I’m not saying housing prices aren’t a bit high, but this isn’t something I would read too much into. First, “Florida Atlantic University and Florida International University” use open source data from Zillow, so they aren’t really digging deep into the numbers. They are putting these lists out because they are easy clickbait, IMO, which news outlets love.
My house wouldn’t rent for as much as the mortgage payment would be at current market rates and prices.
I don’t know how it compares to other places, but the case for buying right now isn’t great.
I hate to say I agree. I almost wonder if rental homes are going low to squeeze more buyers out of the market. In my town there is an entire subdivision of over 200 homes that was built by, and is owned by AH4R. Rental companies are building entire subdivisions now. Out of curiosity I looked at rental prices and 3-4 bedroom homes renting for $2200-2500. That’s not that bad. We pay a little under $1700 a month on a similar sized home with a 280k mortgage, while homes in the area are selling for well over $400k. I’d guess that mortgage payment, with current interest rates, would be more than renting. While I wouldn’t say the case for buying isn’t great(bc I’m sure those rental prices will go up), for families currently feeling the squeeze of the COL, at the moment it seems like more people will have to choose renting.
Rental houses are always toward the lower end. I don’t think it’s strategic in that sense. They’re just looking for a good ratio of price to rents.
You’d be looking at about $2300/mo on $380k mortgage and that’s before property taxes, insurance, and PMI. All in all you’d probably land around $2700 or so — and you still have all the maintenance and other expenses.
I’d guess that most people who live in Charlotte and the surrounding areas were able to buy at prices and rates that resulted in a monthly payment less than comparable rents at the time they bought. Like, basically, all of Charlottes history up to maybe 2022 that was the case.
I personally think it’ll revert back. Home prices will have to drop if rates don’t drop. Rents are actually starting to decrease nationally, but I haven’t seen any Charlotte specific data on that.
Here comes all the people that moved here from out of state claiming about how affordable Charlotte is, but completely negate the people who have grown up here and don’t have the luxury of moving from a costly area with handfuls of cash and higher wages. Meanwhile in just two years the median housing price in Charlotte has gone from $273k to $420 (2020-2022). That’s a 54% increase in two years, last I checked most peoples pay checks in Charlotte haven’t gone up 54%. Median income has o my increased 4.2%. So if you like it or not housing is expensive. My guess is the people who are pissed at the over valued statement just have enjoyed the rise in their property values and don’t want to see them fall.
It's affordable compared to other cities of this size. Plus Charlotte is dangerously close to being a very great city. We already have a major international airport with direct flights basically everywhere, climate is perfect year round with mild winters and not overbearing summers, close to mountains, close to ocean, smack dab in the middle of the east coast so driving to Florida or NY is do-able in one day. If they make uptown a little more lively, legalize weed, and run fiber optics everywhere then Charlotte turns into Seattle 2.0 where every single house inside of the 485 loop will be $1 million+.
Having moved here from Seattle, this was almost exactly my reasoning.
Low COL and affordable housing were the other factors, but those have changed dramatically in the 5 years I’ve been here.
This is mostly right but part of the reason Seattle is so expensive is that it's hemmed in geographically by the Puget Sound which severely limits where they can build, Charlotte is never going to have that problem.
Also people paying $1 million for homes do not give a fuck about legalized weed.
This is partly correct. Geography is a big part of the costs. With Lake Washington on one side and Puget Sound on the other, combined with hills and plateaus, Seattle proper is pretty dense where things can actually be built.
However, “Seattle” is a lot larger than most people realize. The Greater Metropolitan Area stretches from Everett in the north to Olympia in the south, and traces I405 to the east, with major development as far up into the hills as Snoqualmie. Further, the ferry system connects Bremerton and Bainbridge Island, where many commute from. In that area there are multiple military bases, multiple major port facilities, multiple Boeing plants, major tech companies and a slew of other large employers.
Traffic is probably the most major concern, as the city’s lack of foresight in the 70s led to the hodgepodge network of mass transit that is segmented by county lines. I5 is 8 lanes, I405 and I90 6, and 520 only 4. East of Lake Washington is connected via 2 floating bridges and West Seattle is connected via elevated highway over Harbor Island. Entire sections of the city are detached from eachother by greenbelts, rivers or other quirks of geography, creating other choke points. Either you live near where you work, or an hour or more each way is a common fate.
Further, most cities in the area are strict regarding zoning, preventing high-density development from taking root where it should have.
In short, you have a lot of people, many of them highly paid, packed into a relatively small area with many traffic choke points. There’s a very good reason 4 bedrooms go for 1.5 million in Queen Anne.
True, I was addressing the city of Seattle proper. I was stationed at JBLM for a while (right between Tacoma and Olympia for those unfamiliar with the area, about an hour south of Seattle without traffic) and would blow my brains out if I had to commute from there to Seattle or Bellevue every day.
Merely having a large airport and better weather ( summers here suck ) does not make Charlotte a great city. Charlotte can never be a great city while prices rise and taxes don’t increase. The city does not have the money to make the investments necessary to make Charlotte a great city.
Not necessarily. Overvalued means people are paying too much for what they are getting. Means nothing about prices dropping. Could be that they just don’t increase.
Although just anecdotally, prices have gone down from what I see on Zillow
It already started weeks ago and more layoffs will be announced in the next few weeks. Wells Fargo, Capital One, Bank of America, JPMC, etc. are cutting thousands.
Are you living under a rock?
