More Insight On Density

Go Here for an interesting article about the value of homes located near transit stops.  It is a clear example that the Transit Corridor concept that Charlotte has adopted is the right solution for a growing city.

In the days of cheap gas and lots built out on former farm land with features such as a fenced in yard and a bonus room over the garage, no one worried about how long it took to get to work.  Then things became congested.  Commute times began to increase, gas prices went up, miles per gallon did not, parking rates increased.  Services became sketchy in some of the remote suburbs.  All was not well.

People tend to vote with their wallets, and with their feet.  Closer in became more desirable, to heck with that bonus room.  Some people would look around them as they drove to work and all saw the same thing.  All the other cars moving slowly or stopped in traffic had just one driver, and most of them were going to the same place.  Why use a car for that?

Places in the northeast, most notably New York City and Boston, grew up around strong transit systems.  Just try to imagine those cities today without their "A" Train, or Blue Line, etc.  It can't be done.

So, Charlotte, a city built for the auto, and the people living here, are now learning that Transit Corridors are the desirable way to move forward, and the resulting increased property value is the proof.

Density Rules

Go Here to read an article in PlanCharlotte concerning population growth in the Carolinas.  If you read through the entire article, you will find that while Charlotte is growing, it is not the fastest % of growth.

Several factors contribute to that, most notably, with a large population, percentage of increase, even with large numbers, will be low.

More importantly, the article points out that the center of the metropolitan area is growning faster than suburban locations.  Density is a fact of life!

Developers are finding it harder to find land to develop in the urban core, and when they do, they seek height.

Transportation spokes are also becoming increasingly important.  Taking the LYNX Blue Line south to 485 will take you through a canyon of apartment developments springing up all along the line.  The BLE (Blue Line Extension) which will head northeast up to UNCC will also spur that type of growth.  Already there are over 600 apartments that have been announced to be constructed within 1/4 mile of the East 36 Street station, and that line will not be active for 4 more years.

Look forward to continucd growth in the urban core.

Not Enough Inventory!

This is another installment of the Franklin American Mortgage Company Real Estate Report.  I find this report to be an excellent view of current market conditions, along with an insiteful view of why things are happening the way they do.

Enjoy!

Not Enough Homes For Sale? Who would have thought that we could be entering the home selling season with a headline which says there are not enough homes for sale? After all, analysts had warned that the shadow inventory of homes held by banks would weigh down the markets for years to come. Where did these millions of homes go? Many were foreclosed upon. Others were sold by short sale rather than going through the foreclosure process as foreign and domestic investors bought millions of bargains. Also, many others were modified to help homeowners to remain in their homes as the economy has gotten stronger and provided more jobs for those who were unemployed. This stronger economy has meant that fewer home loans have moved into default in the past few years as well. On the other hand, there are still many homes waiting to be foreclosed upon. How could we have a shortage of inventory at this juncture? Investor demand along with population growth and rising household formulation have all combined to remove excess inventory. Combine these factors with the fact that those who owe more than their homes are worth are reticent to sell. Even those who were foreclosed upon are starting to purchase again or need single family homes to rent. The question is not why is the inventory down, but will the lower inventory slow down the real estate market in the coming year? You can't have rising home sales with not enough homes for sale. We think that two factors will increase inventory in the coming year. Rising home prices will encourage more home owners to list their homes. And builders can create inventory by building more homes. Increased building activity is expected to help pump up the economy in the coming year. If real estate demand continues to rise, expect banks to accelerate the process to get rid of homes in their inventory. In other words, we are expecting the low inventory 'problem' to be self-correcting during the year -- unless new demand outstrips this additional supply. Fifty percent of Americans say they expect the housing market to improve in 2013, while 16 percent say they expect it to get worse, according to a Bloomberg National Poll of 1,003 adults. What’s more, the majority of the Americans surveyed said they have big hopes that the improvement in the housing market will also help give a boost to the overall economy. “Prices are very steadily, slowly, starting to creep back up,” Eric Matheny—an attorney from Fort Lauderdale, Fla., who recently purchased a new home—told Bloomberg. “The housing market is a major part of the economy, so it says something about the strength of the economy.” More Americans are expressing optimism about the trajectory of home prices too. Twenty-seven percent expect their home values to rise while 16 percent said they expect their home’s value to fall. In the previous survey, 20 percent predicted that their home’s value would rise while 20 percent had said they expected values to fall. Source: Bloomberg Single family home tenants are 18 percent more likely than apartment tenants to stay in their current homes five years or longer, suggesting that demand for single family homes, the fastest growing rental category, will be more stable than multifamily demand, according to a new national opinion survey released by ORC International for Premier Property Management. Twenty-six percent of single family tenant plans to stay in place five years or more, compared to one out of five apartment dwellers (22 percent). Founded in 1938, ORC International is a leading global market research firm and since 2007 has conducted the CNN|ORC International poll. One factor contributing to single family stability could be high marks renters give the quality of single family property management. Some 80 percent of tenants in single family rentals said their property management was good or excellent compared to only 63 percent of apartment renters One out of four apartment dwellers (26%) rated their management as only adequate. “With the emergence of the single family rental option, American families have a new housing choice that brings them the aspects of associated with owning their own homes important to families such as living space, privacy, safe neighborhoods and the sense of community. Single family rentals can be found in virtually every community today and more and more families are choosing single family rentals either as a temporary stop on the road to becoming homeowners or as a permanent solution to their housing needs,” said Chris Clothier, director of sales & marketing and partner of Premier Property Management. Over half, 52 percent, of renters, including 60 percent of single family renters and 44 percent of apartment dwellers, said they anticipate becoming homeowners in the next five years. Families with three or more members (64 percent) and children under 13 (69 percent) were more likely to become homeowners than the 43 percent who don’t plan to become owners. Clothier said near term interest in becoming homeowners among single family tenants reflects the new roles single family rentals are fulfilling as a stepping stone to homeownership for first-time buyers and as a sanctuary for large numbers of families displaced by foreclosures but who plan to buy again when they can afford to do so. Source: ORC The IRS no longer mails reminder letters to taxpayers who have to repay the First-Time Homebuyer Credit. To help taxpayers who must repay the credit, the IRS website has a user-friendly look-up tool. Here are four reminders about repaying the credit and using the tool: Who needs to repay the credit? If you bought a home in 2008 and claimed the First-Time Homebuyer Credit, the credit is similar to a no-interest loan. You normally must repay the credit in 15 equal annual installments. You should have started to repay the credit with your 2010 tax return. You are usually not required to pay back the credit for a main home you bought after 2008. However, you may have to repay the entire credit if you sold the home or stopped using it as your main home within 36 months from the date of purchase. This rule also applies to homes bought in 2008. How to use the tool. You can find the First-Time Homebuyer Credit Lookup tool at IRS.gov under the ‘Tools’ menu. You will need your Social Security number, date of birth and complete address to use the tool. If you claimed the credit on a joint return, each spouse should use the tool to get their share of the account information. That’s because the law treats each spouse as having claimed half of the credit for repayment purposes. What the tool does. The tool provides important account information to help you report the repayment on your tax return. It shows the original amount of the credit, annual repayment amounts, total amount paid and the remaining balance. You can print your account page to share with your tax preparer and to keep for your records. How to repay the credit. To repay the First-Time Homebuyer Credit, add the amount you have to repay to any other tax you owe on your federal tax return. This could result in additional tax owed or a reduced refund. You report the repayment on line 59b on Form 1040, U.S. Individual Income Tax Return. If you are repaying the credit because the home stopped being your main home, you must attach Form 5405, Repayment of the First-Time Homebuyer Credit, to your tax return. Source: IRS

