  Dustin89 Member Username: Dustin89 Post Number: 155 Registered: 07-2006 |
Below is a link to an article from today's Detroit News. It's well-written article on the status of the condominium market in Detroit. http://detnews.com/apps/pbcs.d ll/article?AID=/20071123/BIZ/7 11230335 | ||
E_hemingway Member Username: E_hemingway Post Number: 1412 Registered: 11-2004 |
Don't forget the main story about the condo market for the entire metro area. Housing slump wallops condos Segment is hardest hit as construction, sales plummet http://detnews.com/apps/pbcs.d ll/article?AID=/20071123/BIZ/7 11230363 | ||
Dustin89 Member Username: Dustin89 Post Number: 156 Registered: 07-2006 |
Thanks E_hemingway-I didn't see that one. I thought it was an interesting point in the article about Detroit condos that some of them were reverting to rentals due to the difficulty in selling them. That's the exact opposite of the situation a little ways back, i.e. when the Park Shelton converted from rentals to condos. | ||
Mdoyle Member Username: Mdoyle Post Number: 254 Registered: 10-2006 |
The article managed to remain mostly positive. | ||
Upinottawa Member Username: Upinottawa Post Number: 1020 Registered: 09-2005 |
The overspending on consumer goods (including second homes, cars, etc.) fueled by rising housing values is bound to die off due to the now decreasing housing values. When it does, look out. | ||
Renfirst Member Username: Renfirst Post Number: 133 Registered: 12-2006 |
"The quick sell has surprised even the hotel developer, 40-year veteran John Ferchill, owner of the Cleveland-based Ferchill Group. Ferchill and analysts credit the Book-Cadillac success to the cachet of living in what was once Detroit's crown jewel, plus the fact that the condos' cost attracted upscale buyers unaffected by the state's economic downturn." They make it sound like Book Cadillac is an exception to the slump, but I wonder how many of those condo's are being purchased to flip??? How many are currently on the market? | ||
Rickinatlanta Member Username: Rickinatlanta Post Number: 121 Registered: 07-2006 |
Several articles have stated that purchase agreements show that almost all of the 61 units sold will be the primary residence of the buyers. In fact, most purchasers are paying in cash. | ||
Mwilbert Member Username: Mwilbert Post Number: 3 Registered: 11-2007 |
Those condos went on the market recently enough that buyers could see the market conditions and couldn't reasonably expect to be able to flip them. Therefore I doubt that many of the buyers are planning to do that. Of course, there are always clueless people. I would be more concerned about how many of the purchases will actually close--if the market value of a property drops after your offer is accepted, especially in a weak market, it can be wiser to walk away, either by finding some reason why the seller hasn't met the requirements of the purchase agreement, or just by walking away from your deposit. There has been a lot of that happening in other parts of the country, even in high-end developments. Let's hope that the B-C is desirable enough for that not to happen. | ||
Danny Member Username: Danny Post Number: 6825 Registered: 02-2004 |
If Michigan doesn't get more jobs, then the housing market is WORTHLESS! I can see most of lofts and condos in Detroit are mot worth selling, causing most real estate companies to take drastic measures to pay back the investors. | ||
Danny Member Username: Danny Post Number: 6826 Registered: 02-2004 |
Biggest hit in in the job market in Michigan. 1. The Automotive jobs 2. The Auto Market Suppliers 3. The Traditional mom and pop retails near by 4. Later comes the school districts Jobs that are still hanging in Michigan: 1. International trades to Canada 2. Fast Food Restaurants 3. Retail stores 4. Auto Mechanics 5. Engineer employment 6. Dot-Com Companies 7 Very rare extractive industries For the first time since 1980, Michigan's Statewide population drop -0.1%. Over 400,000 jobs have been lost from 2000 to 2007. A recession will happen by 2008 and this state will suffer more. People of Michigan stop living in the STONE AGE! like primative cavemen. Go out and find a job, Go out into the world and talk to other nations to see if they could bring jobs here in Michigan. Don't point your blaming fingers to Granholm or any other leaders. They are doing their best to bring jobs here in Great Lakes State. Detroit, Suburbs and all of our small towns will recover, but to speed it up, Go out into the world, be ambassadors and create more Michigan jobs. | ||
Crawford Member Username: Crawford Post Number: 161 Registered: 10-2006 |
