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Thursday, August 16, 2007

August 16, 2007

Charlotte Condos As Investments. I’m Chicken Except…

Late last night after I checked my day’s work and tucked the big dogs in bed, I sat and surfed. It is amazing what sites come up at midnight and are hard to find the next day. But it’s interesting. Before surfing, I thought I would tackle M and M’s as my next subjects: Mortgages and Management Companies. Instead I cringed when I came across a website that spoke to Uptown.In essence, this person was hawkin’ “Come On Down”…referring to Uptown Charlotte.First, the North Carolina Real Estate Commission frowns on our using our crystal balls. And our own good sense might well do the same. The one thing I know for sure, the only thing I know for sure, is that I cannot predict appreciation. I can speak to my perception of the marketplace. Period.So when I read about the number of sales and the prices and the towers and on and on…and how this is the place for investors because of the promise of appreciation and substantial gain, I say “Whoa”. I talk with other brokers and some of us are being very cautious for our clients…some of us are suggesting condominiums outside the Uptown Loop…because some of us think the preponderance of small, most often one bedroom condominiums are headed for a definite unknown future. If there were a way we could parse the purchasers so we could know how many investors were involved with a project, we might have a more clear picture…and some might say, well, there is a cap on investors. Perhaps, but is there a cap on “second homes”?
In SouthPark, there is a handsome new project where today there are 40 units for sale. That conservatively is about 25% of the project. Certainly, that project will change as other retail and businesses come aboard, but what if that were your primary residence?
In some states, there are laws that prohibit rentals in some multi-family projects…rentals may occur only in dire circumstances. I can only hope that our legislature would take a look at that concept for North Carolina.Back to Uptown.
I have a friend who was asked to do a feasibility study for one of the towers. Their answer was, “No”. And then asked why, their answer was “ because I don’t think it is feasible”. Consider that in this market the same folks who often do the feasibility studies for the developers are also the spokesperson to the media. So who do you believe?
I am a cautious person. I believe you should be able to get out of whatever you get into…with relative ease and minimal heartache. The normal angst precludes not being able to get a mortgage on your place because there are too many investors. Not being able to get out financially because you are competing with not only new construction but also other, lots of others, in the same marketplace. How many one bedroom condominiums can our Uptown accommodate? Today? In the next 5-7 years.
Then let’s think logically…Charlotte is still growing. There is land close to uptown, close enough to build more towers, more mixed use and still have access to the city. Hmmm.Would I rather be able to walk my dog in the neighborhood park, actually have a grocery closer by, have more than 550-750 square feet, be able to hop to the Y as well as the night life and pay less than $300 a sq ft.? Hello!
Of course, there are folks who do use the Uptown condominiums as their city pad…some folks do use them as a second home. I am speaking to the general population for whom this is their primary residence, their biggest investment. Single folks just starting out, young marrieds enjoying the street scene, the night life and the glitz.
Charlotte is a great little city…growing, energetic, vibrant. The streets are sometimes paved with good intention, the air is less than pure, the people represent both the best and the worst and the mantra or at least, my mantra is always, “Caution, caution”. Even as a real estate broker specializing in condominiums.
Lynnsy Logue. The Real Estate Lady® and Condo CanDo®
Charlotte's Condominium Specialist since 1986