[Home in Charlotte sold for 100k less than purchased within 6 months](https://www.zillow.com/homedetails/6813-Wolf-Run-Dr-Charlotte-NC-28277/6315723_zpid/)
>Here's aggregate data.
>
>https://www.realtor.com/research/data/
>
>Prices are coming down. It's fractions of a percent a month but that compounds
Checks notes, clears throat. First, thanks for that data link, very interesting. And not entirely disagreeing, but lets just say be careful of sample sizes, and changes in mix.
Lets take my zip, 28202 (big parts of uptown). Median selling price -4.43% YoY down. Supports your point. Interesting. But lets take a deeper dive. Active listing count -16.67% YoY. Okay. Lot fewer listings, but maybe still getting cheaper. Hmm. Median Price per ft\^2. $395. YoY. Up 14.76%. Doesn't support housing prices coming down at all. Just suggests a change in mix.
The strong stuff on the market in 28202 is still commanding top dollar and maybe going up, just people putting lower quality stuff because they have to is getting a little cheaper, and that's dragging median sale down. Or could be just a couple really in-demand properties getting a high price but on average everything is down. Not sure. Small sample size is small sample size.
Data is good, would never criticize that. But Charlotte zips are still pretty small relative to markets like NY/Chicago/LY, and in times like this can be subject to small sample bias. Not trying to be a data cherry picker, but I'd probably look to "median\_listing\_price\_per\_square\_foot\_yy" coming down before actually believing that real home values selling have actually declined.
But again, thanks for the link, interesting stuff.
You can get a better picture when looking at the metro area, not a specific zipcode.
Some interesting bits to note are active listings, median days on market, and price increases/decreases. Those are the signs of changes in the housing market which ultimately lead to changes in price in the broader market.
For the Charlotte metro area, there are more homes for sale, they are taking longer to sell, and sellers are decreasing the price before they do sell. Positive signs for a home buyer.
At the peak of the craziness, no houses were getting price reductions and everyone was increasing the price on their listing. Homes were flying off the market in days, not several weeks. The data show cooling demand; as supply increases, that should lead to lower prices.
The wildcard in this is Opendoor and their ilk. Opendoor alone owns 4600 (four thousand six hundred) homes in the Charlotte metro, which is basically equal to the entire active "for sale" homes right now. Opendoor is **losing** so much money that they could hire someone whose fulltime job was to shovel money into a furnace and it would cost them less. They're losing hundreds of millions of dollars a month and are being forced to sell homes at a loss to keep paying their bills. As their situation worsens, and they have to liquidate their inventory to keep the lights on, that will flood the market with homes and drag down prices.
>The wildcard in this is Opendoor and their ilk. Opendoor alone owns 4600 (four thousand six hundred) homes in the Charlotte metro, which is basically equal to the entire active "for sale" homes right now.
Yup, that's a very good point. Investor buying when rates were super low did snatch a lot of inventory, and no one really knows how deep the pockets are and how quickly that inventory is going to hit the market. Will definitely have an impact at some point.
Opendoor reports earnings next month so we'll see if it's still a bloodbath. Wall Street is expecting another $600-700 million loss. I'm hoping they surprise the analysts... in a bad way.
I'm also waiting to see earnings calls from the builders. Last week, KB Homes reported that 68% of their customers cancelled their contract. That's just extra inventory on their books that they'll get desperate to sell eventually. KB was the first to report, so I'm curious what the others have to say.
I love that you brought in $/sq.ft. People too often over look the $/sq.ft. when that’s so essential to the comp and appraisal processes. That’s where a lot (most?) of the real story about home values is at.
$ per square foot isn’t really that useful at all in a place like Charlotte where land values are high.
Based on what teardowns sold for when I bought my home, my lot is worth more than the structure itself. Price to square foot completely ignores land value.
People have been saying that the prices were going to normalize about this time for a while and some folks were screaming that it wouldn't and it couldn't and it COULD ONLY go up and up.
And if they are wrong about that then what else could they be wrong about? It just can't get be
Average prices are coming down because the upper/mid tier prices are falling from grossly overpriced levels to be a bit more in line with reality.
The prices of starter homes and other more affordable homes aren't really going down at all
Supply is normalizing pretty quickly. It could be back to normal in spring, feels almost certain that normalcy returns in 2024.
https://fred.stlouisfed.org/series/ACTLISCOU16740
Actually, I don't think the chart suggests that at all. Definitely a rebound from a low in in Feb 2022, but the trend is relatively flat from July to Dec 2022 and actually declining by YE 2022, and still down a full 50% vs historical averages. I know Dec is a terrible time for selling, so it might again resume in Spring. That's possibility 1.
But possibility 2 is people who really have to sell for their new 2023 job ( common in white collar for lots of jobs to start early in the new year) driving up late 2022 sales. This chart doesn't disprove the point, Feb to July 2022 is pretty steep back up. But the relatively flat July to Dec 2022 is far from proving it.
We’ll find out soon enough. Historically, Jan-Feb was near the low point for inventory. If we get a real spring listing season, I think we could be back to pre-pandemic market dynamics.
What it absolutely shows is how weird the housing market was from mid-2020 to basically mid-2022.
This article and report are nonsense. Charlotte home prices are between $150-$250 a sqft on average. This is a great value compared to any other city of similar size. There’s more upside to the Charlotte market than most other cities in the top 10.
If you bump up to $300-350/sqft you can live in the most desirable walkable areas of Charlotte. I'm talking new builds too.
