Sun, 13 September 2015
These are snippets from years and years ago...could be history repeats itself?
Even though the Charlotte area apartment market is overbuilt now, real estate experts say the cycle eventually turns and the supply tightens.
Some local developers are reluctant to jump on the conversion bandwagon. They remember how quickly conditions can change.
The city experienced a conversion boom in the 1970s and 1980s that went bust after developers put too many units on the market at once, depressing sale prices and eroding resale value.
"The condo market really hadn't matured then," Martin said. "Demand was satisfied rather quickly in a limited market."
With a surge of empty nesters seeking to downsize and more young professionals entering the market, experts see this trend continuing -- at least as long as mortgage rates remain relatively low.
Apartment owners and investors pay close attention when property values rise in desirable neighborhoods near one of their complexes.
That's an important cue that the time might be right for converting rental units to for-sale condos. They compare current value with conversion value and determine how much to charge for a condo to make a profit.
Some do extensive renovations to buildings and grounds, adding such amenities as granite countertops and hardwood floors, while others simply repair, repaint and install fresh carpeting.
When renters are notified of a conversion and given an opportunity to buy their units, developers say most prefer to vacate. Some converters allow tenants to remain during the initial stages of renovation as units are completed a section at a time.
Condo buyers get the investment and tax advantages of home ownership, often for monthly payments similar to what they were charged for rent.