People talking about Grand Rapids

[organsnyder]

22 minutes ago, jas49503 said:

Also, I don't know what old homes you've been in but in my 110 year old home I have walk in closets and attached bathrooms  for all the bedrooms on my second floor, a kitchen which is probably 15'x20' with an island, double ovens, sub zero fridge, fireplace, etc. it was already there when I moved in. Sure a crappy house from a hundred years ago won't have any amenities, but a nice one will be comparable to anything built recently. Not to mention, structurally, built to a much higher standard. 

Exactly. My 100-year-old home has hardwood floors, lots of mahogany, scads of windows, an open floor plan, central air, hydronic heat, and a spacious kitchen. It also feels much very sturdy—no floor bouncing, little squeaking—probably due to the 8x10 beam running down the middle of the house.

My house was built by a gas company exec in 1916, costing $6000 (when many houses were being built for $1000). "Old" doesn't automatically mean quality (or charm, for that matter), but it does mean that you can get a really good bargain if you know what quality looks like and are willing to make some modest investments (we put in a bunch of insulation as well as a new boiler, and our heating bill rarely tops $200/month in the dead of winter [for a 2500 sqft house]).

[x99]

2 hours ago, jas49503 said:

Replacement cost oat is very relevant to this as well. Not so much what your house is worth if you were to sell it, but what it would cost to build a comparable house with respect to size, finishings, etc. these things are directly related to the cost and value of a home which aren't always the same. 

years ago won't have any amenities, but a nice one will be comparable to anything built recently. Not to mention, structurally, built to a much higher standard. 

Yeah, but houses like yours are so far from typical that any comparison isn't even close to fair.  It's the top 1/4 of 1% of anything that anyone ever built in the entire city, ever, and it's a completely different value proposition.  Most old houses in Grand Rapids are pieces of junk with wide trim on them. Even on the HH Home Tour each year, or wandering through open houses, I'm surprised by how cramped and unimpressive most of the houses are.  They suck, and frankly I wouldn't live in 80% of my neighbors houses vs the suburbs at current prices.  

All of these "Grand Rapids is so cheap articles" are causing outside money to snatch stuff up because they've all been convinced they can make a killing. We've doubled or even tripled prices in 5 years on low to mid-grade housing stock.   Good PR is great, but the end results could be an even bigger mess than last time. There are huge, potentially nice houses listed for $500k that need tens of thousands in work.  There are a number of fairly average 2000-2500sf houses over $200k that need kitchen guts.  Really?  It's cuckoo.  

[jas49503]

1/4 of one percent is a bit of hyperbole. My old house was 1750 square feet, built by a football coach for a local high school in the 30's and still had 8" baseboards, plaster walls and a brick and stone front. The studs were actually 2"x4" and of much harder wood than you would find today. You could argue that a house built today would be larger bit then you get into the whole quality vs. quantity argument which can never be settled. Whatever side of that you stand on a high school foot ball coach is hardly a one percenter yet could still afford a house built with better materials than your average middle class subdivision house built today. 

 

I would agree that custom built homes are built to a higher standard and that a tract home of 100 years ago is still crappy 100 years later. The main difference is that so many more tract homes are built, really since WW2 than before. 

[GRDadof3]

20 hours ago, jas49503 said:

If your house is more than about 15 years old you end up having the same number of problems (roughly) at the same cost, as a house built 100 years ago.  The heating bills are impossible to get away from but given how much it would cost to construct a comparable home, I still consider it a bargain. 

 

Replacement cost oat is very relevant to this as well. Not so much what your house is worth if you were to sell it, but what it would cost to build a comparable house with respect to size, finishings, etc. these things are directly related to the cost and value of a home which aren't always the same. 

 

For example, my library is floor to ceiling (10.5') walnut paneling. To replicate it would probably be 10% of the cost of the house.  You

cant take This benefit out of the cost discussion. Otherwise we would all love in pole barns out in Lowell. 

