Have any of you driven around downtown Grand Rapids lately and noticed the plethora of condo complexes every direction you look? Check out the skyline, they are everywhere – north, south, east and west. You want one next to a highway, we’ve got one for you! You want one in an old renovated furniture factory, we’ve got that too! You want one in a historic area, ditto! You want a new one with options galore, have we got a condo for you! You want a river view, no problem, which side do you want - sunrise or sunset? Close to the college scene? Come on down, we’ve got one of those and bring your party shoes cause we're going dancing after the closing! You want one with Brad Pitt, Angelina Jolie and all their lovely children next door? We've got that too! Actually scratch the last one, I don't think any developer in town has that many connections yet. Bottom line...
River City is quickly becoming Condo City.
Let’s see if my memory holds…there is Park Row, Icon on Bond, Plaza Towers, Landmark Lofts, Union Square, Boardwalk Condos (the Old Berkey & Gay Factory), Monroe Terrace, City View, River House, The Fitzgerald, Front Row and the Waters Towers. That’s just a few I can remember without research. I’m not even going to mention much older complexes and those not close to downtown. Most of those mentioned above are either done being built and ready for move in, are in the process of being built or have been renovated/remodeled in recent years to compete with new builds. Prices seem to be hovering in the $150-250K range for one bedroom/one bath, up to $300-500K for two bedrooms/two baths or more. Factor in a premium price if you choose to be up high, with a river view and want the luxury of new over old construction. Over 18 units alone are currently for sale between $500,000-1,000,000. That’s a lot of expensive condo real estate for such a small market as Grand Rapids. If you reference the income availability grid noted in the last article, in the entire state of Michigan, only 8.8% of the population can afford condos in GR that are on the market between $500,000-1,000,000. This number is not what we would call a “bumper crop”.
The GR Press had an article a few weeks back noting that realtors and developers are counting on the suburbanites and young professionals all dumping their current living arrangements for the ease and joy to be found in the concrete jungle. They profiled some parents and their adult kids all giddily choosing condos and living in downtown instead of the burbs. They praised city living and all the perks that go along with it. A new day has dawned people, a new day has dawned and if you don’t buy a condo soon you will have missed it. Really???
Granted, there are certainly many positives to be found in condominium living:
no yard work
no exterior maintenance upkeep
smaller sq. ft. so, less house to clean
single level living with few to no stairs
lower buy in prices (usually, not always)
neighbors upstairs, neighbors downstairs – lots of new friends if you want them
property tax breaks in renaissance/tax free zones
community areas with pool/tennis courts/work out rooms
use of public transportation system with ease
ability to ride your bike with helmet all over city streets – please look before crossing!
the ability to walk around downtown and not need a car to visit restaurants, bars, clubs, etc.
being close to all the action – parades, festivals, fireworks shows, etc.
As in all things, there are drawbacks to condo living as well. A few are:
mandatory monthly condo association fees (often quite high)
lack of privacy and sometimes acoustical issues
access to outdoors limited to tiny balconies, small patios and often no green space
due to the box like nature of condos, often feels like glorified apartment living
dogs/cats/pets often not allowed per HOA rules & regulations
limited guaranteed and covered parking both for owners and visitors
lack of gas stations/grocery stores/convenience stores located close-by - often a car is needed just to get basic food and supplies
Whether walking or driving, congestion is growing downtown, you’ll have to deal with it
lower long term appreciation rates
reduced buyer pool when you try to sell later
Places like the Boardwalk Condos (old B & G Factory) seemed to sell in a decent amount of time per county records, but the prices are in the lower range, 70K - 250K max. I have been told by some that this building might be subsidized (I have not been able to confirm this yet) which makes a difference to sales and could account for the lower prices. On the other hand, the lower price could be due to the fact that the previous developers could never get straight if they actually removed toxic waste from this site illegally by the hundreds of truckloads (they deny this yet, video evidence and witness testimony shows to the contrary) or if the toxic waste is still below all the buildings in massive amounts as they claim. Perhaps this inconsistency is part of the pricing program. Keep it cheap and keep them quiet. Residents, don’t worry about the toxic waste, we say they took it out. On the other hand, the old developers say it’s still there. Time will tell for sure. By the way, you can have dogs in this complex and they have been known to use the entire back lot of the building and train track area as their massive doggie doo-doo box. Sooooo convenient. Count this building in pet lovers – it’s for you.
I drive past the Icon on Bond condos every week. Their initial occupancy dates were advertised as beginning in April. Since then, their web site has moved occupancy dates to early summer. Even with that change, the place still seems eerily quiet and empty. Their web site advertised that of the 118 condos, ½ had sold as of December. The question remains – where is everyone then? A clean transaction for a completed unit with a qualified buyer could easily be done in 3-4 weeks or less. I haven’t seen anyone moving in and nothing is recorded as closed at the county level yet either per my research. They seem like nice places, unsure what is happening over there. Is unseen interior work on delay? Is the complex too pricey? Unappealing location near the freeway, industrial corridor and across from electrical towers and power lines? Simply a victim of too many condos for sale in town? This one is a bit of a mystery. If any of you have wind of what is happening, do share.
