bump-outs for housing coffee machines, juicers, dinnerware, herbs, spices and collectibles.

Upgrades to your home

Some months back in my newsletter, "The Marsoun Report" I commented on how people are seeking more contemporary settings for a potential purchase as opposed to more traditional settings.

I was discussing this with a friend over the weekend, and we kind of surmised that a good rule of thumb is to plan for about a 1% annual contribution for the updating of a home.

Therefore, a house costing $250,000 should plan to reinvest about $2,500 a year in upgrades. That amount in any one year may not seem like alot, but when you consider every 4 years it is a $10,000 improvement, it starts to make sense. Couple that with the ability to enjoy the upgrades while living there and it makes even more sense.

The potential benefit of this reinvestment will be a higher resale value when the home is put back on the market. So sharpen your pencils, and make plans to get on the upgrade train.

Amelie's on Tryon

Amelie's French Bakery, a unique and exceedingly popular NoDa spot open 24 hours a day will be taking the spot formerly held by Dilworth Coffee in the Chamber of Commerce Building located on the corner of MLK Jr. Blvd and South Tryon by the Wells Fargo campus. The lease was signed today.

Work will commence immediately for a planned opening by the end of August, sooner if possible. Because the space is only 800 sq ft, it will not have all the ambiance that the NoDa location has. Also, because of zoning and licensing issues, food will not be prepared on site, but carted from NoDa. Who cares, it is all good.

Hours of Operation are planned to be 6:30 am - 6:30 pm Mon - Fri and 9 to 4 on Sat. Closed Sundays.

Charlotte - Raleigh Rail Traffic Up

The article below was in the Charlotte Business Journal, and should be titled "If you make it more convenient, they will ride!"

The new mid-day trains between Raleigh and Charlotte boosted rail travel on Amtrak’s Piedmont line by more than 200 percent during June.

Ridership on trains between North Carolina’s two largest cities climbed from 5,258 in June 2009, to 15,426 in June 2010. Amtrak officials credit the surge to the new mid-day trains, which started running June 5. The new service added two more trains to the four already running. Three of the trains run from Raleigh to Charlotte; the others run from Charlotte to Raleigh.

“The additional trains in the mid-day have given business travelers, families and college students more options to travel via rail,” said State Transportation Secretary Gene Conti. “Ridership gains show when more trains are offered, more travelers will ride.”

The new service, which takes just over three hours to complete and includes stops in Cary, Durham, Burlington, Greensboro, High Point, Salisbury and Kannapolis, is expected to attract 43,000 riders in its first year.

The news comes as Amtrak’s overall train ridership in North Carolina is climbing. For the period of October through June, ridership overall jumped 26 percent, with 65,956 people riding the rails so far this year compared to 52,347 during the same period a year ago.

Wine Tasting At The Dunhill

I didn’t think it would take too long to find another spot to keep our weekly Wednesday wine tastings, and a likely candidate has been found.
Following quickly on a story in the Charlotte Observer about the Dunhill Hotel becoming a great “Boutique Hotel”, Craig Spitzer, the General Manager, has agreed to carrying on the tradition started by Reid’s.
This past Wednesday was our first attempt and it appears that not only did we enjoy it, but The Dunhill enjoyed it as well, so for the next several weeks we will continue to meet there.

Ongoing Thoughts about The VUE

As we are now in July, we are probably between 30 and 60 days of the first scheduled closings in
The VUE.
It has been a long road for this project to get to this point. The developer has changed, the sales team has changed several times, there has been a walk off by the general contractor and there have been zoning concerns on several fronts.
This project was borne back in 2005, just as the downtown condo market was entering into its high point. Fifth and Poplar was nearing selling out at a rate of $345—$375 a square foot, and plans for additional developments or actual cranes were to be found everywhere downtown.
Everything seemed to be lining up for The VUE. One of the most unique concept was the inclusion of bio scanners to use fingerprint identification instead of fobs! Those of us who use fobs on a regular basis can attest that a thumb print is a lot cooler, and you always have it with you. The finishes promised to be unsurpassed in the city, and the views were all good, even over the “Green Expanse”, that is Elmwood-Pinewood Cemetery to the rest of us.
The developer insists that there is somewhere around 60% of the units under contract. That would equate to around 240 units. Many of those units sold are tentatively cash sales. It will change the nature of the lower Fourth Ward.
Some owners have expressed concerns that property appraisals may be difficult to justify the sales price. This remains to be seen as no appraisals have taken place.
This will truly be an interesting transition from a large work in progress to an occupied condominium, the tallest in North Carolina.