 

 

Also, I don't know what old homes you've been in but in my 110 year old home I have walk in closets and attached bathrooms  for all the bedrooms on my second floor, a kitchen which is probably 15'x20' with an island, double ovens, sub zero fridge, fireplace, etc. it was already there when I moved in. Sure a crappy house from a hundred years ago won't have any amenities, but a nice one will be comparable to anything built recently. Not to mention, structurally, built to a much higher standard. 

Walnut paneled library, 15x20 kitchen, sub zero refrigerator = you live in a very atypical old home.  Let me guess, Heritage Hill or Eastown? The wealthiest part of the city back in the 1900's? 

Go through most of the other old houses in GR built before WWII. Then let's talk.  Why do you think they're tearing down so many of them and no one is really complaining. 

Moving on. 

[arcturus]

Some people enjoy old homes and don't mind the improvements and cost necessary, plain and simple.  Resale value carries a premium because of limited supply, especially those that have been well maintained.   They're also recession resistant because of limited supply and the typical homeowner tends to be more prosperous than the owners in cookie cutter developments which was a disaster from a resale viewpoint during the last recession.  With location a huge advantage they'll always be attractive to renters and even if it doesn't produce positive cash flow our wonderful tax system allows virtually every penny of rental expenses to be deducted which means $ saved.

Edited July 22, 2016 by arcturus

[jas49503]

4 hours ago, GRDadof3 said:

Walnut paneled library, 15x20 kitchen, sub zero refrigerator = you live in a very atypical old home.  Let me guess, Heritage Hill or Eastown? The wealthiest part of the city back in the 1900's? 

Go through most of the other old houses in GR built before WWII. Then let's talk.  Why do you think they're tearing down so many of them and no one is really complaining. 

Moving on. 

It is heritage hill and this discussion did start with a reference to donkey taqueria, which isn't in HH but is very close.  And I never said that all old homes were great, only that the average home of yesteryear is better built that the average home of today.  Mostly because labor and materials are much more expensive now than in the past. 

 

Much of it does come down to personal preference and beliefs (misunderstanding) about old homes.  

[joeDowntown]

Heritage Hill is a GR treasure. Definitely not for everyone though (my parents have lived there for 20 years). They are a ton of work, but I agree, they don't build them like they used to (in the Hill at least). I think everyone can agree on that!

Friends? Friends!

Joe

[x99]

7 hours ago, arcturus said:

Resale value carries a premium because of limited supply, especially those that have been well maintained.   They're also recession resistant because of limited supply and the typical homeowner tends to be more prosperous than the owners in cookie cutter developments which was a disaster from a resale viewpoint during the last recession. 

What started this was another one of those "stuff in GR is cheap" and my comment that the suburbs were cheap, but the old houses were really getting out of line, and creating a potential risk in the even of overbuilding.  

So let's be clear about one thing:  Old houses are the worst in a recession.  95% of them are not built better than new houses.  Virtually every last thing except the quality of trim is inferior.  This creates a severe risk when housing prices increase dramatically.  Old houses require a vast input of cash to maintain, heat, and repair them.  People do not realize that a boiler costs $10,000 and so does a paint job on a medium-size house.  They don't realize that adding central air can cost $20,000.  On a 3500 square foot 2 story, the price is closer to $20,000 for a good paint job.   They think paint costs maybe $2000.  They don't realize that a steep 12/12 pitch roof 2-1/2 stories up costs double or triple a 4/12 ranch in the suburbs.  When the bills come, they do cash out refinances to pay these bills, if they can qualify.  If they cannot, they defer maintenance.  This also includes old rental properties.   Those who buy at the top of the market quickly find themselves in an impossible situation when housing price escalation stops and they can no longer sell their now-dilapidated house or qualify for a refi.   

