Downtown condos

[mikeb77]

For those of you that are interested in the new downtown condo movement, how do you feel about this from an investement standpoint? Do you feel lke you'll get a good return in the years to come, or are you afraid that the market will get oversaturated?

[CK1]

For those of you that are interested in the new downtown condo movement, how do you feel about this from an investement standpoint? Do you feel lke you'll get a good return in the years to come, or are you afraid that the market will get oversaturated?

Personally, I would like to purchase a place downtown, but instead I am going to buy a home (still within city limits) due to the reasons you stated above, as well as the high price-point of downtown condos. At this point, the convenience of living downtown does not outweigh the cost of doing so. Also, it would be hard for me to rationalize purchasing a 2bd 2ba condo for $250,000 with the intention of selling it in two years (or even five for that matter) for $300,000. IMO, it just isn't going to happen.

[tamias6]

For those of you that are interested in the new downtown condo movement, how do you feel about this from an investement standpoint? Do you feel lke you'll get a good return in the years to come, or are you afraid that the market will get oversaturated?

I think what would help the market is this. Most of the condos being built in and around DT are catering to "Young Professionals", people that are single or just married, affluent, and want a hip urban life style. However what is going to happen to these young professionals when they have kids and need a good school along with a "safe quiet place with room to run around and play" to rise the family? Its off to the suburbs they go. This will leave all of these condos high and dry. But if developers included town homes or row houses with 3 bedrooms, a family room, large kitchen and a private yard or at least a park like commons area with play equipment and priced units to compete with subdivisions, then city life would be tempting to families. However the ability for a city to revive its school system from typical inner city school problems would play a big factor here.

[DwntwnGeo]

I think what would help the market is this. Most of the condos being built in and around DT are catering to "Young Professionals", people that are single or just married, affluent, and want a hip urban life style. However what is going to happen to these young professionals when they have kids and need a good school along with a "safe quiet place with room to run around and play" to rise the family? Its off to the suburbs they go. This will leave all of these condos high and dry. But if developers included town homes or row houses with 3 bedrooms, a family room, large kitchen and a private yard or at least a park like commons area with play equipment and priced units to compete with subdivisions, then city life would be tempting to families. However the ability for a city to revive its school system from typical inner city school problems would play a big factor here.

I wouldn't say the condos being built will be "high and dry" as you put it. Granted there will be a certain percetage the will want to have children and move out to the burbs, but at the same time there are people, married and single that choose not to have children. There are also people that have lived out in the burbs to raise their families and the children have grown and gone and now the parents would like to have a more downtown style of living. Also as people move out to the burbs there will be newer young professionals to take their place. There are parks and green spaces still around the downtown area that people can walk to and visit. Not everything has to be in ones backyard

[twoshort]

Clearly this is the million dollar question...

or at least the $20k question.

[concretepoem]

I wouldn't say the condos being built will be "high and dry" as you put it. Granted there will be a certain percetage the will want to have children and move out to the burbs, but at the same time there are people, married and single that choose not to have children. There are also people that have lived out in the burbs to raise their families and the children have grown and gone and now the parents would like to have a more downtown style of living. Also as people move out to the burbs there will be newer young professionals to take their place. There are parks and green spaces still around the downtown area that people can walk to and visit. Not everything has to be in ones backyard

A great city combines density with open public parks, squares and playgrounds. Nobody in Manhattan has a backyard. They've got Central Park, Union Square, and hundreds of 'vest-pocket parks'. The downtown area of GR, especially on the eastside of the river, needs a central park. Last week's thread Calder plaza, and it's failed 1960's era architecture and design...I say level it and plant grass.

[mikeb77]

I guess my (admittedly uneducated) initial impression is that in all likelihood with the med school, medical buildings, more companies moving downtown, etc that I'll probably be safe thinking I won't make less on a condo than I will on my current SE Grand Rapids house.

[Sunlover38]

I think what would help the market is this. Most of the condos being built in and around DT are catering to "Young Professionals", people that are single or just married, affluent, and want a hip urban life style. However what is going to happen to these young professionals when they have kids and need a good school along with a "safe quiet place with room to run around and play" to rise the family? Its off to the suburbs they go. This will leave all of these condos high and dry.