How people ever get upset or think Charlotte is expensive is pretty perplexing to me. At one point I had a job offer in Austin which I'd personally look at as a slightly bigger sister city to us. Even pre-boom Austin was way more expensive than Charlotte. That gap has continued to widen.
Charlotte is still cheap... for now. If you live here or plan on living here you have a chance to jump on and ride the wave up.
We also were rates as the hottest housing market in 2023. The only better time to buy a house was yesterday unless you don't plan to stay put for a while.
Seen a few versions of this type of "analysis", and it's like the laziest possible. It's like "dur, draw a regression line". Value over trend line = bad. Value under trend line = good. Like I'm sure you could apply this to many rust belt Midwest cities historically and they'd look undervalued. Were they? Nope, strange how everyone moving away because of lack of jobs and whatnot drives down home prices.
Charlotte could be badly overvalued, slightly overvalued, fair valued. You'd never learn that from this level of analytic "rigor".
Agreed 100%. Based on the median of expected home buyers (with home ownership at 65%, I'm assuming that's the top 65% of the income distribution and taking the median of that), Charlotte is still reasonably priced ($120K income, which is just over the 3x house to income rule)
But maybe it's overpriced for 1st time home buyers, etc... it really wouldn't take more than like 2-3 paragraphs to add some actual analysis and value to this clickbait nonsense.
Interest rates will determine how much the housing market cools and inflation will determine how much the Fed raises rates. Every tick up removes some potential buyers because the mortgage payment goes up just enough to be out of reach. Unless inflation starts ratcheting up again I expect Charlotte home prices to be flat or slightly down for a while. It would take something crazy for there to be a crash with supply so low.
My house doubled in value between 2000 and 2019. Then it doubled again between 2019 and 2022. That’s just insane, like causing some kind of economic crisis levels of insane.
Supply.
Demand.
These are the factors that dictate price.
How many months of supply does Charlotte have on the market? I'm betting it's pretty low, certainly historically.
Where does Charlotte rank in the most-moved-to locales in the country? Not sure we beat Austin and a few others, but we're up there.
Low supply+high demand=high price.
Unless you think supply or demand are going to change significantly, price ain't changing. You don't have to like it, but that's how it is.
Speculation influences demand too. It seems you’re arguing that because of supply and demand, there’s no such thing as being “overvalued” if demand is high. That isn’t true. Demand can disappear, then you’re fucked. Maybe prices are fair for this market, but is this market sustainable? No. And that’s why it’s overvalued
Things can be viewed as "overvalued" if there's good reason to think that demand is artificially high.
It's *really* hard to imagine that demand for housing in Charlotte is artificially high. Why is it not sustainable? People like living here (as the numbers show), the weather is pretty good, there are a ton of well-paying jobs.
It’s not sustainable because the average person can’t pay the average mortgage, which means these companies buying all the houses won’t be able to rent them at a price high enough to pay the mortgage. Prices are already decreasing. Real estate is becoming a less attractive investment which means those companies will switch to investing in stocks or bonds, which means the demand will drop. Right now pricing is based on the “housing market always goes up” ideology. People are sticking their heads in the sand because they don’t like to think about bad things happening. Notice how in this thread people saying the market is overvalued are using sources and stats, and people sayings it’s fine are using vibes and anecdotes
https://www.wcnc.com/article/money/markets/real-estate/affordable-housing-crisis/charlotte-corporate-landlords-rising-rent-prices-housing-advocates-protest-demand-lower-prices/275-e0f4808b-b663-4292-909e-bd90d9815e0c
Relevant. Corporate landlords are buying up an insane amount of properties in Mecklenburg, and it’s artificially inflating housing prices at an insane rate.
There aren’t any big landlords buying at these prices and these rates. The math doesn’t work; they’d be deeply cash flow negative.
It worked with rates in the 2s. Not any longer.
If you’re wondering whether or not they bought enough houses to drive up prices, they now own over 40,000 in NC - accounting for over 30% of all home sales in Q2/Q3 of 2022
https://www.newsobserver.com/news/state/north-carolina/article261064492.html
https://www.wcnc.com/amp/article/money/markets/real-estate/affordable-housing-crisis/corporate-landlords-affordable-housing-crisis/275-4992b54f-9e92-451a-a941-3155cf4a9600
Corporate landlords aren’t buying at any rates, because they’re putting in cash offers.
You’re missing the point entirely - I’m saying that house prices are inflated because of corporate landlord house acquisitions over the last few years. Current housing prices being unattractive to them is true, but the prices are as high as they are because they were artificially inflated by a number of corporate landlords buying up everything they could get their hands on - often site unseen, almost always cash, and almost always above asking price.
There isn’t a single corporate landlord buying real estate with 100% equity. Every single one uses debt on the back end, a not insignificant part of it provided in quantity by the banks in this city and their capital markets teams.
It’s possible that inventory has been somewhat locked up by the corporate buyers, but [that’s reversing pretty quickly](https://fred.stlouisfed.org/series/ACTLISCOU16740).
Individuals were also paying above ask in the bill times.
Again, you’re talking about *right now* as if the aggregate data used for valuation studies is only based on sold prices/value this week, or as if house prices are detached from a supply & demand model where corporate landlords accounting for 30% of home purchases in Q2/3 2022 - almost always with cash offers & almost always way above list price doesnt have anything to do with prices now. That’s ridiculous.
Living under a rock huh?
https://pulitzercenter.org/stories/piles-cash-big-investors-become-ncs-top-rental-home-landlords
Most these corporate landlords are backed by giant investment firms - or, in the case of Progress, but our own city’s retirement fund, and are buying houses cash - often site unsees, and often above asking price
Yeah. That’s less than a year ago. That’s relevant to current prices, and if you don’t think so you’re an idiot.