I thought the article was mostly positive. Under the circumstances, downtown is doing ok. The Book Cadillac "exception" is complete BS. Funny that the Detroit papers never call out Fernchill on his propaganda. Almost nothing has moved at the B-C for the last 12 months. Last Christmas, they reported they had sold 55 (or so) units. Now this holiday season, they are bragging they sold 60 units. How is selling five units in a year a sign of progress? At that pace they'll need five more years to sell out the project. Considering the market is worse today than earlier in the year, I wouldn't be surprised if those five units were all sold right after last year's glowing holiday news articles, and they have sold nothing since. I bet you these unsold units will eventually switch to rentals. The market for high-end luxury downtown condos is currently moribund. A brokerage in Oakland County (where my mom works), cannot sell two condos at the Willits in Birmingham. The Willits is easily the fanciest condo building in metro Detroit. They have six-figure price cuts on both units and have no interest. Another ridiculous project is in Royal Oak, where they are developing houses on Red Run Golf Course. The neighborhood is very Madison-Heights looking (and is about two blocks from the border), yet they are looking for Birmingham prices for the project. Not surprisingly, there is no interest. If you are a developer, I think it's best to wait until at least 2009 or so. Waaay too much product. | ||
Jjaba Member Username: Jjaba Post Number: 5633 Registered: 11-2003 |
Crawford, what's "Madison Heights looking"? jjaba hears there's lots of Asians over there. Any connection with your "look?" jjaba, Proudly Westside. | ||
E_hemingway Member Username: E_hemingway Post Number: 1413 Registered: 11-2004 |
Ferchill has said they expected it to take three years to sell this many condos, so they're ahead of the curve. The real test is how many of those sales will actually go through. Some have said most will but the market trend is otherwise. We'll see I guess. | ||
Fnemecek Member Username: Fnemecek Post Number: 2613 Registered: 12-2004 |
quote: From the half dozen or so buyers that I've talked to, none. I'm sure there are some in the mix somewhere, but I've everything that I've seen and heard points to the buyers who are looking to make this their primary residence throughout the foreseeable future. quote: Because they're selling them. That a lot more than folks in other parts of the state can say. quote: It's great that Lowell allows people who failed 5th grade math to post here. There are 67 condos in the Book-Cadillac total. 60 of them have been sold (including approx. 5 in the past year). These leaves 7 unsold with a current market absorption rate of 1 condo sold every 2.4 months. How in the world does that equate to it taking 5 years for all of the condos to be sold? | ||
Eric_michael Member Username: Eric_michael Post Number: 21 Registered: 08-2004 |
Isn't it common in deals like this that a large group of buyers (those with more insight perhaps?)purchase at the first possible opportunity. Then, a cooling off occurs while construction or renovation is ongoing. Followed by another brisk selling "season" once the product is complete? | ||
Darwinism Member Username: Darwinism Post Number: 682 Registered: 06-2005 |
I feel the same way as Renfirst. Many developments, including those in Detroit, Royal Oak, Ferndale and etc, are announcing record-breaking number of units spoken for within so-and-so number of weeks. The big question would be to see how many of those actually closed and moved-in. | ||
Emu_steve Member Username: Emu_steve Post Number: 510 Registered: 11-2006 |
The positive, though, is that new developments will be more realistically priced moving forward. I thought a lot of the best riverfront projects, e.g., were overpriced for the Detroit market. | ||
Rax Member Username: Rax Post Number: 31 Registered: 11-2007 |
60 of the 67 condos have not been sold at the Book Cadillac. You might have purchase agreements in place on 60 condos, but I guarantee the buyers have not sat down and signed on to their 500K+ mortgage. Honestly, how may condos have been actually sold in the CBD? | ||
Brandon48202 Member Username: Brandon48202 Post Number: 201 Registered: 12-2004 |
Rax, why would someone close on their mortgage before their unit was completed? | ||
Rax Member Username: Rax Post Number: 32 Registered: 11-2007 |
Exactly my point. So why say 60 units are sold? They really aren't sold yet. | ||
Fury13 Member Username: Fury13 Post Number: 3319 Registered: 10-2003 |
Let's hope the condo slowdown puts a stop to future building in the Main North project in Royal Oak. That way, the historic Main Theatre won't be demo'd. | ||
E_hemingway Member Username: E_hemingway Post Number: 1427 Registered: 11-2004 |
Good chance you'll get your wish there, at least for the time being. | ||
Fnemecek Member Username: Fnemecek Post Number: 2645 Registered: 12-2004 |
quote: If there is a signed purchase agreement and the buyer has paid a non-refundable deposit, it's sold. | ||
Cman710 Member Username: Cman710 Post Number: 384 Registered: 07-2006 |