So when you get lots of positive press, and idiots without a clue run up the prices, you create a recipe for a colossal mess unlike anything you could possibly conjure up out in the suburbs.   Both times when we saw huge run-ups like this in the last 20 years were followed by complete nightmares.  From about '99 to '01 HH saw a big run-up that was followed by a flat line.  Then in 05 to about 07 there was another one.  And then it fell off a cliff.  Now the run-up is not just HH, but East Hills, Cherry Hill, Eastown and, oddly enough, major chunks of the West Side.  We are now at a point when most smaller rentals being sold in the city do not cash flow and where old, used houses are selling for more than new houses on an apples-to-apples basis because people do not understand the costs involved.  This is very dangerous territory.  Now tack onto that hundreds upon hundreds of new construction units coming online in massive chunks equivalent to entire large subdivisions built speculatively.  Population needs to balloon to keep demand up so that those who bought or built do not find themselves upside down, or we could quickly find ourselves in very rough territory.  You simply do not have these risk factors in the suburbs to the same degree.  

Good press is great if it means people of means moving to Grand Rapids.  It is not good if it means people buying houses here they cannot afford, or building apartments for which there will be no occupants.  A lot of commercial developers are really holding their breath.  They have no idea when this will end, or what will happen when it does. They're just hoping it keeps going.

 

 

[jas49503]

You have people purchasing more than they can afford no matter what the price.  This isn't a new problem and is why you see so many homes in a state of disrepair. In fact, this is the biggest argument for increasing the home prices in a neighborhood like HH. More affluent home buyers generally have a greater reserve for unexpected home repairs. 

 

Real estate crashes do not only affect city neighborhoods. Both my brother and sister in law lost a large amount when their susburban homes lost a ton of value during the last crash. 

[arcturus]

14 hours ago, x99 said:

So let's be clear about one thing:  Old houses are the worst in a recession

 

Not for HH which I assume you're talking about when speaking of $10,000 boilers.  Their uniqueness is a huge draw for the special type of buyer who understands the costs. Recession proof no, recession resistant yes.  Uniqueness always carriers a premium.  Econ 101.

[GRDadof3]

An article in MiBiz talking about real estate investors combing the neighborhoods for flips. 

https://mibiz.com/news/design-build/item/23842-hungry-investors-seek-grand-rapids-housing-deals,-rankling-longtime-residents

You only have to look at Ann Arbor for a case study in this, where the low income households were all pushed to Ypsilanti and beyond. Not coincidentally AA is only about 5% African American and Hispanic now (compared to around 35% in GR). 

[GR_Urbanist]

"Lately, much of their attention has turned to the predominately African-American Baxter neighborhood, south of Wealthy Street. The region has become attractive as the adjacent East Hills area to the north has been built out and as deals have dried up in other parts of the city. It’s a striking about-face for investors after decades of disinvestment in some of the city’s struggling neighborhoods, a move that brings challenges for existing homeowners. "

I knew something was up when I was over there and saw a lot of homes being renovated!

“I think (sending letters) is just another way agents are looking for houses for sale. But people feel a little insulted.” 

The solicitations that they receive asking them if they want to sell aren't any different than what people on my street got in E. Hills, so it isnt underhanded or "predatory" so much as kind of creepy. Honestly no one on my street took up the offer, but a few did sell through reputable real-estate companies and made out quite well. But yeah, you dont have to sell if you dont want, but if people are going to toss money at you for a home you paid a fraction for, then shake them down as hard as you can!

Well for the homeowners over there, I hope they make a good profit. The spill-over from E. Hills and HH was inevitable.

[x99]

3 hours ago, GRDadof3 said:

An article in MiBiz talking about real estate investors combing the neighborhoods for flips. 

https://mibiz.com/news/design-build/item/23842-hungry-investors-seek-grand-rapids-housing-deals,-rankling-longtime-residents

You only have to look at Ann Arbor for a case study in this, where the low income households were all pushed to Ypsilanti and beyond. Not coincidentally AA is only about 5% African American and Hispanic now (compared to around 35% in GR). 