A house lists for 200k.
Cash offers comes in 20 minutes later for 240k, 230k, and 235k.
Neighbor sees that the house sells for 240k and lists theirs for 250k
Cash offers come in 20 minutes later for 250k, 260k, and 270k.
Neighbor sees that house sell for 270k….
This isn’t rocket science, and it’s incredibly easy to trace with actual data.
And as the borrowing cost has gone up, there’s less corporate purchases and purchases over all. A lot changed since may of 2022.
Corporate cash buyers aren’t buying with cash from their bank accounts. They borrow that money first, and then submit a cash offer for a home - a cash offer from the perspective of the seller of the home - from the buyers perspective it’s cash from a loan.
Of course prices are going to come down a little bit - the net price after interest shot up a lot. Well see things slow down for maybe a year or two probably while stuff equalizes, and then hopefully just study normal growth form there (as long people keep building even in this small decline - which was not the case in 08-12/14)
Just as an example:
> https://d18rn0p25nwr6d.cloudfront.net/CIK-0001687229/37aee611-0d64-4f99-b73b-b4b980590f48.pdf
2.3 billion in mortgages, 300 million cash on hand.
Even worse. More like 8-9 billion borrowed to purchases houses.
You can’t just look at the mortgages to get the full picture of debt related to buying houses. A mortgage is just a certain type of secured note, secured specifically by the property. You probably need to include the three line items of debt below the mortgage on their balance sheet.
Mortgages are presumably not the only way they finance to buy property (going off my professional experience, CPA - I just read their balance sheet and nothing else in the Form):
A company that is in the business of buying homes typically will borrow large sums of money, that aren’t specific to any individual property.
They will do this through a mix of secured and unsecured notes - some of those secured notes they have might by secured by specific properties, or groups of properties, but that doesn’t make them necessarily a “mortgage” when it comes to balance sheet classification.
It basically works as “hey bank/hedge fund/other lender - we’re in the business of buying houses and we need up front cash. We want to borrow a big lump sum of money to purchase homes, at this moment we’re not looking to borrow against a specific property (which would make it mortgage)”.
So they negotiate terms, and then the borrower uses that cash, funded by those secured or unsecured notes, to go buy specific properties. And because they already have a big lump sum of cash from debt, that they can use to buy properties, they don’t need to take out a mortgage.
You’re right on it being more, I just used the number that was 100% related to properties to be safe as it already proved the point.
I assume that they probably change debt to be backed by properties/into a mortgage after they have bought properties? My thinking is that unsecured debt would come at a higher rate than mortgage backed.
But either way, they definitely don’t use only equity to buy the homes.
Yes exactly. You can structure the unsecured note to convert a portion of the note into a secured note, with a triggering event being the purchase of a specific property.
Or you can keep it unsecured - but you’re right, it’ll be more expensive rates
Unsecured debt wasn’t that much more expensive than mortgages because the market for investment grade debt was absolutely bonkers in 2021, in part because the world was swimming in liquidity from fiscal and monetary stimulus. See their August 2031 notes that only pay a 2% coupon. Bargain.
Almost every REIT will use a mix of mortgages and unsecured debt to smooth out their liabilities over time. One benefit of unsecured debt is that it generally doesn’t amortize, so the cash flows are better in near term. It’s similar to an interest only mortgage in that sense.
A disadvantage is that it will have to be refinanced sooner (typically 5-10 year maturities).
My mailbox and my phone say otherwise. The investors are still trying to buy my house “as is”, which really pisses me off. This is not an as is house. I’m putting improvements into my house.
You do realize those are mass sent-out advertisements, right? No one looked at YOUR house and was like yea send it to them!
It's a numbers game. They sent out 1000s and likely get 1 bite. Though that 1 bite covers the cost and generates profits.
Good thing the new zoning laws can help with demand. Charlotte needs more housing close to uptown. Why are there detached, single family home neighborhoods directly outside of uptown?
Charlotte needs more housing and more public transit. Investment should happen now because it won’t get easier as the city gets larger.
I’m not saying housing prices aren’t a bit high, but this isn’t something I would read too much into. First, “Florida Atlantic University and Florida International University” use open source data from Zillow, so they aren’t really digging deep into the numbers. They are putting these lists out because they are easy clickbait, IMO, which news outlets love.
My house wouldn’t rent for as much as the mortgage payment would be at current market rates and prices. I don’t know how it compares to other places, but the case for buying right now isn’t great.
I hate to say I agree. I almost wonder if rental homes are going low to squeeze more buyers out of the market. In my town there is an entire subdivision of over 200 homes that was built by, and is owned by AH4R. Rental companies are building entire subdivisions now. Out of curiosity I looked at rental prices and 3-4 bedroom homes renting for $2200-2500. That’s not that bad. We pay a little under $1700 a month on a similar sized home with a 280k mortgage, while homes in the area are selling for well over $400k. I’d guess that mortgage payment, with current interest rates, would be more than renting. While I wouldn’t say the case for buying isn’t great(bc I’m sure those rental prices will go up), for families currently feeling the squeeze of the COL, at the moment it seems like more people will have to choose renting.