Fnemecek, you could consider those units sold, but they aren't finally sold, either. When a seller and buyer sign a purchase and sale agreement, the seller agrees to sell the property to the buyer for X dollars, and the buyer agrees to buy the property, plus put up a non-refundable deposition (often five percent). If the buyer is unable to go forward for whatever reason (e.g., they can't sell their suburban house), the seller gets to keep the deposit as his/her liquidated damages. So, when the purchase agreement is signed, is the condo sold? Yes, in the sense that the buyer and seller are obligated to conduct the transaction. But no, in the sense that if the buyer can't close because of lack of funds or financing, then the seller will get the deposit, but will still have an unsold condo. In a very real sense, then, the properties still are not "sold." | ||
Kid_dynamite Member Username: Kid_dynamite Post Number: 398 Registered: 06-2007 |
I hope they nuke that theatre in Royal Oak. That corner will look a lot more attractive once it, and it's parking lot are long gone and the new development is completed (one day...). | ||
Fury13 Member Username: Fury13 Post Number: 3327 Registered: 10-2003 |
Yeah, right, Royal Oak really needs more 10-story towers. Let's just continue to destroy the continuity of the streetscape on Main and Washington with these condo behemoths. Projects like Main North change a community's character from hometown to impersonal. | ||
Swingline Member Username: Swingline Post Number: 967 Registered: 11-2003 |
quote:Fury's sentiment is just plain wrong. The ongoing mid-rise residential development in Royal Oak's urban center is exactly what that community needs more of. It's a great antidote to unwise and unchecked sprawl at the urban fringe. It gives SE Mich. residents a lifestyle choice that is in too short supply in this region. | ||
Dan Member Username: Dan Post Number: 1472 Registered: 10-2003 |
I do like the idea of nuking the theater, it would be allot more interesting than traditional demolition techniques. | ||
Royce Member Username: Royce Post Number: 2438 Registered: 07-2004 |
I think the Royal Oak Theater would be an added amenity for condo owners in the area and it should stay put. With bars, restaurants, and shops in the area, and within walking distance, wouldn't it be nice if your whole evening - dinner, movie, and a night-cap at a bar or back at your place - could all be done without ever getting into a car. Sounds like a win-win scenario if the theater remains where it is. | ||
Fnemecek Member Username: Fnemecek Post Number: 2646 Registered: 12-2004 |
Cman710: they might get a couple of people who are forced to back out of the purchase agreement. However, considering how much money they would lose - both in terms of lost deposit and lost tax credits - it is highly doubtful that you'll get very many. More importantly, any units that do go unsold will likely be bought by someone else within a few months. Wondering whether or not the B-C will be sold is kind of like looking at a woman who is 9 months pregnant and wondering if she'll give birth. Yes, strange things can happen but the odds are decidedly in favor of a birth. | ||
Mackinaw Member Username: Mackinaw Post Number: 4100 Registered: 02-2005 |
Fury13 and Swingline are kind of both right. It's a fine line. Density is needed. A lot of our downtowns in this area were not originally built to the level of density that we'd like to see today. Ann Arbor is the best example. There are a lot of detached-home neighborhoods right in/around downtown, and they seem to be sitting ducks because of the constant push for development there, yet they remain. You see a row of houses on one block and a tall condo building on another. You see random old detached homes and low-rise commercial buildings mixed in with taller buildings. Stand at the corner of Thompson and Liberty and you'll see what I mean. Now, it's kind of awkward, but keeping a decent amount of the small and the old helps the city keep its identity and human scale like Fury says. On the other hand, a certain amount inevitably has to go to make way for the higher densities that the market is calling for. Dozens of downtown development proposals for mid-rise mixed-use buildings, condos, hotels, you name it are continuously hung up by this debate in A2. The solution? Start by targeting the lots and buildings that no one will complain about to be replaced. Spare the historic at all costs. Build on parking lots, and in place of misfit low-rise buildings. (I.e. McKinley is building up on a site at Washington-Division in A2 that was previously the nastiest 1970s low rise office building you've ever seen). After this, if/when more density is demanded, then you have to make tough calls. The public will, in a functioning city, is/should be normally heard (unlike the case of the Madison Lenox in Detroit), and if it is strong enough, a preservation will take place. This is continually the case in A2, even if there are several examples of developers winning out. Personally, I think some more of the old has to go to make way for some height in that city. But there are alot of misfits and non-controversial non-historic low-density buildings that can be replaced first. As to Fury's 'hometown to impersonal' bit, I don't neccesarily buy the idea that higher density makes a place impersonal. It has to do with the quality of the finished product (i.e. is it sterile pre-fab with poor street presence?) more than the size. It also has to do