Ann Arbor is a great example, actually.  When I lived near there during the beginning of the last bubble, there was an article in the paper I still haven't forgotten about investors buying "investment properties" that MADE NO MONEY because they planned to make all of their cash on the increasing property values.  It was LaLaLand, and it did not last long.  The bulk of the stuff in Grand Rapids is now priced at similar LaLaLand prices.  There is a deal pending right now for almost $200,000 on a place that rents for $15k a year.  The mortgage payments including taxes and insurance are close to $14,000 a year alone.  By the time you figure in the cost of water bills, rent losses due to tenants moving, and other expenses (like, say, maintenance), you're losing money every month--probably close to ten grand a year.  That's extreme, but things like this shouldn't exist at all, and three years ago, they did not.

I like Grand Rapids as much as the next guy, but an irrational price explosion is not good for anyone because eventually, if it blows up, it takes down everything with it.  Or, maybe we really are primed to be Silicon Valley of the Midwest with a $100,000 per family median income, and every 1200 square foot rental in the city can be rented for $1600 a month in perpetuity.  It'll be fun to check back in a few years to see how it went... 

Edited July 25, 2016 by x99

[thebeerqueer]

6 hours ago, GRDadof3 said:

An article in MiBiz talking about real estate investors combing the neighborhoods for flips. 

https://mibiz.com/news/design-build/item/23842-hungry-investors-seek-grand-rapids-housing-deals,-rankling-longtime-residents

You only have to look at Ann Arbor for a case study in this, where the low income households were all pushed to Ypsilanti and beyond. Not coincidentally AA is only about 5% African American and Hispanic now (compared to around 35% in GR). 

I've received multiple letters from the questionable M Capital Realty LLC offering to purchase my home on the Westside. Pretty much said name your price and be ready to close in 21 days. 

Went right into the shredder.

[GRDadof3]

Buffalo, NY is talking about Grand Rapids' economic success:

http://www.bizjournals.com/buffalo/news/2016/10/05/why-can-t-buffalo-s-economy-keep-up-with-grand.html

[RegalTDP]

4 hours ago, GRDadof3 said:

Buffalo, NY is talking about Grand Rapids' economic success:

http://www.bizjournals.com/buffalo/news/2016/10/05/why-can-t-buffalo-s-economy-keep-up-with-grand.html

^^^From the article:

"Grand Rapids is expanding its economy four and a half times more rapidly -- four and a half times! -- than Buffalo is.

Which begs the question of why.

Officials in Grand Rapids have been asked that a lot, and their answers haven't been particularly satisfying. They talk about diversification and synergy and other terms that qualify as economic-development buzzwords. Perhaps they're as surprised (and unsure) as everybody else."

I propose that any time city officials are asked this, the answer should always be "Two words: Richard Florida" just to mess with people.

Edited October 6, 2016 by RegalTDP

[thebeerqueer]

9 hours ago, RegalTDP said:

^^^From the article:

"Grand Rapids is expanding its economy four and a half times more rapidly -- four and a half times! -- than Buffalo is.

Which begs the question of why.

Officials in Grand Rapids have been asked that a lot, and their answers haven't been particularly satisfying. They talk about diversification and synergy and other terms that qualify as economic-development buzzwords. Perhaps they're as surprised (and unsure) as everybody else."

I propose that any time city officials are asked this, the answer should always be "Two words: Richard Florida" just to mess with people.

What if all city officials say is 'Game changer'? 

[wingbert]

Just now, thebeerqueer said:

What if all city officials say is 'Game changer'? 

I thought the answer was less available parking and more bike lanes.

[GRLaker]

11 minutes ago, wingbert said:

I thought the answer was less available parking and more bike lanes.

"Road diets, no parking, and shapeless buildings are the key, gentlemen. Do those things and they will come."