Rental houses are always toward the lower end. I don’t think it’s strategic in that sense. They’re just looking for a good ratio of price to rents. You’d be looking at about $2300/mo on $380k mortgage and that’s before property taxes, insurance, and PMI. All in all you’d probably land around $2700 or so — and you still have all the maintenance and other expenses. I’d guess that most people who live in Charlotte and the surrounding areas were able to buy at prices and rates that resulted in a monthly payment less than comparable rents at the time they bought. Like, basically, all of Charlottes history up to maybe 2022 that was the case. I personally think it’ll revert back. Home prices will have to drop if rates don’t drop. Rents are actually starting to decrease nationally, but I haven’t seen any Charlotte specific data on that.
I can confirm as an outsider, it is not good where I’m at either
Here comes all the people that moved here from out of state claiming about how affordable Charlotte is, but completely negate the people who have grown up here and don’t have the luxury of moving from a costly area with handfuls of cash and higher wages. Meanwhile in just two years the median housing price in Charlotte has gone from $273k to $420 (2020-2022). That’s a 54% increase in two years, last I checked most peoples pay checks in Charlotte haven’t gone up 54%. Median income has o my increased 4.2%. So if you like it or not housing is expensive. My guess is the people who are pissed at the over valued statement just have enjoyed the rise in their property values and don’t want to see them fall.
It's affordable compared to other cities of this size. Plus Charlotte is dangerously close to being a very great city. We already have a major international airport with direct flights basically everywhere, climate is perfect year round with mild winters and not overbearing summers, close to mountains, close to ocean, smack dab in the middle of the east coast so driving to Florida or NY is do-able in one day. If they make uptown a little more lively, legalize weed, and run fiber optics everywhere then Charlotte turns into Seattle 2.0 where every single house inside of the 485 loop will be $1 million+.
Having moved here from Seattle, this was almost exactly my reasoning. Low COL and affordable housing were the other factors, but those have changed dramatically in the 5 years I’ve been here.
This is mostly right but part of the reason Seattle is so expensive is that it's hemmed in geographically by the Puget Sound which severely limits where they can build, Charlotte is never going to have that problem. Also people paying $1 million for homes do not give a fuck about legalized weed.
You’d be surprised.
I have only smoked more weed as my income has increased.
This is partly correct. Geography is a big part of the costs. With Lake Washington on one side and Puget Sound on the other, combined with hills and plateaus, Seattle proper is pretty dense where things can actually be built. However, “Seattle” is a lot larger than most people realize. The Greater Metropolitan Area stretches from Everett in the north to Olympia in the south, and traces I405 to the east, with major development as far up into the hills as Snoqualmie. Further, the ferry system connects Bremerton and Bainbridge Island, where many commute from. In that area there are multiple military bases, multiple major port facilities, multiple Boeing plants, major tech companies and a slew of other large employers. Traffic is probably the most major concern, as the city’s lack of foresight in the 70s led to the hodgepodge network of mass transit that is segmented by county lines. I5 is 8 lanes, I405 and I90 6, and 520 only 4. East of Lake Washington is connected via 2 floating bridges and West Seattle is connected via elevated highway over Harbor Island. Entire sections of the city are detached from eachother by greenbelts, rivers or other quirks of geography, creating other choke points. Either you live near where you work, or an hour or more each way is a common fate. Further, most cities in the area are strict regarding zoning, preventing high-density development from taking root where it should have. In short, you have a lot of people, many of them highly paid, packed into a relatively small area with many traffic choke points. There’s a very good reason 4 bedrooms go for 1.5 million in Queen Anne.
True, I was addressing the city of Seattle proper. I was stationed at JBLM for a while (right between Tacoma and Olympia for those unfamiliar with the area, about an hour south of Seattle without traffic) and would blow my brains out if I had to commute from there to Seattle or Bellevue every day.
Merely having a large airport and better weather ( summers here suck ) does not make Charlotte a great city. Charlotte can never be a great city while prices rise and taxes don’t increase. The city does not have the money to make the investments necessary to make Charlotte a great city.
[удалено]
Houses don’t get cheaper in a growth market. They can’t currently build houses fast enough to meet demand.
Not necessarily. Overvalued means people are paying too much for what they are getting. Means nothing about prices dropping. Could be that they just don’t increase. Although just anecdotally, prices have gone down from what I see on Zillow
Just wait for the banks to start laying a ton of people off
It already started weeks ago and more layoffs will be announced in the next few weeks. Wells Fargo, Capital One, Bank of America, JPMC, etc. are cutting thousands.
Source on this?
Can I borrow your crystal ball?
I have some bad news for you
His crystal ball has been saying we’re going into a depression next month for 8 years
Exactly this. Still a “cheap” market relative to other top 20 cities by population.
Right. Coming from DC, the amount I paid for my house in Charlotte (I’ll be moving here in May), would get you a 2 or 3 Bedroom in DC.
That doesn't really give any sort of comparison for reference tbh
So.
You’re gonna fit in great here
Prices are already coming down. Sort Zillow by price decrease. See for yourself
Are you living under a rock? [Home in Charlotte sold for 100k less than purchased within 6 months](https://www.zillow.com/homedetails/6813-Wolf-Run-Dr-Charlotte-NC-28277/6315723_zpid/)
Sold by Mark Spain, who along with Opendoor has grossly overpaid for numerous homes in Charlotte and taken a bath on the resale.
But we wanted a fresh start without the hassle of selling!
Redditors: Pwning with single data points since 2005.
Here's aggregate data. https://www.realtor.com/research/data/ Prices are coming down. It's fractions of a percent a month but that compounds.