The glassy blue modern marvel known as the River House continues to rise over the western Grand River, but prices seem a bit steep. It costs a buyer about 250K to get in lower level and smaller units, and prices skyrocket to the 500-650K range for higher locations, water views, cityscapes and more amenities. This will prove to be the hot place for young as well as older professionals who probably want a status location and one of the better condo views of the small, but appealing Grand Rapids skyline. How popular it proves to be on the other side of the river is still to be determined. I imagine for those with money and good walking shoes, the location will be just right.
Park Row is coming along fine over on Michigan Street. Developers noted awhile back to the media they have sold something like well over ¼ of the units as of the construction phase begun earlier this year. The complex itself seems to be appealing with dedicated entrance/exits, central boulevards, landscaping and green spaces. It does face the freeway and busy Michigan Street so, the views won’t be nearly as appealing as those "down by the river" (anyone thinking Chris Farley of Saturday Night Live with that last line? You know…I live in a van, down by the river!). Anyway, the draw at this complex is it is close to GVSU and the medical buildings on Pill Hill.
The Fitzgerald in the old renovated YMCA building is small and boutique like. The units that are finished appear to be well done and appealing, but they have been pricey and somewhat slow to sell. This complex is more for the upscale buyer from what I have seen.
Good old Plaza Towers is always the big contender in town. It’s a fine mixture of lower priced condos, medium priced and high end – it would be perfect for Goldielocks and her three bears. The best thing going for this place is location – and in real estate – we all know how prized that can be. It sits off the Grand River and has great views from three sides of the building. It is right next door to Van Andel Arena, The Bob, TGI Fridays, the new JW Marriott 5 star hotel, multiple banks, office complexes and has a great riverwalk area. All units get guaranteed parking of at least one up to four spaces and the place has tennis/basketball courts, exercise room and pool/hot tub area. Don’t forget there are also apartments in this building and The Marriott Courtyard Hotel with restaurant. It’s an older building, but always being updated in terms of landscaping, exterior repairs and interior upkeep. With all the competition in town, it may need to remodel it’s entrance and lobby to the condo tower and common hallways as time goes on to not look dated and remain one of the premier condo addresses in town. It’s not big city great, but it’s one of the better choices for Grand Rapids.
That’s enough individual condo complex commentary for now.
I have seen a handful of complexes in person, others via pamphlets/flyers, web sites, personal photos and on line. I would call most fairly standard and nothing too exciting (think Chicago, Miami, New York, Paris here). All the looks are definitely the Midwest at their best and there is nothing wrong with that. The majority offer the standard white box interior, a little bit of woodworking and exposed brick walls, open ceilings with duct work showing through in the renovated buildings, hardwood floors, a few windows in each room, upgraded kitchens, appealing bathroom, but everything else is remarkably apartment like. If you can get a great river view or great skyline view do it, these things will help with extra enjoyment now and better resale value later.
The GRAR MLS (multiple listing service) shows all single family homes, condos and multi-units available on the market, but only those properties that are listed by licensed realtors or those working with licensed realtors (builders/developers) show up. Builders or developers selling FSBO without licensed representation are not typically found in the MLS system. Thus, the availability of active units and closed stats developers quote to the media is hard to confirm. They rarely want to admit a complex is proving hard to sell or slow to sell so, numbers could easily be inflated to help move units along. It takes hard research at the city and county level to verify their numbers if you want exact data as to what is available, what is under option, what is sold and what has closed. So, for now, most of us take the builders/developers at their word what has moved off the books. Hope they are as honest as they look :-)
I'm all for condos and ample building provided the market can support it. I certainly want rising housing values. What I don't want is for supply to outweigh demand and then cause prices to drop and problems to domino in terms of lower appraised values, depreciation, distress sales and the like. Although I feel there is a need for this type of living in a growing urban area like G.R., especially with all the medical, research and education related jobs coming to the area in the next 1-2 years, I remain a bit uneasy at the supply and demand ratio. I worry builders/developers got a wee bit too excited at the prospect of doing new brick and mortar work and didn’t plan for mortgage issues, credit tightening and an unstable economy throughout the region and state. My guess is even if units are slow to sell, in time prices might come down to bring in those necessary buyers and get the properties off the books. Some may offer closing cost concessions, hoa credits, home warranty plans and more if things gets really tight and slow. Eventually, all should be liquidated, but at what price and how long might it take? Perhaps some of these condo complexes should have been developed into newer and more appealing higher end apartment options instead. A more balanced mixture of both - condos and apartments - might have proven just the ticket.
Of course all this leads to the biggest question of all, what happens when todays condo buyer becomes tomorrows condo seller? Traditional buyers will move less frequently into the condo market whereas the condo market buyer transitions easily into the single family market. Historically, in nearly every region across the U.S., condos do not perform as well as single family homes. That means they typically don’t sell as fast, the buyer pool isn’t as big and values don’t seem to rise as quickly. The American Dream remains owning your own home. Owning your own condo is still a great achievement, but it just isn't quite the same.
I think condo living has its plus and minus points as you can see. With that said, I remind readers as always, buyers should beware. Today’s condo bargain may be tomorrow’s financial loss. Definitely consider buying a condo if it’s right for you but, may I simply suggest, buy wisely.
At least you have lots to choose from in Condo City, I mean Grand Rapids :-).
The Local Area Watch