Christmastime in Charlotte Real Estate: You May Be Sorta Rich

 

“Holy Moley!  I’m sorta rich!”

(Long-time Charlotte real estate investor)

 

I was surfing the Charlotte MLS doing some “research” this morning (aka wasting time looking at home values in neighborhoods I’ve worked in) and was truly amazed.  I can’t believe how much Charlotte properties have shot up in value in terms of both rental and sale prices!

 

Here is some background on where I’m coming from.  I started working in Charlotte real estate in 2003 and saw a hot market until about midway through 2007 when the mortgage market (and our economy) was decimated.  This caused home and rental prices to drop until there was a market resurgence 5 years later in 2013.  Rental and sales prices have been on a consistent upwards trajectory since then.

 

However, even before 2008, relatively inexpensive Charlotte investment opportunities were abundant.  What did you want?  “Starter homes” from $80-$120K were plentiful, but so were tons of homes in less desirable areas that could be had for $10K – $60K.   And then in a bad market from 2008-2012, really great deals were there for the taking if you had money and really good credit.

 

When I look at the market now in 2017, all of the Starter homes have climbed to $150K+ and they all rent north of $1K.  The $10K – $60K home market is gone. When I searched for those houses in the MLS today, there were 6 available (the lowest being around $40K and all being sold “as-is”- likely meaning they need a lot of rehab).   There are only two (2!) rental homes under $900 available in Charlotte as of this writing.  So putting two and two together, these formerly valued homes of $10-$60K are probably now renting for over $900/month.  Hmmm…

 

For full disclosure, I am only using data from the Charlotte Multiple Listing Service (CMLS); I’m sure there are many houses that are for rent that do not list them on CMLS.  But the 7,000+ Realtors in Charlotte do list their properties on it, so it is a good (and regularly cited) source of information.  And the numbers I listed are for the City of Charlotte only and not the surrounding towns which would add some additional lower cost housing supply.

 

But still…

 

Only five years ago, I remember seeing several Charlotte houses in the $10K range; some of which were in the now hot “North End” district.  I had people wanting to sell some 2 BR/2 BA condos for $30K that were 5 minutes out of Uptown Charlotte.  I was “too savvy” of an investor to go for those deals!

 

Now you are a winner if you bought at those prices.  If you are holding them, you’ve got a nice equity build up and a great rental cash flow.  And if you sold them, you made a nice chunk of change.  Well done!

 

In conclusion, if you bought any real estate in Charlotte prior to 2013, you may want to take a fresh look at your portfolio.  You may be sorta rich.

 

Merry Christmas & Happy Landlording!