Wednesday, August 15, 2007

Charlotte Condominium Conversions

August 15, 2007

Conversions: Charlotte Condominiums

Something Old, Something NewSome Converted…aha…yet another twist for Charlotte Condominiums…
As I think about the various elements, the variety of processes in the world of real estate most specifically, Charlotte Condominiums…I consider “ conversions”.
A conversion would be a property which has been converted to a condominium. A property which had another use, for instance:
Apartments are the most likely candidate for conversions. Property that was initially built as an apartment and at some point in it’s life span was converted to a condominium.
Cotswold Homes, brick gardens, were built as apartments. At first glance, you might think they would qualify as town homes. Because of their construction, they had to fall into the legal category of condominiums.
Selwyn Village off Wakefield has a town home configuration as well as flats. Obviously they converted to condos from apartments. One clue on the earlier conversions is the tell-tale central laundry facility. And often a central heating system accompanied the apartment status.
Alson Court in Eastover is another conversion. Stately brick with hardwood floors and a handful of carports.
There are many conversions throughout the older sections. My favorites are the handsome old Myers Park mansions that were converted from single family to two or three condos. I applaud that innovative thinking and that was many, many years ago.We might see more of that down the road.
Favorite stories are the apartment/condo/apartment/condo status of Heathstead. One of the largest, if not the largest, condominium complexes in Charlotte. In the SouthPark area, it was one of the pioneer projects and was built by Crosland.
Another favorite in SouthPark is Trianon…and I almost see that being a tear down someday. Precious and pricey location. Still has central heating plant.
Uptown, the elegant Poplar was once apartments. New York flair, solid, classy it was converted long ago and is a coveted location.
Fifth and Poplar started off as Condos but the market was soft and they went to apartment status but I suspect the construction is more to the liking of condominiums. Unlike some apartments which have been converted.
Sometimes I get the feeling that an apartment building, complex, is being built with the eventual intention of conversion because the construction is less costly for the apartments in some cases.
Unique conversions:
Settler’s Place: on North Church St. Adjoins historic N.C. Medical. Five stories. Six units were prior to new building. These units receive tax credit because of historic designation. Newer units face the old cemetery.Exterior construction is EFIS.
2 parking spaces, deeded storage in basement. Older units (5) share rooftop terrace; 16 new units, each with private terrace.
St. Peter’s
Conversion 1996. Historic building. See Walking Tour. Renovated in early 80s. Parking is off W 6th St Complex is at Poplar St and 6th St. Some 2 story units, some three. Exposed brick walls/wood floors. Flats as well as townhouse styles. Basement storage.
Alexander House, Elizabeth-Colonial Heights Pictured above
Conversion. Built in 1917 and converted to condominium in 1993. 509 Clement Ave. Clement Ave was originally constructed to accommodate the trolley so it is wider than most streets and has a boulevard effect. Total of five units at Alexander House.
One of my favorites is in Elizabeth. Built as a condominium for residential use, it has zoning for Office.
Business and warehouse converted to condominiums? You bet. There’s Factory South and Atherton Mills.
The cautionary flag I would throw on a conversion is the construction. And not just the new hardwood floors, the updated kitchens with granite and snazzy new bathrooms…hire an inspector to go over the unit with a fine tooth comb. Both structural and mechanical.Of course, that goes for any property. Yes, even brand new…especially brand new.
That is for another day.
Meanwhile, I suggest “Googling” convert apartment to condominiums. Fascinating and good information.
Thanks for tuning in, Lynnsy Logue, The Real Estate Lady and Condo CanDo, Charlotte, NC, Charlotte’s Condominium Specialist

Tuesday, August 14, 2007

Charlotte's Many Voices

August 14, 2007

The Planning Commission, the Zoning Department, Home Owners and Neighborhood Associations.

Charlotte-Mecklenburg has a large and capable staff of good folks at The Planning Commission. They have an excellent map-making department, a superb graphics department, they have numbers and statistics folks with lots of experience and they have visionaries, too. It amazes me how we sometimes do not listen and take into account their recommendations. Doesn’t that make you wonder? Recently, zoning was passed by the governing body for a project in Dilworth that both the Planning Commission and the Neighborhood Association opposed.I read an article recently from Seattle…it spoke to the longing many years ago for the community to be involved in the planning of their city. Community formed, community spoke and with little avail. Money speaks louder make no mistake about it…if it’s in the form of the possibility of increased tax revenues or another source of income…we see it happen time and time again. And if community wins once…wait…for the developers can often outwait the community. It has happened before and it will happen again. Axiom.
Zoning. How do they keep it straight? We have to have smaller home sites so we can have more homes. We court density thinking it is the only saving grace, the only answer to an energetic, burgeoning town. Smaller home sites, more vertical homes priced higher and higher each year. And just for fun, do you think there is a limit on the number of one bedroom condominiums in uptown Charlotte? Okay, here is a puzzle. There was an article about the Light Rail and how there are building permits for 7300 residential units along the rail. Now there is also a report that informs us that in the last quarter of 2006 there were 7300 building permits for condos. There is probably some overlap, but when asked, I was told they are not the same.
The very neighborhoods with their charm and ambiance that brought folks here are changing. Maybe it is inevitable. We are a people who fancy “more”. I keep wondering if other cities go through this…where neighborhoods change and streets change and the Mom and Pop shops and restaurants can’t compete and pretty soon, Charlotte as we know it, knew it, is gone.
In my sleepy, country neighborhood, we have a strong neighborhood association because builders have found us and try to build more houses than our covenants and restrictions call for. We want to maintain the integrity of our neighborhood, we stand close, chip in, hire an attorney, speak out, fight back. Part of this process has been fun…we have a website, an email newsletter and we get together more often. Look for the good, cherish the positive.