As they run off to the burbs there are other younger people growing up & taking their place . . . hopefully only a turn-over of the condos to new younger folks . . not empty condos. . . . .

[GRDadof3]

I think the banks and investment community do a good job of gate-keeping which projects should be built and which ones are just a developer's whim. We're not exactly a condo-flippers haven of a market, so I would guess most condo sales downtown are pretty solid.

I do however think that more concentration is going to be centered around smaller neighborhood-sized multi-family projects. Ones that are close to small business districts, as opposed to downtown. Available land downtown is scarce and prices are heating up, forcing potential lower end buyers and small-time developers out of these markets. I think this will be the new trend around the country in ten years, as opposed to downtown high-rises. That does bode well from an investment standpoint for downtown, because it will eventually become cost-prohibitive for a lot of new projects.

Keep in mind that even in Grand Rapids, for every 1 condo planned for downtown, there are 10 - 20 homes planned to be built in the surrounding burbs. I don't think that it is near saturation.

Or I could be full of it.

[michaelskis]

There is a factor that I think many are forgetting about. While yes there are a lot of young professionals buying them up and moving into downtown, and more will arrive with the new medical school, there is a whole other demographic that is also taking advantage of it.

The baby boomer generation is just now starting to retire and these empty nesters with large homes in the burbs are starting sell off their land and move into the city. I know that my building is a good mix between Young Professionals and Empty Nesters who are in all respects are looking for the exact same thing. Amenities such as not having to mow lawns, shovel side walks, make exterior repairs, or head to the city for dinner, a game, or just to hang out. Grand Rapids is well on its way to encourage both groups to move into downtown. Some have businesses downtown, others just like the city.

[concretepoem]

...there is a whole other demographic that is also taking advantage of it.....The baby boomer generation is just now starting to retire and these empty nesters with large homes in the burbs are starting sell off their land and move into the city. I know that my building is a good mix between Young Professionals and Empty Nesters who are in all respects are looking for the exact same thing. Amenities such as not having to mow lawns, shovel side walks, make exterior repairs, or head to the city for dinner, a game, or just to hang out. Grand Rapids is well on its way to encourage both groups to move into downtown. Some have businesses downtown, others just like the city.

Agreed. I see it in parts of Eastown, even...Empty nester baby boomers who've left life east of the Beltine behind to return to city life. They still prefer a single family home, not a condo, but a smaller home with stuff you don't get with most downtown condos... a garden, a front porch, and close at hand storage space. Those 55-70 year olds have a choice now in GR, and I think you'll see the trend continue of empty nesters buying in the city, either downtown condos, or single family homes in the more walkable neighborhoods like Fulton Heights, Eastown and East Hills. I do think there's a market for townhomes, what the recently departed Second Story developer seems to be planning next. The number of bedrooms is an issue, old or young. For empty nesters, there's often a desire for a third bedroom...one for themselves, one as an office, the third for guests and grandkid visits. Is either a good investment? It really depends on how long you hold on to it...anything under 7-10 years and it's probably not 'investment grade' real estate, with a ROI better than long term CDs. I don't expect much appreciation in condo prices in GR...not enough to make paying the association fees worth it.

[Budgie Frisket]

Agreed. I see it in parts of Eastown, even...Empty nester baby boomers who've left life east of the Beltine behind to return to city life. They still prefer a single family home, not a condo, but a smaller home with stuff you don't get with most downtown condos... a garden, a front porch, and close at hand storage space. Those 55-70 year olds have a choice now in GR, and I think you'll see the trend continue of empty nesters buying in the city, either downtown condos, or single family homes in the more walkable neighborhoods like Fulton Heights, Eastown and East Hills. I do think there's a market for townhomes, what the recently departed Second Story developer seems to be planning next. The number of bedrooms is an issue, old or young. For empty nesters, there's often a desire for a third bedroom...one for themselves, one as an office, the third for guests and grandkid visits. Is either a good investment? It really depends on how long you hold on to it...anything under 7-10 years and it's probably not 'investment grade' real estate, with a ROI better than long term CDs. I don't expect much appreciation in condo prices in GR...not enough to make paying the association fees worth it.

