As I reflect on the truly devastating ramifications of appraisals coming in well below contract prices, it saddens me that all of us: the pre-sales buyers, the Uptown Charlotte real estate community, and MCL are in the position we are in. As you may have guessed, I am in NO WAY OUT mode, and that goes for all parties in this transaction.
As I hear from pre-sales buyers through email at firstname.lastname@example.org, I get the idea that at least some of the buyers were well aware of the precariousness of their investment and tried to get out. By all accounts, MCL would not allow them to do so. I have no idea how prevalent this was, and how many buyers were pushing them to be released from their contract. But that is the one potential area where I can blame MCL for the predicament we are all now in. If they had a sizeable number of buyers that wanted out, that could have been probably the one and only sign that I know of that the building of the Vue was not a good idea.
You may have read in the paper that MCL felt like the units would appraise. This would lead me to believe that MCL truly felt like by the time the Vue Charlotte was finally constructed, the market would be turning back up and the investment would work out. This turns out to have been wishful thinking, and it may have horrendous consequences for them and us.
There is no doubt that had the market been booming as it was in mid-2000, we wouldn’t have this blog and we wouldn’t be digging into every nook and cranny of MCL and the Vue Charlotte construction. I fully admit that. But there is one talking point that I have heard from the Vue Charlotte that I find completely unpersuasive.
What has been reported to me is that they are telling some customers in loose translation: “Well, if prices had gone up instead of down, would you have let us cancel your contract so we could re-sell your unit at a higher price?”
We bought at pre-construction prices. We bought on the EXPECTATION that prices would rise and we were getting in on the ground floor of a rising investment opportunity. That was actually one of their selling points: ‘buy now before prices go up. Get in on the ground floor.’
If we hadn’t thought that prices would continue their climb upward most would never have bought. I know I wouldn’t have. Why take the risk on a pre-construction project otherwise? If you didn’t think prices would rise, it would clearly be more prudent to wait and buy once the project was done. So this talking point holds no credence with me.
Having said all this, I do not blame MCL or us for this predicament. It is just terrible bad luck for all of us. How do we dig ourselves out of this financial hole we are in…MCL and the pre-sales buyers? I am looking for ideas. I simply hope that we don’t resort to bringing out the worst in all of us: lawsuits and counter-lawsuits. I beg MCL and their lenders if they can find a way to do it to not take us there.
Do you have an opinion on this? Do you think MCL could have known this was a risky project and could have decided not to build? Please share it in a comment or send an email to email@example.com.