with what is being lost. If there is a historic storefront from 1890 that certainly has a reasonable purpose to serve still today, there's no reason it should have to go even if there is a market for something four times the size on its site. Density can be accomodated in other creative ways. Again I'll refer to A2 (don't think that I'm in completely in love with it or anything, it's just a great case study for this situation), and point to its Main Street and adjacent blocks, which are basically a replica of what was there 100 years ago. That mid-density strip of mostly 4-5 story buildings has not changed, because it's not worth it. The "hometown" feel is preserved while density is channeled elsewhere. Backtracking, I'll say that you can still have a reasonably dense cityscape that is still personal. The urbanist James Kunstler has talked about the neccesity of these mid-rise cities in today's economy...they are a great fit and enhance sustainable living environments. You could look at Washington DC and its dense mid-rise landscape; Kunstler pointed to Troy, NY as being at a perfect human scale. The point? Many of the downtowns around here like RO and A2 are mish-mashes that have room for relatively higher densities, but present conundrums when you consider the preservation aspect. By building around the most cherished historic places (regardless of their density) and creating density in other parts of the city in an organized fashion with designs that are sympathetic to traditional urbanism, you can create a much denser overall environment while keeping the 'hometown feel' on the street level. Ever notice how there are some 19th century houses mixed in between taller buildings along E. Jefferson near/just outside downtown? Ever notice how there is a old house sitting right next to the Macabees Building at Woodward and Warren? Extremely different densities can actually exist alongside each other rather well. Deciding in favor of higher density for the future of a city is not a zero-sum decision that will mean total replacement of the old and the small and the hometown-ish. Sorry for the threadjack. | ||
Kpm Member Username: Kpm Post Number: 75 Registered: 08-2005 |
I understand the Main Art Theater in Royal Oak is a community asset, but does it have historically significant architecture? If it could be moved/integrated into a new development, would that make residents happy? | ||
Rax Member Username: Rax Post Number: 35 Registered: 11-2007 |
"If there is a signed purchase agreement and the buyer has paid a non-refundable deposit, it's sold." I remember reading that one of the loft developments in Brush Park "SOLD OUT IN 12 HOURS!" Come to find out 75% of those people backed out and ate their "non-refundable" deposit. Feel free to call them "sold". But until someone actually takes ownership and starts living there, its' all bullshit. | ||
Fnemecek Member Username: Fnemecek Post Number: 2649 Registered: 12-2004 |
First, if a project is seeing 75% of its buyers back out of a deal then there had to be something very, very wrong with the deal that wasn't disclosed to buyers until after the paperwork was signed. Second, I think it's interesting that there are so many people who keep moving the goal posts when it relates to the Book-Cadillac. Once upon a time, people were saying they'd never find a developer. Then people said the condos would never sell. Now people are saying that even though there are signed purchase agreements and the buyers have put down non-refundable security deposits, it still doesn't count. The Book-Cadillac project offers residents a unique combination of amenities and other incentives to live there. There is nothing like it in Michigan and very few such places in the Midwest. It should be too surprising then that it sells differently than the rest of the market. | ||
Iheartthed Member Username: Iheartthed Post Number: 2319 Registered: 04-2006 |
quote: Yeah, I don't think people quite understand how this project has changed real estate in metro Detroit. Projects like this are what make Manhattan, London and Chicago what they have become. Detroit is stepping away from no-class and going towards world-class, lol. | ||
Bobj Member Username: Bobj Post Number: 3205 Registered: 11-2003 |
This is a great time to buy a condo, the market is down and it will most likely rise if the Quicken deal actually happens | ||
Cman710 Member Username: Cman710 Post Number: 390 Registered: 07-2006 |
Fnemecek, I never meant to be moving any goal posts for the Book-Cadillac deal. I think that Starwood and the Westin brand took a risk in renovating the hotel, but a calculated risk that will pay off in the end. And I think all the condos will be sold, too. I completely agree that it remains unlikely that many buyers will back out of their purchase and sale agreements, given the large size of their deposits. If any deals do fall apart, then the question for the developer will be whether to lower prices. Fortunately, with the hotel development and most of the condo units sold, the developer should not have to rush to lower prices just to unload the remaining units. I expect all the units to be sold. And as Bobj said, this is a great time to be a condo. The market is down, and prices have been declining. While some people, especially on this forum, are forecasting gloom and doom, prices will only go down so far, and I would expect them to level off in the next year or so. I think those buying a condo now will make a fair profit from their investment. | ||