I have a friend who is a personal trainer…she says we “tear” the muscle apart to build the muscle stronger. Maybe it is that way with cities. I have lived in Charlotte for over 50 years. I love this place like no other. I can recall another time…and I am grateful that we live in this vortex of growth and change. I wish only for old-fashion kindness.

Monday, August 13, 2007

Beginnings ARE Difficult, Especially When Defining Charlotte's Condo Market

Podcast August 13, 2007

Beginnings ARE Difficult…Especially When Defining Charlotte’s Condo Market

Many of us in the real estate profession are shaking our heads in wonder, amazement and amusement about the Condo landscape in and around Charlotte, NC. So what must the general public be thinking? Or how about the developers and builders? And the mortgage folks? Then there’s the planning commission, the zoning department, the water and sewer department, Light Rail. Oh, and let’s remember, the management companies. Oops, then there’s current events-the mortgage debacle. And past events, the cycle of overbuilding-the lure to investors in an energetic, glitzy market. Oh, my-where do I start?

With the basics.
I believe that there are many levels available for scrutiny and I have learned that old axioms age well because of their simple truths.
Many years ago in Uptown Charlotte NC, condominiums in Center City Charlotte were built in Fourth Ward and in Third Ward. They were, by and large, smaller complexes, except Springfield Square and by the sheer nature of Condominiums then, pretty avante-guard. Locale lenders encouraged this residential concept and granted loans to encourage buyers…many of the loans, however, were adjustable or balloons of 5 to 7 years. And as time rolled forward and folks were moving up and out, re-financing became tough and selling became tougher. Enter rental property. Then, of course, any buyers who would come would have a tougher time getting a loan because of the higher investor ratios. Condominiums got a bad name. Not because of the concept but because of the variables in the marketplace. Cycles happen. (to be continued)
Less is More.
Charlotte, NC used to be a sleepy southern town. For many years Charlotte ranked in the top markets, the ADI…Charlotte was a great test market for the likes of Proctor and Gamble…but no one else except the natives could differentiate between Charleston, Charlotte, Charlottesville or Chapel Hill. We were safe. You couldn’t find us easily. So we had condominiums and townhomes in the inner circle around downtown/uptown Charlotte, condominiums out a little…Raintree, Quail Hollow, SouthPark (before it was SouthPark), on the East side off Central, off Kilborne, off Hickory Grove (now W.T. Harris), out Mint Hill way, off Lawyer’s Road…and then an accelerated spurt in the late 70’s, early 80’s off Carmel. But you get my drift. We had condos and townhomes…and once again, the tick of the cycle. The builders in my opinion overbuilt. (to be continued).
Buyer Beware.
I have a friend who says of the world, how can you do anything well when you are trying to do everything? I see that now in new construction: poor building materials, poor construction. Lack of attention to detail. Re-direction of responsibility. And on the buyer’s side: lack of knowledge, lack of qualified representation, lack of patience. (to be continued.)
No Such Thing as a Free Lunch
Free furniture, free closing costs, free home owner’s dues, free mortgage, free moving…
Hang-on to your hat because there is almost always an underlying reason. Builders are rarely going to give anything away unless they need to…and if they need to, the buyer needs to be able to read the signs…and make the situation work for them. We live in a capitalistic society and it is driven by profit. Money. (to be continued.)

Thanks for tuning questions? I am listening.Lynnsy Logue, The Real Estate Lady/ Condo CanDo, Charlotte, NCCharlotte's Condominium Specialist