Uptown’s Great Fall
Posted March 8th, 2010 at 4:25 PM by Jeff A. TaylorFirst, kudos to Kerry Hall Singe for continuing to follow the reality beat in regards to local development trends. A front-page story noting that Uptown population is currently 35 percent below booster projections — yet Center City Partners still clings to a 2020 target of 25,000 residents, or 227 percent more than the current Uptown population of 11K — is actual journalism and a public service.
Let’s slice the numbers a different, more telling way: CCP thinks Uptown population will grow roughly 10 percent a year for the next 10 years after being completely flat for the past four years. Why doesn’t the city of Charlotte immediately defund this bunch of lunatics?
Meanwhile, real estate prices have cratered — as we’ve steadfastly told you they would:
A two-bedroom, two-bathroom unit at Fifth and Poplar Condominiums that sold for $427,500 in 2007, for example, is listed for sale at $285,000 – a one-third drop. … Closings for new and existing uptown homes hit a high of 533 in 2006 before they fell to 153 last year, according to an analysis of transactions through the Carolina Multiple Listing Service from 2003 through 2009 by the Charlotte Regional Realtor Association. The listing doesn’t include private sales and some new construction.
Average sales prices rose steadily from about $260,000 in 2003 to a high of nearly $350,000 five years later before falling back to around $260,000 last year, according to the association.
But mostly I enjoyed David Furman back-tracking — back-leaping? — from his previous all-is-well mantra. Recall from January 2008 when Furman spun the implosion of the ultra-luxe One Charlotte condo effort:
It doesn’t have anything to do with the bread and butter of the housing market that is here everyday — the units that range from $200,000 to $500,000.
Or the segment that dropped in value by one-third, you preening peacock of a huckster. Now check Furman’s current spin:
David Furman, one of uptown’s most bullish believers and active developers, remembers the early warning signs in 2008.
His 202-unit, $73 million condo high-rise, TradeMark, was about 95 percent sold when people started having trouble closing.
At the same time, buyers at another condo project, 184-unit Quarterside in First Ward, tried to get out of their contracts, he said. As sales dropped, his company aggressively marketed the building but didn’t get any nibbles.
“I thought, ‘We’re screwed,’” he recalled.
He later converted Quarterside to rental units to cut his losses, one of three condo projects to do so last year. He says the 28-story TradeMark is “stable” and he is renting out some units that didn’t sell until the market improves.
“It was booming beyond what was sustainable,” he said of uptown’s condo market, which grew rapidly in the mid-2000s before tapering off last year. “I still think there is a thirst for urbanism. Downtown is feeling the same pain as everywhere.”
Horsecrap.
Only overbuilt, overhyped areas are feeling the same pain as Uptown condos. You would have to be stark raving mad to offer more than two-thirds of the current asking price for any piece of property inside the 277 belt — assuming you could get qualified for it.
Bonus Nightmare: Emma “Clueless” Littlejohn.
March 8th, 2010 at 7:38 pm
The housing boom downtown slowed during the worst economic downturn of our lives?
Stop the presses.
March 8th, 2010 at 9:30 pm
As an Uptown dweller of almost ten years now, let me say that I am just thrilled with the way these boneheads have destroyed the condo market by (1) generally overbuilding and (2) building too many overpriced units. I basically have no choice but to stay here — if I put my condo on the market now, it would probably sell for at or less than what I paid for it way back in late 2000.
I don’t usually believe in regulating commerce too much, but I’ll make an exception in this case: There needs to be a complete moratorium on new Uptown condo development until the current supply is virtually exhausted.
March 8th, 2010 at 11:43 pm
Ugh, the “yeah but” conservative:
Q: Are you for free markets?
A: Yeah but I want the spike-soled jackboot of government to distort the market to save the value of my condo.
March 9th, 2010 at 7:57 am
Max, you infer too much. Where did I say that any such moratorium needed to be enforced by the government? The moratorium I was thinking of would be organized by the condo developers themselves, because building any new condos at this point makes zero sense.