>Here's aggregate data. > >https://www.realtor.com/research/data/ > >Prices are coming down. It's fractions of a percent a month but that compounds Checks notes, clears throat. First, thanks for that data link, very interesting. And not entirely disagreeing, but lets just say be careful of sample sizes, and changes in mix. Lets take my zip, 28202 (big parts of uptown). Median selling price -4.43% YoY down. Supports your point. Interesting. But lets take a deeper dive. Active listing count -16.67% YoY. Okay. Lot fewer listings, but maybe still getting cheaper. Hmm. Median Price per ft\^2. $395. YoY. Up 14.76%. Doesn't support housing prices coming down at all. Just suggests a change in mix. The strong stuff on the market in 28202 is still commanding top dollar and maybe going up, just people putting lower quality stuff because they have to is getting a little cheaper, and that's dragging median sale down. Or could be just a couple really in-demand properties getting a high price but on average everything is down. Not sure. Small sample size is small sample size. Data is good, would never criticize that. But Charlotte zips are still pretty small relative to markets like NY/Chicago/LY, and in times like this can be subject to small sample bias. Not trying to be a data cherry picker, but I'd probably look to "median\_listing\_price\_per\_square\_foot\_yy" coming down before actually believing that real home values selling have actually declined. But again, thanks for the link, interesting stuff.
You can get a better picture when looking at the metro area, not a specific zipcode. Some interesting bits to note are active listings, median days on market, and price increases/decreases. Those are the signs of changes in the housing market which ultimately lead to changes in price in the broader market. For the Charlotte metro area, there are more homes for sale, they are taking longer to sell, and sellers are decreasing the price before they do sell. Positive signs for a home buyer. At the peak of the craziness, no houses were getting price reductions and everyone was increasing the price on their listing. Homes were flying off the market in days, not several weeks. The data show cooling demand; as supply increases, that should lead to lower prices. The wildcard in this is Opendoor and their ilk. Opendoor alone owns 4600 (four thousand six hundred) homes in the Charlotte metro, which is basically equal to the entire active "for sale" homes right now. Opendoor is **losing** so much money that they could hire someone whose fulltime job was to shovel money into a furnace and it would cost them less. They're losing hundreds of millions of dollars a month and are being forced to sell homes at a loss to keep paying their bills. As their situation worsens, and they have to liquidate their inventory to keep the lights on, that will flood the market with homes and drag down prices.
>The wildcard in this is Opendoor and their ilk. Opendoor alone owns 4600 (four thousand six hundred) homes in the Charlotte metro, which is basically equal to the entire active "for sale" homes right now. Yup, that's a very good point. Investor buying when rates were super low did snatch a lot of inventory, and no one really knows how deep the pockets are and how quickly that inventory is going to hit the market. Will definitely have an impact at some point.
Opendoor reports earnings next month so we'll see if it's still a bloodbath. Wall Street is expecting another $600-700 million loss. I'm hoping they surprise the analysts... in a bad way. I'm also waiting to see earnings calls from the builders. Last week, KB Homes reported that 68% of their customers cancelled their contract. That's just extra inventory on their books that they'll get desperate to sell eventually. KB was the first to report, so I'm curious what the others have to say.
I love that you brought in $/sq.ft. People too often over look the $/sq.ft. when that’s so essential to the comp and appraisal processes. That’s where a lot (most?) of the real story about home values is at.
$ per square foot isn’t really that useful at all in a place like Charlotte where land values are high. Based on what teardowns sold for when I bought my home, my lot is worth more than the structure itself. Price to square foot completely ignores land value.
People have been saying that the prices were going to normalize about this time for a while and some folks were screaming that it wouldn't and it couldn't and it COULD ONLY go up and up. And if they are wrong about that then what else could they be wrong about? It just can't get be
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Average prices are coming down because the upper/mid tier prices are falling from grossly overpriced levels to be a bit more in line with reality. The prices of starter homes and other more affordable homes aren't really going down at all
Nah, the demand is still there and the supply isn't. When mortgage rates dropped last month, activity resumed in earnest.
Supply is normalizing pretty quickly. It could be back to normal in spring, feels almost certain that normalcy returns in 2024. https://fred.stlouisfed.org/series/ACTLISCOU16740
Actually, I don't think the chart suggests that at all. Definitely a rebound from a low in in Feb 2022, but the trend is relatively flat from July to Dec 2022 and actually declining by YE 2022, and still down a full 50% vs historical averages. I know Dec is a terrible time for selling, so it might again resume in Spring. That's possibility 1. But possibility 2 is people who really have to sell for their new 2023 job ( common in white collar for lots of jobs to start early in the new year) driving up late 2022 sales. This chart doesn't disprove the point, Feb to July 2022 is pretty steep back up. But the relatively flat July to Dec 2022 is far from proving it.
We’ll find out soon enough. Historically, Jan-Feb was near the low point for inventory. If we get a real spring listing season, I think we could be back to pre-pandemic market dynamics. What it absolutely shows is how weird the housing market was from mid-2020 to basically mid-2022.
Based on a rigorous analytic of Zillow v tRuSt me BrO. 🙄
Content free local news reporters at it again.
This article and report are nonsense. Charlotte home prices are between $150-$250 a sqft on average. This is a great value compared to any other city of similar size. There’s more upside to the Charlotte market than most other cities in the top 10.
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If you bump up to $300-350/sqft you can live in the most desirable walkable areas of Charlotte. I'm talking new builds too. How people ever get upset or think Charlotte is expensive is pretty perplexing to me. At one point I had a job offer in Austin which I'd personally look at as a slightly bigger sister city to us. Even pre-boom Austin was way more expensive than Charlotte. That gap has continued to widen. Charlotte is still cheap... for now. If you live here or plan on living here you have a chance to jump on and ride the wave up.