A Heated Market Returns

The Avenue Condominium

A funny thing happened as I was preparing for my weekly wine tasting at The Dunhill.  I was producing my brochure and evaluating the current increase in sales in the downtown market.  It started as a curiosity, then became glaringly apparent that The Avenue has become the hottest property in downtown Charlotte.  Since January 29, 2013, 17 properties have either sold, or have gone under contract! 

Wow!

Furthermore, sales are within 3% of the asking price, and within 13% of the original sale price back in the heat of the real estate market in 2007.  Prices are stabilizing in The Avenue and will begin to rise over the next several weeks.

Other downtown properties will also begin to show this type of change as well.  Often when I show properties, my client will comment on the number of lock boxes on hand.  Other condo developments are all showing few properties.  Fifth & Poplar has 1; Courtside has 1; TradeMark has 5.  Currently, at The Avenue, there are 12 properties available for sale, and 5 for rent.  This represents about 4% of the total number of units available, 10% is considered the norm.

I have said it before, supply and demand is the only law that is absolute, and we will soon see the effects of this law in full swing.

Where The Action Is

The pie chart inserted here shows the percentage of activity over the past year for all downtown activity, currently available, under contract, and sold.  I have separated the segments into price points to deliver the graphical results.

Fully 82% of all activity is taking place below $400k.  The biggest segment is under $200k.  I have further breakdowns available separating out the available/contract/sold numbers by price point.  If you would like those numbers, please contact me at dennis@236-7119.com, and I will send you the data you request.

The recovery of the housing market is happening fast.  Property priced properties are disappearing almost as fast as they appear on the market.  With little new inventory entering the market, things will shift to become more of a Sellers Market, though prices have not returned to pre-recession levels.  It is common to have multiple offers being made on properties which leads to a best and final pricing.

If you have been thinking of listing your property, please call me, 704-236-7119.  I will provide you with an analysis of your building and the market in general in order to help you make an informed decision.

Tipping Point: Buyers - Sellers

The last 5 years have truly been a nightmare.  Property sat, buyers were no where to be found, confidence in the economy was at it lowest point in memory.  Sellers became extremely creative in enticing the few buyers available with any variety of incentives.

The thing with Buyers Markets is they can end abruptly.  This article from Real Estate Information Systems points to the end of Concessions.  In the past 8 months, 10 of the contracts I have written have either been met with multiple offers, or rejected by the seller.  Two years ago that would not have happened.