March 9th, 2010 at 8:12 am
Building new Condos makes plenty of sense if you can get the uptown crowd to pay you to do it with taxpayer money.
March 9th, 2010 at 8:54 am
Clay, you referred to “regulating commerce” as preface to your moratorium proposal, implying government involvement. If the developers shared your opinion regarding further construction, they will stop building of their own accord.
March 9th, 2010 at 9:01 am
You’re right, I did use the R word. My bad. My intent was that developers should look beyond their short-sighted desire for profits and do what is best in the long-term with respect to growing and sustaining a market for their product. What they’ve done in the last ten years is the building equivalent of killing the golden goose.
March 9th, 2010 at 9:14 am
Seeing how such unfounded optimism in real estate is the MAJOR cause of said economic downturn, it is relevant.
March 9th, 2010 at 9:54 am
Uptown building was nothing more than a pump-and-dump scheme, aided and abetted by local govt which lusted after ever-more tax revenue.
March 9th, 2010 at 10:06 am
Not all of it, Jeff.
Up until about 2003 or so, most of the condo development in Uptown was actually in high demand, because there wasn’t much of it. Before Ivey’s and 400 North Church, practically no one lived Uptown except for in 4th Ward. There is a certain percentage of the population, both liberals and conservatives alike, who actually like living in a dense, condo-style environment. I am one of these people. So for a while, the new condos were snapped up like hotcakes.
The problem began when developers extrapolated the initial rush into a long-term boom and vastly increased the pool of available units. In short, they built too many, too fast. If they’d have kept the rate of new development to a more reasonable level, we wouldn’t be in this mess and there would be a lot fewer vacant, unsold units. The worst hit in all of this are those who were already here, who have seen our property values and sellability* plummet with all of the oversupply.
* I’m actually not planning on moving anytime soon. I like where I live. But I hate that the option of being able to sell, should I really need to, has been sharply curtailed because of the stupidity of developers.
March 9th, 2010 at 11:38 am
>> The problem began when developers extrapolated the initial rush into
>> a long-term boom and vastly increased the pool of available units.
This has been the market cycle of nearly EVERY product in the history of the universe, from the Model T to Hanna Montana lunchboxes. The only really unique thing about the uptown Charlotte market is that it played cat-and-mouse with grocery stores – Reid’s & HT didn’t come until there were a certain # of people living in the area, and the area was less marketable until the grocers finally arrived.
The single most obvious non-governmental cause of the housing boom/bust (nationwide, not just Charlotte) seems to be the one that gets the least attention: age. Our consumer and housing economies hit their peaks in the 80s/90s when Baby Boomers were working and family-raising age (25-55). Now the workforce (and with it the market of homebuyers) is Baby Busters and Gen X’ers, while Boomers are retiring empty nesters.
March 9th, 2010 at 12:54 pm
And contrary to all the hype, most empty nesters are not interested in taking on a new mortgage at $250K and up for a condo half the size of their detached burb home, which is close to their family, friends, church etc.
The Uptown crowd echo chamber completely discounted any outside, contrary reality.
March 9th, 2010 at 8:02 pm
And contrary to all the hype, most empty nesters are not interested in taking on a new mortgage at $250K and up for a condo half the size of their detached burb home, which is close to their family, friends, church etc.
Too true. One of the annoying things about the militant urbies is the “American Beauty”-style caricature of suburban life they’re so invested in. Of course, it’s based on the same conceit that permeates everything about our affluent, educated, progressives: that everyone would choose to live like they do, if only the rest of us were smart enough to understand how great it is. This is the thinking behind the transit plan, the Whitewater Center, every public dollar that’s wasted on “the arts,” the plans for a subsidized uptown farmers market, and all the rest of it.
Since I own a home here, I have an interest in the continued health of the community. But forgive me if I can’t avoid a little schadenfraude as their dreams of remaking us into San Francisco east implode around them.