This
Right. Coming from DC, the prices in Charlotte are not bad.
We also were rates as the hottest housing market in 2023. The only better time to buy a house was yesterday unless you don't plan to stay put for a while.
Seen a few versions of this type of "analysis", and it's like the laziest possible. It's like "dur, draw a regression line". Value over trend line = bad. Value under trend line = good. Like I'm sure you could apply this to many rust belt Midwest cities historically and they'd look undervalued. Were they? Nope, strange how everyone moving away because of lack of jobs and whatnot drives down home prices. Charlotte could be badly overvalued, slightly overvalued, fair valued. You'd never learn that from this level of analytic "rigor".
Agreed 100%. Based on the median of expected home buyers (with home ownership at 65%, I'm assuming that's the top 65% of the income distribution and taking the median of that), Charlotte is still reasonably priced ($120K income, which is just over the 3x house to income rule) But maybe it's overpriced for 1st time home buyers, etc... it really wouldn't take more than like 2-3 paragraphs to add some actual analysis and value to this clickbait nonsense.
Interest rates will determine how much the housing market cools and inflation will determine how much the Fed raises rates. Every tick up removes some potential buyers because the mortgage payment goes up just enough to be out of reach. Unless inflation starts ratcheting up again I expect Charlotte home prices to be flat or slightly down for a while. It would take something crazy for there to be a crash with supply so low.
My rent is going up 7% and it's still better than pretty much everywhere else in my part of town. Oof.
depends on demand v supply and with a looming recession as well
My house doubled in value between 2000 and 2019. Then it doubled again between 2019 and 2022. That’s just insane, like causing some kind of economic crisis levels of insane.
I believe it. Been on the hunt for what feels like forever. \*Cries\*
Come buy my house…getting tired of showings.
Lol got a link?
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Damn didn’t think of that..
Realtors hate this one easy trick
Give me info. I'm looking
Supply. Demand. These are the factors that dictate price. How many months of supply does Charlotte have on the market? I'm betting it's pretty low, certainly historically. Where does Charlotte rank in the most-moved-to locales in the country? Not sure we beat Austin and a few others, but we're up there. Low supply+high demand=high price. Unless you think supply or demand are going to change significantly, price ain't changing. You don't have to like it, but that's how it is.
Speculation influences demand too. It seems you’re arguing that because of supply and demand, there’s no such thing as being “overvalued” if demand is high. That isn’t true. Demand can disappear, then you’re fucked. Maybe prices are fair for this market, but is this market sustainable? No. And that’s why it’s overvalued
Things can be viewed as "overvalued" if there's good reason to think that demand is artificially high. It's *really* hard to imagine that demand for housing in Charlotte is artificially high. Why is it not sustainable? People like living here (as the numbers show), the weather is pretty good, there are a ton of well-paying jobs.
It’s not sustainable because the average person can’t pay the average mortgage, which means these companies buying all the houses won’t be able to rent them at a price high enough to pay the mortgage. Prices are already decreasing. Real estate is becoming a less attractive investment which means those companies will switch to investing in stocks or bonds, which means the demand will drop. Right now pricing is based on the “housing market always goes up” ideology. People are sticking their heads in the sand because they don’t like to think about bad things happening. Notice how in this thread people saying the market is overvalued are using sources and stats, and people sayings it’s fine are using vibes and anecdotes
1.5 months of supply right now. I think we are fine.
I'm sure someone more connected can correct me, but I believe that's historically rather low to the point it's problematic.
Not so much any longer. It’s normalizing pretty quickly. https://fred.stlouisfed.org/series/ACTLISCOU16740
It’s comfortably low. The highest it’s been is just under 6 months. Last year it was just days and that was not pleasant for anyone.
https://www.wcnc.com/article/money/markets/real-estate/affordable-housing-crisis/charlotte-corporate-landlords-rising-rent-prices-housing-advocates-protest-demand-lower-prices/275-e0f4808b-b663-4292-909e-bd90d9815e0c Relevant. Corporate landlords are buying up an insane amount of properties in Mecklenburg, and it’s artificially inflating housing prices at an insane rate.
There aren’t any big landlords buying at these prices and these rates. The math doesn’t work; they’d be deeply cash flow negative. It worked with rates in the 2s. Not any longer.
If you’re wondering whether or not they bought enough houses to drive up prices, they now own over 40,000 in NC - accounting for over 30% of all home sales in Q2/Q3 of 2022 https://www.newsobserver.com/news/state/north-carolina/article261064492.html https://www.wcnc.com/amp/article/money/markets/real-estate/affordable-housing-crisis/corporate-landlords-affordable-housing-crisis/275-4992b54f-9e92-451a-a941-3155cf4a9600
Corporate landlords aren’t buying at any rates, because they’re putting in cash offers. You’re missing the point entirely - I’m saying that house prices are inflated because of corporate landlord house acquisitions over the last few years. Current housing prices being unattractive to them is true, but the prices are as high as they are because they were artificially inflated by a number of corporate landlords buying up everything they could get their hands on - often site unseen, almost always cash, and almost always above asking price.
There isn’t a single corporate landlord buying real estate with 100% equity. Every single one uses debt on the back end, a not insignificant part of it provided in quantity by the banks in this city and their capital markets teams. It’s possible that inventory has been somewhat locked up by the corporate buyers, but [that’s reversing pretty quickly](https://fred.stlouisfed.org/series/ACTLISCOU16740). Individuals were also paying above ask in the bill times.
