Are Millenials an Untapped Detroit Home Buyer Market?

**DetroitPlanner** · April-02-13, 02:50 PM

What would the City need to do to tap into the millennial market as home buyers? Pulte [[a local company that has done some work in the City, see Bing's State of the City speech). Has Identified this as a growth market.

http://finance.yahoo.com/blogs/daily...3Rpb25z;_ylv=3

For example, should we steer them into existing housing stock? Build new? Both?

**Detroitnerd** · April-02-13, 02:54 PM

Pulte may have identified them as a growth market, but they generally are not interested in the offerings Pulte traditionally puts forward.

I think a mix of small, historic houses and historically styled in-fill may appeal to them. For more vacant spaces, I would say that if you were to develop the narrow streets of the Lower East Side into row houses with historic character, with garages on the alley, that might be more appealing than a bigfoot Pulte McMansion.

**DetroitPlanner** · April-02-13, 03:00 PM

Pulte will build for the market. They are not in the business of not giving consumers what they want.

http://www.pulte.com/communities/md/...32/index1.aspx

**Bham1982** · April-02-13, 03:07 PM

I'm somewhat familar with Hyattsville, MD [[the cited Pulte development), and I wouldn't call it an "urban" setting.

I mean, yeah, they're building townhouses, but there's no way the residents are walking to the grocery store or whatever. It's a suburb, though they have some density closer to the Metro station. Most of Hyattsville doesn't even have sidewalks, I don't think.

In any case, Pulte is 95% exurban development. Look at their Michigan developments.

**iheartthed** · April-02-13, 03:17 PM

Originally Posted by DetroitPlanner

What would the City need to do to tap into the millennial market as home buyers?

First the city probably would need to find 100 acres of continguous undeveloped land. I doubt Pulte does brownfield developments...

**Detroitnerd** · April-02-13, 03:29 PM

In the spirit of exurban development, where your subdivision's sign references what USED TO BE there [[Pine Valley or Beech Hill), will the sign say "Rusted Smokestacks?"

Anyway, a lot of these experiments with building McMansions in the city haven't been working well. Even on Sand Bar Lane, which some estimate the city paid $200,000 per lot just to help that project get off the ground, and it is right on the water and has vacancies, incomplete build-out, etc. Not to mention what they're trying over at Jeffries West ...

http://radial-logic.com/2011/06/14/suburbs-in-the-city/

**DetroitPlanner** · April-02-13, 03:31 PM

Originally Posted by iheartthed

First the city probably would need to find 100 acres of continguous undeveloped land. I doubt Pulte does brownfield developments...

Then why are they clearing land on their own dime?
http://www.wxyz.com/dpp/news/region/...ean-up-detroit

**iheartthed** · April-02-13, 03:37 PM

Originally Posted by DetroitPlanner

Then why are they clearing land on their own dime?
http://www.wxyz.com/dpp/news/region/...ean-up-detroit

That's philanthropy.

**p69rrh51** · April-02-13, 03:38 PM

Pulte started out building moderate sized urban housing and I know they can handle any project they want.

**Detroitnerd** · April-02-13, 03:50 PM

Originally Posted by p69rrh51

Pulte started out building moderate sized urban housing and I know they can handle any project they want.

And Ford started out by building Model T's, but by 2007 had grown so used to building the über-profitable SUVs that it didn't care about changing markets, etc., until it slammed them over the head. Pulte has been living fat and happy off of exurban subsidies and greenfield development. Let's see how stupid they've gotten from never having to compete. Let the fun begin.

**p69rrh51** · April-02-13, 03:53 PM

Detroitnerd they went where the money was/is if you owned the company you would have done the same thing. I know one of the family members and an old friend was a staff architect for them you have no idea of their resources.

**Detroitnerd** · April-02-13, 03:59 PM

Originally Posted by p69rrh51

Detroitnerd they went where the money was/is if you owned the company you would have done the same thing. I know one of the family members and an old friend was a staff architect for them you have no idea of their resources.