Positive Signs

As the recession starts to recede (not fast enough!) Charlotte continues to enjoy announcements of companies relocating, or expanding jobs in this market. The exciting thing is that not all of them are in the financial industry.
Last fall we learned of Husqvarna, Seimens, and Ally Bank. This spring we learned about Freightliner, Red Cross, Jo-Mar Spinning, Citco Funds, Morgan Stanley, USBank, Babcocks & Wilcox.
Several contacts I have in City of Charlotte Economic Development have hinted that there are others in the pipeline as we move forward.
Wells Fargo’s community banking president for the eastern region, Laura Schulte, has indicated that the overlap of duplicate jobs is done, and that there are actually people in San Francisco who are eager to move to Charlotte from the West Coast! Who would have thought that!
These are all positive signs that Charlotte will emerge from this recession stronger, as our core businesses are again expanding and we are diversifying our employment base to help avoid future dependence on a single industry.
Additional expansion is taking place with the UNCC Uptown Classroom Building, continued growth of Johnson & Wales University, and discussions about Johnson C. Smith creating a High School on its campus.
All these indicators will bring additional people to this area. These people will need a place to live, and I have already seen buyers are returning to the markets. Property values will begin to rise as the financially challenged properties are removed from the market.
As the supply of available housing decreases, and the demand of people moving to this area increases the only course is for property values to go up

Wow! It is really gone!

A friend of mine pulled me aside in early May and asked me if I had heard anything of Reid's closing their doors. I was shocked, and told him that I had not, but would find out.

I asked Pam Richards if what I heard was true, and she confirmed that it was.

Slowly the word got out, and we began the countdown. It was not initially apparent, but slowly the shelves started thinning out. Then the wine racks became threadbare. People who no one ever saw before began to shop there and commented on how nice it was, and what a shame it was it was closing! Where were they before?

The plan was to close on Saturday, June 26 at 8pm. I planned my day to be on hand for the official locking of the doors. I didn't want to get there too early, so I planned my arrival for around 6:30. I found a hand-written sign on the door that the store was closing at 5!

It's been about 10 days now, and oil is still leaking in the gulf, we're still in Afghanastan, the market is still crazy, and life goes on. I have rediscovered evening aerobic classes, and in general am getting more work done during the day.

There will never be another place quite like Reid's.

What About Home Improvements?

In my May Newsletter, The Marsoun Report, I wrote that buyers are increasingly looking for more updated living space. Traditional space is becoming less attractive in comparison to Contemporary space. Plantation Shutters are less attractive as compared to Blinds that can be raised or lowered. Stainless Steel appliances are almost a requirement. More upscale brands, Bosch, Thermador, SubZero, Viking are becoming the norm.

Many people who read my Newsletter have commented to me about that situation.

The truth is that many of us (excluding me) will purchase a car every 3 or 4 years, spending upwards of $25,000 on an asset that immediately begins to depreciate, while we maintain the same home for almost twice that time. Upgrading your property will usually will appreciate the value of the property. Additionally, you will have the benefit of those upgrades.

Reid's Will Exit Seventh Street Station

When I decided to move downtown in 1998, one of my concerns was where will I buy my groceries. Fortunately, that is when Reid’s opened the Seventh Street Station store. It hardly seems like 12 years!
Effective June 30, 2010, Reid’s will no longer anchor the corner of the parking garage, they have elected to not renew their lease. Talk about a shocker!
Selling real estate in downtown Charlotte was made somewhat easier because of the special attention that Reid’s gave its customers; home delivery; special orders; house accounts; best meat department in the city; bakery and catering; excellent wine selection and a convenient wine bar. The uniqueness of these services made Reid’s stand out amongst many competitors.
More than these services was the friendly nature of the employees. Each time I walked into Reid’s I was greeted by everyone from whoever was sweeping the floor (sometimes the owner) to Chuck and Pam Richards. These are probably stories that each of us could repeat as Reid’s touched us all. I often felt as though I spent more time at Reid’s than at home.
Weekend cooking classes became very popular, and Heidi Billotto would always fill all the seats. Reid’s would offer the students a 10% discount the day of the cooking class, always a very popular reason for taking the classes.
The wine bar itself became a regular stopping place for people waiting for traffic to die down before heading home. The Wednesday and Friday wine tastings allowed me to market myself as a realtor and still enjoy the friendship and camaraderie of the patrons, and of course, the great wines that were offered.
Special cooking tips from Bucky or Mac helped me to become a better cook as well.
All this changes on June 30, 2010.
My first inclination was to try to fight the change, start a grass roots movement to keep things going the way that they have for the past 12 years, but that does not seem to be a possibility. Reid’s is not planning to disappear, but reinvent itself. All things are changing, the way we read books, the way we get our news, the way we look for phone numbers, how we bank (anyone still have a passbook?), and grocery shopping is also changing. The plan is to relocate in an area that will allow the business model to produce a profit for the company. One thing that will not be affected by this change will be the gift business, gifting@reids.com. In these times, those who can change and adapt will succeed, those who cannot, will not!
Pam and Chuck are concerned for their employees, many who have been part of the Reid’s family for generations. Other locations are being considered, and while the size of the store may change, the customer service will not as many of their employees will continue on.
Let’s make these last two months something special for Reid’s and all of us.