Edited October 6, 2016 by GRLaker

[thebeerqueer]

12 minutes ago, GRLaker said:

"Road diets, no parking, and shapeless buildings are the key, gentlemen. Do those things and they will come."

Also, set your building heights at 12 stories, that's the key. 

[wingbert]

1 hour ago, thebeerqueer said:

Also, set your building heights at 12 stories, that's the key. 

And if someone tries to fix up one of your downtown buildings and maybe, you know, clean up an old rusting metal structure and add some dynamic lighting to it - why you just slap an ordinance on them and shut down those shenanigans ASAP.  Someone comes along and wants to develop something tall and exciting on an otherwise fairly useless parcel?  Sic your HPC on them.  Make them jump through hoops.  That will show them who is boss.  Bland and nondescript are the name of the game.  

On the other hand, if you've got a property owner who lets his buildings deteriorate and endanger your public thoroughfares, why go ahead and coddle him.  Be kind.  Ask him to please try and get around to fixing his property.  Protect him from lawsuits by cordoning off his dangerous structure at the public's expense.  And last but definitely not least, be sure you encourage one company to maintain a near monopoly on your downtown parking options.  In fact, it really helps to put an owner of that parking company on your city's parking governance committee.  That way you'll ensure an artificial scarcity of parking with the bonus that you can charge parking rates more akin to a major city like Chicago without worry of competition.  

That's what we call diversification and synergy in Grand Rapids!

Edited October 6, 2016 by wingbert

[GRLaker]

5 minutes ago, wingbert said:

And if someone tries to fix up one of your downtown buildings and maybe, you know, clean up an old rusting metal structure and add some dynamic lighting to it - why you just slap an ordinance on them and shut down those shenanigans ASAP.  Someone comes along and wants to develop something tall and exciting on an otherwise fairly useless parcel?  Sic your HPC on them.  Make them jump through hoops.  That will show them who is boss.  Bland and nondescript are the name of the game.  

On the other hand, if you've got a property owner who lets his buildings deteriorate and endanger your public thoroughfares, why go ahead and coddle him.  Be kind.  Ask him to please try and get around to fixing his property.  Protect him from lawsuits by cordoning off his dangerous structure at the public's expense.  And last but definitely not least, be sure you encourage one company to maintain a near monopoly on your downtown parking options.  In fact, it really helps to put an owner of that parking company on your city's parking governance committee.  That way you'll ensure an artificial scarcity of parking with the bonus that you can charge parking rates more akin to a major city like Chicago without worry of competition.  

That's what we call diversification and synergy in Grand Rapids!

There it is. The post of the year. Well played.

[GRDadof3]

14 hours ago, RegalTDP said:

^^^From the article:

"Grand Rapids is expanding its economy four and a half times more rapidly -- four and a half times! -- than Buffalo is.

I propose that any time city officials are asked this, the answer should always be "Two words: Richard Florida" just to mess with people.

LOL.

4 hours ago, GRLaker said:

There it is. The post of the year. Well played.

Wow, you guys are sooooo negative.

 

Going back to the article, ahem! , they're mainly talking about Gross Metropolitan Product for the entire area. 

[mpchicago]

It seems like G. Scott Thomas didn't do much digging to find out the secret to Grand Rapids' success. He basically sited the Detroit Free Press article.   Maybe he should have talked to someone from Grand Rapids?  Not a great article.  

Edited October 7, 2016 by mpchicago

[GRLaker]

3 minutes ago, mpchicago said:

It seems like G. Scott Thomas didn't do much digging to find out the secret to Grand Rapids' success. He basically sited on Detroit Free Press article.   Maybe he should have talked to someone from Grand Rapids?  Not a great article.  

I thought the same. It lacked substance. GR was in the title, a little bit in the middle, and a mention at the end...But it never once actually went into any real detail of what GR has done. So Buffalo locals are left wondering who the heck Grand Rapids is and why is this guy comparing us to them.