I do have a good idea of their resources. But I am not going to be rooting for them as they try to turn their huge greenfield-into-mcmansion complex into something that can turn a profit in the 21st century. Not at all. They caused the very problem they now face: Oversupply of exactly the kind of product they specialized in. Kinda hard to feel all that sorry for them.

**iheartthed** · April-02-13, 04:00 PM

I think Pulte has always been in the business of greenfield development. It's just that when they began there was still greenfield left to develop in the city.

Taking a look at their web site, I haven't seen anything available for sale in an inner-city. If they are looking for a change in business model, Detroit would be an odd place for them to start; there are urban markets that are far more stable for them to develop urban housing.

**p69rrh51** · April-02-13, 04:09 PM

Originally Posted by iheartthed

I think Pulte has always been in the business of greenfield development. It's just that when they began there was still greenfield left to develop in the city.

Taking a look at their web site, I haven't seen anything available for sale in an inner-city. If they are looking for a change in business model, Detroit would be an odd place for them to start; there are urban markets that are far more stable for them to develop urban housing.

You are correct but there is a changing of the guard so to speak. I think the generation taking over is changing the model as we debate this. I like that they want to invest in this market. If they pull it off they will be sitting very pretty.

**Patrick** · April-02-13, 04:37 PM

Originally Posted by p69rrh51

You are correct but there is a changing of the guard so to speak. I think the generation taking over is changing the model as we debate this. I like that they want to invest in this market. If they pull it off they will be sitting very pretty.

I don't know about Pulte as a whole, but their Potomac Yard project here in Alexandria seems cheaply done. I am pretty much right across the street from this development so I see it daily. Seems to me that it is gaining a bad reputation from a lot of potential buyers as well as agents and the local media. I can't really judge an entire company on one project, but it seems pretty shoddy here. Then again, everything is so much more expensive here.

**p69rrh51** · April-02-13, 04:48 PM

Originally Posted by Patrick

I don't know about Pulte as a whole, but their Potomac Yard project here in Alexandria seems cheaply done. I am pretty much right across the street from this development so I see it daily. Seems to me that it is gaining a bad reputation from a lot of potential buyers as well as agents and the local media. I can't really judge an entire company on one project, but it seems pretty shoddy here. Then again, everything is so much more expensive here.

I am sorry to hear that. Hopefully those in charge are aware and are taking steps to correct the situation.

**detroitsgwenivere** · April-02-13, 06:50 PM

Every Pulte home I've been in had cardboard walls, and the few I've inspected had crappy insulation, poor seals, moist basements, a heavy waste of useable space. Not what I'm looking for when I buy my first home.

**DetroitPlanner** · April-02-13, 07:59 PM

I did not post this to start a bitch-fest about Pulte. They have however identified a market that they expect to grow. Pulte however certainly seems to be willing to do work in Detroit, and are one of the biggest developers in the country and are also HQ'ed in this market, though anyone can develop a project... Heck even One tough DetroitNerd could if he wanted. Detroit needs population. What does it need to do to get in on this action? Is it able to tap this market or not? If not it is another one of many missed opportunities.

**ghettopalmetto** · April-02-13, 08:19 PM

Originally Posted by DetroitPlanner

I did not post this to start a bitch-fest about Pulte. They have however identified a market that they expect to grow. Pulte however certainly seems to be willing to do work in Detroit, and are one of the biggest developers in the country and are also HQ'ed in this market, though anyone can develop a project... Heck even One tough DetroitNerd could if he wanted. Detroit needs population. What does it need to do to get in on this action? Is it able to tap this market or not? If not it is another one of many missed opportunities.

I'm a bit older than the millenials, but I think a good start would be to sell homes that are NOT $300,000, like all of the suburban crap they produce. I don't know too many single college-educated 20-something would-be homeowners who can stomach that.

It would also help if they were not built by Pulte, but I digress.

**Bham1982** · April-02-13, 08:27 PM

Originally Posted by ghettopalmetto

I'm a bit older than the millenials, but I think a good start would be to sell homes that are NOT $300,000, like all of the suburban crap they produce. I don't know too many single college-educated 20-something would-be homeowners who can stomach that.