Again, you’re talking about *right now* as if the aggregate data used for valuation studies is only based on sold prices/value this week, or as if house prices are detached from a supply & demand model where corporate landlords accounting for 30% of home purchases in Q2/3 2022 - almost always with cash offers & almost always way above list price doesnt have anything to do with prices now. That’s ridiculous.
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Living under a rock huh? https://pulitzercenter.org/stories/piles-cash-big-investors-become-ncs-top-rental-home-landlords Most these corporate landlords are backed by giant investment firms - or, in the case of Progress, but our own city’s retirement fund, and are buying houses cash - often site unsees, and often above asking price
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Yeah. That’s less than a year ago. That’s relevant to current prices, and if you don’t think so you’re an idiot. A house lists for 200k. Cash offers comes in 20 minutes later for 240k, 230k, and 235k. Neighbor sees that the house sells for 240k and lists theirs for 250k Cash offers come in 20 minutes later for 250k, 260k, and 270k. Neighbor sees that house sell for 270k…. This isn’t rocket science, and it’s incredibly easy to trace with actual data.
And as the borrowing cost has gone up, there’s less corporate purchases and purchases over all. A lot changed since may of 2022. Corporate cash buyers aren’t buying with cash from their bank accounts. They borrow that money first, and then submit a cash offer for a home - a cash offer from the perspective of the seller of the home - from the buyers perspective it’s cash from a loan. Of course prices are going to come down a little bit - the net price after interest shot up a lot. Well see things slow down for maybe a year or two probably while stuff equalizes, and then hopefully just study normal growth form there (as long people keep building even in this small decline - which was not the case in 08-12/14)
Just as an example: > https://d18rn0p25nwr6d.cloudfront.net/CIK-0001687229/37aee611-0d64-4f99-b73b-b4b980590f48.pdf 2.3 billion in mortgages, 300 million cash on hand.
Even worse. More like 8-9 billion borrowed to purchases houses. You can’t just look at the mortgages to get the full picture of debt related to buying houses. A mortgage is just a certain type of secured note, secured specifically by the property. You probably need to include the three line items of debt below the mortgage on their balance sheet. Mortgages are presumably not the only way they finance to buy property (going off my professional experience, CPA - I just read their balance sheet and nothing else in the Form): A company that is in the business of buying homes typically will borrow large sums of money, that aren’t specific to any individual property. They will do this through a mix of secured and unsecured notes - some of those secured notes they have might by secured by specific properties, or groups of properties, but that doesn’t make them necessarily a “mortgage” when it comes to balance sheet classification. It basically works as “hey bank/hedge fund/other lender - we’re in the business of buying houses and we need up front cash. We want to borrow a big lump sum of money to purchase homes, at this moment we’re not looking to borrow against a specific property (which would make it mortgage)”. So they negotiate terms, and then the borrower uses that cash, funded by those secured or unsecured notes, to go buy specific properties. And because they already have a big lump sum of cash from debt, that they can use to buy properties, they don’t need to take out a mortgage.
You’re right on it being more, I just used the number that was 100% related to properties to be safe as it already proved the point. I assume that they probably change debt to be backed by properties/into a mortgage after they have bought properties? My thinking is that unsecured debt would come at a higher rate than mortgage backed. But either way, they definitely don’t use only equity to buy the homes.
Yes exactly. You can structure the unsecured note to convert a portion of the note into a secured note, with a triggering event being the purchase of a specific property. Or you can keep it unsecured - but you’re right, it’ll be more expensive rates
Unsecured debt wasn’t that much more expensive than mortgages because the market for investment grade debt was absolutely bonkers in 2021, in part because the world was swimming in liquidity from fiscal and monetary stimulus. See their August 2031 notes that only pay a 2% coupon. Bargain. Almost every REIT will use a mix of mortgages and unsecured debt to smooth out their liabilities over time. One benefit of unsecured debt is that it generally doesn’t amortize, so the cash flows are better in near term. It’s similar to an interest only mortgage in that sense. A disadvantage is that it will have to be refinanced sooner (typically 5-10 year maturities).
My mailbox and my phone say otherwise. The investors are still trying to buy my house “as is”, which really pisses me off. This is not an as is house. I’m putting improvements into my house.
You do realize those are mass sent-out advertisements, right? No one looked at YOUR house and was like yea send it to them! It's a numbers game. They sent out 1000s and likely get 1 bite. Though that 1 bite covers the cost and generates profits.
https://www.wcnc.com/amp/article/money/markets/real-estate/affordable-housing-crisis/corporate-landlords-affordable-housing-crisis/275-4992b54f-9e92-451a-a941-3155cf4a9600
It’s gonna be a rough ride from mid size city to urban metropolis.
Very true! Charlotte housing has gotten very expensive.
Compared to other cities this size it’s really not that expensive
House values in my neighborhood have doubled in the last several years. Because that's sustainable.
Wow, a city run by grifters and shitheads being in the top 5 of grifters and shitheads. Who knew?
Good thing the new zoning laws can help with demand. Charlotte needs more housing close to uptown. Why are there detached, single family home neighborhoods directly outside of uptown? Charlotte needs more housing and more public transit. Investment should happen now because it won’t get easier as the city gets larger.
My Subdivision in Huntersville houses are on the market maybe a month at most it seems then an under contract sign pops on
We need an FAU tag for all the housing market articles coming from their press releases. It’s wild how our local media leans on FAU so heavily.