Which is why it's better to buy something you plan to live in vs. as an investment. If all goes according to plan (which history has proven never happens), I will stay in one place for more than two years this time.

[suydam]

I think what would help the market is this. Most of the condos being built in and around DT are catering to "Young Professionals", people that are single or just married, affluent, and want a hip urban life style. However what is going to happen to these young professionals when they have kids and need a good school along with a "safe quiet place with room to run around and play" to rise the family? Its off to the suburbs they go. This will leave all of these condos high and dry.

If there are 15,000 (made up number) "Young Professionals" living in the city in 2006...won't there be that many (roughly) in 10 years when they all move out to the burbs to raise families?

When they move away, they'll sell their condos to the new 25 year olds who are only 15 or 16 today.

It's the circle of life.

[twoshort]

It's the circle of life.

[michaelskis]

Agreed. I see it in parts of Eastown, even...Empty nester baby boomers who've left life east of the Beltine behind to return to city life. They still prefer a single family home, not a condo, but a smaller home with stuff you don't get with most downtown condos... a garden, a front porch, and close at hand storage space. Those 55-70 year olds have a choice now in GR, and I think you'll see the trend continue of empty nesters buying in the city, either downtown condos, or single family homes in the more walkable neighborhoods like Fulton Heights, Eastown and East Hills. I do think there's a market for townhomes, what the recently departed Second Story developer seems to be planning next. The number of bedrooms is an issue, old or young. For empty nesters, there's often a desire for a third bedroom...one for themselves, one as an office, the third for guests and grandkid visits. Is either a good investment? It really depends on how long you hold on to it...anything under 7-10 years and it's probably not 'investment grade' real estate, with a ROI better than long term CDs. I don't expect much appreciation in condo prices in GR...not enough to make paying the association fees worth it.

I agree that there are several that are moving into smaller homes, however of the 5 units that are occupied on my floor (or will be soon) 3 are occupied by empty nesters (one of which has a kid living in another unit in the building), and the other 2 are Young Professionals.

Our building is close to a 50/50 mix, however all of the empty nesters that I have seen are very social and outgoing. While they may not go out clubbing with some of the younger people, I am sure that there will be many social activities that involve both demographic groups.

Another thing that should be taken into consideration is the cost of some of these condos. Many of them are costing several hundreds of thousands of dollars. It is not always something that many young professionals can afford unless they were smart with their money early on in life.

[Budgie Frisket]

I agree that there are several that are moving into smaller homes, however of the 5 units that are occupied on my floor (or will be soon) 3 are occupied by empty nesters (one of which has a kid living in another unit in the building), and the other 2 are Young Professionals.

Our building is close to a 50/50 mix, however all of the empty nesters that I have seen are very social and outgoing. While they may not go out clubbing with some of the younger people, I am sure that there will be many social activities that involve both demographic groups.

Another thing that should be taken into consideration is the cost of some of these condos. Many of them are costing several hundreds of thousands of dollars. It is not always something that many young professionals can afford unless they were smart with their money early on in life.

There are some who never had a nest to empty.

[concretepoem]

For those of you that are interested in the new downtown condo movement, how do you feel about this from an investement standpoint? Do you feel lke you'll get a good return in the years to come, or are you afraid that the market will get oversaturated?

One of the fundamental problems with condos, as an investment, is that there's only so much you can do to differentiate your condo from the other units in the development. You can't do much to improve the curb appeal, or build an addition that adds square footage or take advantage of the lot. Each condo in a development is going to age at the same rate, at least for the first 10-15 years, and while owners can do some things to add value to their unit, the market's not likely to reward you for what you've done. You're really in the same boat as all adjacent units, the 'comps' are so similar. That can be good in a rising tide, but when the market turns south, all it takes is one seller of a similar unit to drop his price and that's the new floor for everybody with a similar unit needing to sell in that market. That's what's happening in the overbuilt condo markets of San Diego, Orange County, and other areas were people bought up property as "an investment".

