Housing Affordability

"Houses haven't been this affordable since appliances came in Harvest Gold or Avacado Green" states an article in the Kiplinger Housing Forecast, read the full article here.  There is evidence of this all over Charlotte as well.

Two projects in Charlotte that are making significant waves are 28th Ro in NoDa, and Seigle Point just outside the I-277 loop on Tenth Street.  28th Ro has closed on 32 units in the past month and only has a few left, and a similar history is available at Seigle Point.  In both cases it was a situation where adjusting the price point found an available willing market.

Soon to return to the market will be The Garrison located on North Graham Street inside the I-277 loop.  this building was designed to reflect the industrial past of Charlotte, and has huge "warehouse windows" with unparalleled views of the city.  My belief is that once they come on the market in early January, they will quickly disappear.

This leads me back to the Kiplinger article.  We have all had to reset our financial vision of the future.  Many who gambled on the seemingly neverending increase on property values have learned a valuable lesson; if something looks too good to be true, it probably is.

As we clean out our financial obligations and reset our goals, we will once again begin to grow.

Construction Activity Increases

This article In US News cites 10 cities where construction activity is returning to normal, and Charlotte is # 8 on that list.  It shows that we are up 23% in the area of multifamily (rental) housing.  Rentals remain very strong.  Here is a sampling of trailing 12 months at a few downtown condominiums:

• Avenue       33 leased average days on market 52
• Courtside    19 leased average days on market 36
• 5th&Poplar 26 leased average days on market 41
• Gateway      29 leased average days on market 51
• TradeMark  24 leased average days on market 31

This popularity in rentals is fueling developers to build more rentals.  Centro City Works is in the process of finalizing plans to begin construction in February on a rental building near the East/West LYNX Light Rail Station in the South End. 

Two other developments that have either finalized or received their building permits will place new apartment developments in downtown Charlotte, one on the corner of MLK Jr. Blvd and South Graham Streets across from the proposed construction site of the Charlotte Knights baseball stadium, and another at the intersection of West Fourth and Johnson & Wales Way in the Third Ward near the Doubletree Hotel.

Another potential site will occur when the former State Office Building on the corner of Graham and Trade Streets is torn down.  The building has been crumbling for the past 10 years at least, and an apartment/condo development was originally announced for that space.

Throw in the relocation of the Amtrak Station and MultiModal Terminal on South Graham and a picture of intense construction will change the character of the near Third Ward forever.

All this activity will help raise property values in the entire downtown area.

Renters Can Solve The Housing Crisis

Really, renters can start the home ownership recovery!  In this article, a case is made that people who would most likely be buying a home are waiting for unemployment to come down, and the government to act responsibly before buying.

It also points to the fact that investors are sitting on a lot of cash, and purchasing financially distressed properties at a highly discounted price can lead to a stable cash flow for a protracted period of time. 

The catch is that current FHA, Fannie Mae and Freddie Mac require huge downpayments and a substantial waiting period for purchases.

I have written several articles in this blog that point to the increase in renters in the downtown Charlotte market during 2011.  The thrust of my blog is to focus on the trend to embrace the urban lifestyle, and renters can embrace that as much as owners can, and embrace it they are.

Getting back to the article linked above, the implication is that if investors are allowed to help clear out the foreclosure and shadow inventory issues in the private market, the government (you and me) will not be stuck with carrying that burden.

I have been more active over the past 90 days than I have since 2007!  A large portion of that activity is coming from people seeking to rent.  As we search for properties, I am finding that rental rates are increasing, time on market is decreasing, and landlords are not negotiating on their rates.

Supply and Demand reigns again.