In a follow-up to yesterday’s post, I did some analysis on the data to understand really what we are up against in terms of the supply and demand for condos. Here is what I found.
Currently, in Uptown, there are 205 condos and townhouses listed in MLS, 4 at the VUE Charlotte. If we add 380 units at the VUE (assuming 20 pre-sales actually close and the rest go into inventory), we now have 585 units available for sale.
If we took last month’s sales (6) and divide it into 585 units it would take 8 years to sell this inventory and that’s assuming no other condo units come onto the market. If we look at the last quarter, rather than last month, the sales rate averaged about 9 condos per month. At this sales rate, and assuming no other condos coming onto the market, it would take 5+ years to sell this inventory.
We can quibble about the numerator and the denominator, and we can debate how many pre-sales may actually close, but the bottom line is there is too much supply, too little demand, and real estate sales trends are still headed down, not up. When you combine this with a contract price that will be in many instances way over current market value, your final result is a devastating financial equation.
This dire situation is now well-understood in the real estate community, and while many I talked to initially wished for the VUE Charlotte to be a success, I am sorry to tell you the talk by some is now turning to how soon before it fails.
What do you think? Is it too early to speculate that the VUE Charlotte is on the financial ropes? Have I been frequenting too many Uptown bars? Is the fact that, as of yesterday, only 2 closings at the VUE appearing in the public records not a statistic to be concerned about? Share your thoughts in a comment or over email to firstname.lastname@example.org.