[tamias6]

One of the fundamental problems with condos, as an investment, is that there's only so much you can do to differentiate your condo from the other units in the development. You can't do much to improve the curb appeal, or build an addition that adds square footage or take advantage of the lot. Each condo in a development is going to age at the same rate, at least for the first 10-15 years, and while owners can do some things to add value to their unit, the market's not likely to reward you for what you've done. You're really in the same boat as all adjacent units, the 'comps' are so similar. That can be good in a rising tide, but when the market turns south, all it takes is one seller of a similar unit to drop his price and that's the new floor for everybody with a similar unit needing to sell in that market. That's what's happening in the overbuilt condo markets of San Diego, Orange County, and other areas were people bought up property as "an investment".

Since it is the conventional single family stick built home that provides the best value for your purchasing dollar, no wonder we have a sprawl problem. Our real estate industry along with a long list of other factors is subsidizing it.

[concretepoem]

Since it is the conventional single family stick built home that provides the best value for your purchasing dollar, no wonder we have a sprawl problem. Our real estate industry along with a long list of other factors is subsidizing it.

True, single family homes look like they offer the best value. But as was noted earlier in this thread, a big plus in owning a condo is the value of your free time. Houses take time to keep up everyweek. Mowing lawns. Raking leaves. Shoveling snow. Cleaning gutters. Not having to deal with that is the real hidden value to condo ownership. It's perfect for snowbirds, who just want to show up back in GR the 1st of May, spend the warmest months of the year having fun downtown, then lockup and go back to Florida or Arizona or wherever.

Spawl? It's mainly fueled by three things: $2.20 cent gas, racial divide, and the consumerist appetite for a bigger, better McMansion fantasy lifestyle, complete with 'Great Rooms', 800 sq ft kitchens and three car garages.

[Veloise]

True, single family homes look like they offer the best value. But as was noted earlier in this thread, a big plus in owning a condo is the value of your free time. Houses take time to keep up everyweek. Mowing lawns. Raking leaves. Shoveling snow. Cleaning gutters. Not having to deal with that is the real hidden value to condo ownership. It's perfect for snowbirds, who just want to show up back in GR the 1st of May, spend the warmest months of the year having fun downtown, then lockup and go back to Florida or Arizona or wherever.

There's also the added value of DT parking (how much does it cost these days?), wear 'n' tear on the four-wheeler, and getting a wee bit of exercise as one walks to work.

[pedalled to my DT job at City Hall every day while I was there...except for the three days I had to attend off-site meetings of the regional bike trail assn!]

[concretepoem]

There's also the added value of DT parking (how much does it cost these days?), wear 'n' tear on the four-wheeler, and getting a wee bit of exercise as one walks to work.

[pedalled to my DT job at City Hall every day while I was there...except for the three days I had to attend off-site meetings of the regional bike trail assn!]

That's a sad irony, you having to drive to a meeting of the regional bike association.

The real wear 'n' tear is on the taxpayers, who because of sprawl have to pay for a wide, unwieldy network of roads, sewage treatment plants, water lines, police and fire, new schools and other infrastructure that has to be built to deal the false economy of township living....'cheap' land and 'cheap' housing.

[tamias6]

Spawl? It's mainly fueled by three things: $2.20 cent gas, racial divide, and the consumerist appetite for a bigger, better McMansion fantasy lifestyle, complete with 'Great Rooms', 800 sq ft kitchens and three car garages.

Speaking of 800 sq. ft. Kitchens, I love watching the remodeling shows on HGTV where the home owners enlarge and upgrade a perfectly fine but dated kitchen into a some zillion dollar highend show peice that a french chef would die to have knowing that all the home owners are going to do is pop a Swanson TV dinner in the microwave.

*Kerplop* *Slam!* *Beep* *Beep* *Beep* .... *Beep* *FVVVUUUUU*

[GRDadof3]

Too many condos downtown? - WOODTV

Strange article. The only thing it mentions about "too many condos downtown" is that maybe there are too many high-priced condos, which I tend to agree somewhat. It's not that they are too expensive, they're too expensive per square foot IMO.

[tamias6]

I think it would be a good idea to spur efforts to bring in more affordable condos to DT as there surely must be allot of people that would like to live DT but can't afford the prices of the current condos available.

Too many condos downtown? - WOODTV

Strange article. The only thing it mentions about "too many condos downtown" is that maybe there are too many high-priced condos, which I tend to agree somewhat. It's not that they are too expensive, they're too expensive per square foot IMO.

[rivegauche]