Lefty2 Member Username: Lefty2 Post Number: 719 Registered: 07-2007 |
"The overspending on consumer goods.....is bound to die off due to the now decreasing housing values. When it does, look out. It already has, slowed about a year or more ago. My guess is the market will slide down overall (with exceptions) for another 1.5 - 2 years, but who really knows for sure. | ||
Gistok Member Username: Gistok Post Number: 5863 Registered: 08-2004 |
Royce, I think you're mixing up the Main Theatre on Main Street north of 11 Mile Rd., with the much larger Royal Oak Theatre over near 4th & Washington. The Main Theatre is a pseudo Art Deco Moderne theatre of more recent vintage. The 2,000 seat Royal Oak Theatre was a Rapp & Rapp designed theatre (same architect as the Michigan Theatre), built in 1928... and is attached to a 6 story office block, which was the tallest building in Oakland County back in the 20's. The Royal Oak Theatre ain't going anywhere! | ||
Bobj Member Username: Bobj Post Number: 3228 Registered: 11-2003 |
We may not be at the bottom of the real estate slump, but hopefully close. Once the rise starts, and it will, it will be too late. I believe that the CBD market will take off before many neighborhoods/suburbs wil. It is specialized market that appeals to many that don't have houses to sell. Having a house to sell is what is holding many people back from making a move, me included. | ||
Lefty2 Member Username: Lefty2 Post Number: 725 Registered: 07-2007 |
^ I agree, The CBD, or riverfront, (eastern market) is where, i think, most will buy next. | ||
Royce Member Username: Royce Post Number: 2440 Registered: 07-2004 |
I was referring to the Main Theater, Gistok. I think it should remain where it is instead of being torn down for more condos. How many more condos are needed it that area? What's really needed in that area is new housing. There are very few true colonials east of Main Street. Attic rooms are not something to write home about, and there seems to be a lot in that area. | ||
Llyn Member Username: Llyn Post Number: 1879 Registered: 06-2004 |
Did I miss something? Where is this idea coming from that the Main Art Theater would be torn down? The last I saw, the developers and the theater owner had a deal that would preserve the theater. The next condos that would be built (if they ever are) would be on the corner of 11 and the first street east of Main. And... I think they should keep the theater. If you're going to have any kind of restaurant and entertainment district in Royal Oak, you actually need the entertainment portion - such as it is. | ||
Fury13 Member Username: Fury13 Post Number: 3329 Registered: 10-2003 |
Kpm wrote: "I understand the Main Art Theater in Royal Oak is a community asset, but does it have historically significant architecture?" Gistok wrote: "The Main Theatre is a pseudo Art Deco Moderne theatre of more recent vintage." It is not a "pseudo Art Deco" anything. The Main Theatre is one of the last surviving area "neighborhood" theatres in the Streamline Moderne style. It was built in the early 1940s... 1941, if memory serves me right. We're losing these beauties left and right. For example, the Hills Theatre in Rochester was modded into an business-arcade development, and the Berkley Theatre was butchered and converted into a Rite Aid drugstore. (For a comparable theatre of the era, see the Civic in Farmington or the Pix in Lapeer.) Underneath that bland '80s stucco-like facade (put on when the theatre was expanded from one screen to three) is the original enameled metal facing, much like what you see on the Elwood Bar in Detroit or the Bastone restaurant in Royal Oak (which was a mess for years and recently restored... the same could be done for the Main Theatre). The Main's marquee is the original. The interior has been modified somewhat, but many Streamline Moderne touches remain. It has a lot of potential and could be restored/improved to better reflect its era. The Main is one of those assets that attract people to Royal Oak. Funny thing is, as the town expands, such assets that made the town quaint and charming get knocked down. Pics: http://www.waterwinterwonderla nd.com/location.asp?ID=1145&ty pe=5&noinfo=true | ||
Royce Member Username: Royce Post Number: 2485 Registered: 07-2004 |
^bump. This one goes with the Griswold debacle. | ||
E_hemingway Member Username: E_hemingway Post Number: 1480 Registered: 11-2004 |
I wouldn't call the Griswold a debacle. Like many other projects around Metro Detroit, it suffered from bad timing more than anything else. It probably would have been successful had it been launched two years earlier or two years from now. I hope it does eventually come to fruition. |