Molly McPhersons Will Occupy "Big Daddy's"

New restaurants are beginnig to open. The Observer had an article on Sunday 4/11/10 talking about Jim Nobles new restaurant called "Kings Kitchen", and promises of a version of "Roosters" downtown by the end of the year.
Another planned opening by another group is Molly MacPherson's. "Our plans are to welcome you to our newest pub early July 2010! We are planning to take the space formerly occupied by Daddy's American Bar & Grill on the corner of W. 5th and N. Church. We hope it will become your new favorite place to hang, grab some delicious food, and enjoy a drink or three."
With Ri Ra's and Connolly's just up Fifth Street, we will have plenty of places to watch soccer on the big screen!

Signs Of A Turnaround

We have all been looking for positive signs that the economy has changed enough to feel better about our property values. Well, the 1st Quarter may have brought that to us.
The enclosed chart shows the sales history for 2009 vs 2010. During the 1st Quarter of 2009, only 8 properties were sold compared to 20 properties in 2010.
The size of the units sold in 2010 represents about a 10% increase in size, and an equal increase in average sale price.
An encouraging fact is that properties are selling at closer to the original asking price.
To be sure, some of the property sold represents foreclosures, short sales, or other repressed pricing from prior years. These sales are a necessary part of an “inventory clearance” process, not unlike what you might find in a department store at the end of a season. The sooner these properties are gone, the sooner we can return to a normal selling environment.
The good news is that Buyers are returning to the market. I have had a significant uptick in showings on my listings, even those listings that are labeled either contingent or conditional! This is also reflective of Sellers taking an aggressive view of the value of their property based on the current market conditions. The chart above shows that Sellers are getting 95% of their asking price, while the average $ per square foot has gone down. Clearly this is a market driven change. This market condition will not assume the same type of 6%—8% appreciation of prior years.

The New Urban Century

This picture was taken from the intersection at Seventh and Tryon. It is a prime examples of what Michael Smith is talking about in an article published in the April 1st edition of CNN Living.
The picture is the recently completed renovation of St. Peters Episcopal Church with the looming presence of The VUE Charlotte behind it. The contrast of the 108 year old building and the still unfinished VUE speaks volumes to Charlotte being willing to keep what is good, and add to it.
If you look the other way from this intersection, you will see the rising structural support beams for the UNCC Uptown Classroom Building. It is about 3 floors from completion, and the visual impact that it is having on the city is incredible.
I believe that much like the changes that have taken place since BankofAmerica created the Gateway Village area, UNCC will pull development towards it, further expanding downtown Charlotte, and increasing property values along the way
"As you look at the cities that are going to thrive in the next century, there's a belief that we're entering the urban century," says Michael Smith in an article in USAToday. "There's a new urbanism that's not about cul-de-sacs or expressways. It's sidewalks, bike paths and parks." "We're creating infrastructure for human beings, rather than automobiles."

First Ward Park To Follow UNCC Classroom Building

Construction is scheduled to start this fall on a 4.5 acre-lot on Brevard Street between East Seventh and Ninth streets, said Daniel Levine, president of Levine Properties, which will pay the up-front costs of the $9.6 million construction project.

With restaurants and other attractions planned nearby in later phases, the park ultimately could draw visitors from more distant communities along the light rail line, Levine said.

"We're going to make it a great urban neighborhood," Levine said. "In 30 years, we hope to have Charlotte's equivalent of (New York's) Greenwich Village."

Levine Properties is moving forward with plans for the first phase of a 22-acre mixed-use development in First Ward. Long-term plans call for residences, offices and retail businesses such as restaurants and shops and possibly a hotel.

First Ward Park is part of a partnership between Levine, UNC Charlotte, Mecklenburg County and the city of Charlotte. Park and Recreation was gathering feedback this week on the park's master plan.

Crews will level off the drop in elevation at Eighth and Brevard. Construction also will begin on an underground parking deck with an entrance on East Ninth Street.

Crews also will begin work on a new section of 10th Street and on Market Street, a new street that will run parallel to the proposed light-rail extension.