Why would a "single, college-educated 20-something" buy a Pulte home?

Those homes are all 3,000 square foot, 4 bedroom homes, with great rooms, huge master bedrooms, dining rooms, walk-in closets, walk-out basements and the like. What single 25-year old wants that?

Hell, why would single 25-year olds be buying homes in the first place? It makes no sense for most people in this age cohort. You can't predict 10 years down the line at that age.

If you want to buy, get a little townhouse or a bungalow [[both of which can be had for a fraction of the price), not an exurban McMansion. Lots of good stuff available for around 100k or even less.

**DetroitPlanner** · April-02-13, 08:35 PM

Originally Posted by Bham1982

Hell, why would single 25-year olds be buying homes in the first place? It makes no sense for most people in this age cohort. You can't predict 10 years down the line at that age.

If you want to buy, get a little townhouse or a bungalow [[both of which can be had for a fraction of the price), not an exurban McMansion. Lots of good stuff available for around 100k or even less.

There are many millennials that are over 25. I agree, they could buy a bungalow or a townhouse, nearly none will buy a mcmansion. However, the point of this thread is how to get them to buy in Detroit?

What are they looking for? Certainly a stabilizing job market is going to help, but what else? Short of those who want to use it as a party zone, they don't seem to be moving in in great numbers. How do we even the playing field?

**Honky Tonk** · April-02-13, 08:36 PM

Originally Posted by DetroitPlanner

I did not post this to start a bitch-fest about Pulte. They have however identified a market that they expect to grow. Pulte however certainly seems to be willing to do work in Detroit, and are one of the biggest developers in the country and are also HQ'ed in this market, though anyone can develop a project... Heck even One tough DetroitNerd could if he wanted. Detroit needs population. What does it need to do to get in on this action? Is it able to tap this market or not? If not it is another one of many missed opportunities.

I think you already know the answer to that. Detroit needs to create a safe, stable, inviting environment, before any repopulation occurs. In the late 90's, early 2000's, homes were built in "Gated Communities", and it did little to bring population back. A few of the areas took, [[Mexicantown, Corktown), but for the most part, people stayed away. A lot of that housing ended up collapsing. Partly due to the economic climate, partly because there were no takers. Not everyone is willing to, or can afford to take a chance on a crapshoot. The Pulte article, IMO, is trying to create a market where currently there is none.

**Vitalis** · April-02-13, 08:52 PM

Thanks much for this post, DetroitPlanner. Detroit missed out on the Post War desire for homes with more space: with family rooms, attached garages, and bigger yards, which is what much of the market craved for over time - yes, that suburban look of brick and siding. We all know this style of house, and certainly a version of it could have been seeded across the city. So here we are once again, but first the deconstruction of thousands of not-to-be-missed dwellings, and then what? Row houses, town houses, communities of single family homes that are energy efficient and with yards that aren't all sod. Something for everyone. It's probably tempting for a developer to see acres upon acres of newly cleared land and think, "Canton." But this is where thoughtful and resourceful architects and builders MUST act as caretakers of the urban experience and think boldly about what city living has been and should be. Places and spaces for all of those emigre engineers that we desperately need; for the next group of health workers; and the teachers and first responders. Civilized folk in wagon trains bound for the Detroit housing rush.

**Richard** · April-02-13, 08:54 PM

So you have hedge funds betting on the market being renters and home builders betting on the market to be buyers,interesting.

The survey reads that the millennial is the largest group in the nations history which kinda confuses me when we have been told that the boomers were the largest market in history,which one is it?

I sell sheep I think you should buy one now because they are only going up in value.

**Honky Tonk** · April-02-13, 09:05 PM

Originally Posted by Richard

So you have hedge funds betting on the market being renters and home builders betting on the market to be buyers,interesting.

The survey reads that the millennial is the largest group in the nations history which kinda confuses me when we have been told that the boomers were the largest market in history,which one is it?

I sell sheep I think you should buy one now because they are only going up in value.

Nicely put.