As of today, there are 68 properties downtown that are under contract, and only 82 properties available for sale.

If you have been considering listing your property, the time to do it is now.  Please contact me for an analysis of your market value.

The State Of Center City

As we slowly creep out of the recession, it is important to look back and see how we are doing, and where we are going. Charlotte Center City Partners has done most of the heavy lifting for us with their State of the Center City 2012 report.  Please take some time and read this well written and informative report.

At times it looked and felt like everything was going bad, but it really didn’t as the report shows. The issues we face concerning Transit, and Taxes, and Infrastructure are all important issues in building our city of the future.

The real estate market will be affected by this as well. Density and urban living continues to grow, and the demographics of those leading it are mostly below 40. Currently, due to the financial markets being hesitant in lending to for-sale condo development, apartments have taken the center stage.

Over 700 units were announced in January between two projects. The building timeline for those two will be about 18 months. Couple that with the 2 other projects already under constructions which will hit the market in 12 months and our increased capacity for rentals is apparent.

With the exception of The SKYE Condominiums (67 units), there is no for-sale projects for that same period of time. This will change by late summer. I expect to see the Mint Museum Condominium project to re-appear. Additionally, the site located on the corner of South Tryon and Third Street should once again become active in the market.

The timing for these will push into early 2016. The rapid growth we saw during the first 7 years of the 2000’s will seem glacial by comparison to the next 7 years.

"work and play without having to drive a car"

Wow! Did I read that correctly?

Here is an article in the January 9th edition of the Charlotte Observer describing a new luxury high rise apartment building in Charlotte. The building will be located on the corner of West Tenth and North Church Streets, the former site of the Renaissance Apartments torn down 5 years ago. Something on that vacant rubble filled lot will be a welcome addition to the Fourth Ward.

I see two things of interest with this announcement. First, as a long time advocate of a car-less environment, I will welcome like minded people into the city. It is becoming pretty clear that the urban lifestyle is taking a more prominant role in Charlotte. The thought of walking to where you want to go will be quickly followed by retailers who want to take advantage of that foot traffic, and the long sought return of retail to downtown will begin. My contention is that the best corridor for retail will be Trade Street between Tryon and Graham Streets. Not coincicently, that will be the route of the "Streetcar Project" that Mayor Foxx wants developed.

The second point of interest in this announcement is the beginning of the completion of the north end of downtown. The Novare Group, one of the developers of this project, had initially planned The Catalyst Condo, on the corner of MLK, Jr. Blvd and South Church, to be located across from Reid's at Seventh Street Station. When the negotiations for that First Ward site fizzled, the project moved to the Third Ward where it now exists. With the extension of the LYNX Blue Line to UNCC committed, and Daniel Levine poised to begin construction of 2 parking decks in the First Ward, and the beginning of the construction of the First Ward Park across from ImaginOn, change will be coming more quickly.

Third Quarter Sparkled Downtown

There is an article in the Charlotte Business Journal from the Charlotte Regional Realtors assocation that addresses the increased activity in the Third Quarter within the region. The results of 2012 over 2011 is quite amazing:

       1.Median Sales 2011 = $210,000; 2012 = $207,250
       2.% of asking price 2011 = 93%; 2012 = 95%
       3.Median Days on Market 2011 = 137; 2012 = 90
       4.Units Closed 2011 = 37; 2012 = 64
       5.$ sq ft 2011 = $213; 2012 = $221

The article was intimating that we are now in a sellers market. While I would not go that far, it is clear that activity has increased by 42% and prices are rising. Inventory remains near 10 year lows, interest rates remain under 3.5%, all systems are go.

If you are considering listing your property, please call me (704) 236-7119 and I will do a full analysis for you.

The time might be right.

Charlotte's Best Spot To Build

It Probably Will Not Look Like This

On the heels of the successful selling of the renovated Metropolitan LIfe Building turned into condos, a bold announcement was made for a new development across the street, 300 South Tryon. It was to be a mixed use facility, commercial and residential on top.

Pre-sales were brisk as people were lining up to buy these units, many which would have looked out over the then proposed Third Ward Park. The setback from Third Street was to have been wide enough, 25 feet, to allow for a grand entrance to the park.

We all remember what happened in 2008 don't we?

So now it is 2012, and we have been the site of the Democratic National Convention. The North Carolina Music Factory has proven to be a hit. Epicentre, despite the developers difficulty has been a success. The Romare Bearden Park in the Third Ward is under construction, and across from the park, BB&T Stadium is changing the face of Graham Street. Indications are that there will be a hotel out in Left Field, and Childress Klein has designed a 21 story apartment building to flank The Catalyst.

The location of the 300 South Tryon bulding is absolutely prime for development.

From a people point of view, there will be somewhere around 1,000 people living within 1 block of the park. They all have friends, so maybe double the number of people who will have an interest in that area. It is safe to assume that other developments will follow.

But getting back to the spot where 300 South Tryon holds, it will have frontage on Tryon as well as frontage on the new park, and the emerging Third Ward, the best of both worlds. It is for this reason that I believe it will be the next major project in Charlotte.