The area closer to Seventh Street and ImaginOn will have features for children, including two fountains where they can play in the water. That side of the park also will have a lawn that can seat about 4,000 people for concerts or other activities.

Most of the park north of Eighth will be built above the underground parking deck. The proximity to UNC Charlotte's classrooms led to a design for a more serene space, with a reflecting pond.

The Art Of Short Sales

I was fortunate enough to be featured in an article in the April edition of Charlotte Magazine concerning Short Sales.

These type of sales are becoming more common as some owners are faced with declining values, and a need to stop the debt burden. Short Sales have a reputation of being diffuclue and time consuming, but I have found that understanding the requirements of the financial institution, and patience in organizing and dissemination the necessary documentation is the key.

New High End Development To Hit The Market

For many years, it was just known as the Clock Tower, the empty space between the two hotels in the Second Ward. Slowly, the space in the middle was developed into 26high end condos, noted for their attention to detail.

The developer will be bringing these units to market shortly, and with only 26 units in the building, they will immediately make an impact on the market.

Thanks for the notice!

I was interviewed a while ago for the March issue of the Charlotte Magazine regarding a "Short Sale" that I conducted in 400 North Church Street. The article contains most of the details. The important thing here is that these "Short Sales" are becoming an important part of the current real estate environment.

Since that sale, I have become involved in several other opportunities to do "Short Sales" and have become the defacto subject matter expert at Center City Realty.

This is a changing market, and flexibility is key in being successful either as a buyer, seller, or realtor.

Is Your Agent Working In YOUR Best Interest?

There is a real estate firm town (not Center City Realty) that, as a policy, pays its’ agents more per transaction if they sell one of the firms own transactions. In some cases, the agent may receive twice as much if they sell one of the firm’s listings than if they were to sell one of a Keller Williams agent as an example. As a buyer, this should concern you as it does me.

As a buyer, I would be concerned the agent I just hired may only show the listings that benefit them financially the most instead of the best options to fit my needs. Maybe they are showing all the listings but being more persuasive towards the ones that pay more over others.

During the home search phase of the buying process, the agent’s role is to provide perspective and information to assist the buyer in making their own decision. As a home buyer looking to hire a real estate agent, ask them directly if they there are properties that they are being incentivised to show and sell you.

As a matter of practice, when a "realtor bonus" is being offered, I forward that to the buyer.

What do you think?

Will Growth Continue On North Tryon?

As an owner in ChapelWatch, it is somewhat discouraging to note the deterioration of property values in the building. This is especially true when compared to The Ratcliffe located on South Tryon near the Wachovia Cultural Campus. Since 2007, there have been 15 sales in The Ratcliffe, and 2 sales in ChapelWatch. The average dollars per square foot for The Ratcliffe has averaged $385, while ChapelWatch has averaged $338. I should also note that there have been no sales in ChapelWatch since 2007.
The product is similar, both buildings are well constructed and well appointed, so then, why is there such a difference?
ChapelWatch is in what many consider to be the premier neighborhood, the Fourth Ward. There is truly a feeling of being in a neighborhood. The Ratcliffe on the other hand is clearly in an urban environment, Overstreet Mall connections all the way to the Hearst Tower.
ChapelWatch sits at the end of the current downtown expansion, whereas The Ratcliffe sits clearly in the center of it. With the Betchler Museum of Modern Art, the Knight Theatre of Performing Arts, and the soon to be completed Mint Museum, not to mention the NASCAR Hall of Fame, South Tryon is awash in activity.
ChapelWatch is also burdened by being next to the Days Inn. Hardly a showing goes by without a client making a comment about that property.
As sobering as that information is, there are changes that are taking place which will slowly shift the area of growth from South Tryon to North Tryon.
The construction of the UNCC building is rapidly rising from the ground to make a dramatic statement in the First Ward skyline. It’s commanding height, 12 stories, will stand out like a beacon, and will be followed by additional development. The First Ward Park and associated parking deck are awaiting groundbreaking sometime this summer.
The North Carolina Dance Theatre on North Tryon next to the McColl Center for Visual Arts is nearing completion.
Other projects will emerge to change the complexion of this area of the city, and increased property values will follow.

Things are beginning to move

This has been an interesting weekend. Significant activity has been taking place on my listings over the past 10 days, and I have received two contracts over the weekend.
Just as a brief rain shower doesn't mean the end of a drought, it can signify a change in the attitudes of the buyers.
Interest rates look like they will begin to creep up, and sellers are examining their prices and "right pricing" their properties in an effort to move buyers to the closing table.
It will be a while before we return to the heady days of 2007, but the corner appears to have been turned.