Downtown Detroit's condo market "oversaturated"

**Lowell** · January-25-21, 01:53 PM

They've been building and building and converting. This seemed inevitable and, likely when coupled with Covid, is happening according to Crains.

For nearly two years, Detroit has had an excess of condominiums for sale on the market.

To developers, that means an added challenge in an already tough building climate plagued with long-rising construction costs eating into profit margins — not to mention economic upheaval caused by a deadly global pandemic.

For sellers of already existing units, those on the other side of the transaction have more options now to pick from, giving them more negotiating power.

**EGrant** · January-25-21, 02:51 PM

Saw this sentiment on reddit, but basically it is very cost-prohibitive to build a condo for less than $400K [[and make money), which prices out young people looking to move to the city and excludes families because they want more space and schools. So you're really left with very wealthy young people and empty nesters. Not exactly the biggest market.

**angry_fred** · January-25-21, 04:17 PM

This kind of construction pace can't be sustained without fixing the schools.

**NSortzi** · January-25-21, 04:22 PM

We already kind of knew this over a year ago when several condo projects were cancelled or downsized.

**DetroitSoldier** · January-25-21, 04:50 PM

I think a small but measurable amount of this can be attributed to the increased development and stability in a handful of desirable neighborhoods. While the downtown life is nice, the ability to have double the home for half the price and still be within 10 minutes of downtown is very attractive to many. And it is not the same 5 neighborhoods anymore. There are up and coming places like North End and Islandview that are gaining significant traction in the Detroit development market with better bang for the buck investment opportunity.

**Danny** · January-25-21, 05:13 PM

Detroit is no Chicago or New York. Real estate developers want to make empty nester super condos and 'McApartments' to filled up vacant spaces and get empty nesters closer to work in Gilbert Town Detroit and those entertainmant hubs. Once COVID-19 Pandemic is over, there will plenty more of gentrified projects that will make Detroit skyline glow in the dark.

**ShadowSoarer** · January-25-21, 09:29 PM

Talking about specifically Downtown and specifically condos, there isn't a lot a condos Downtown is there? Apart from the Fort Shelby Residences, Riverfront Tower, and some penthouses on top of the Westin, what else is there?

**401don** · January-26-21, 08:08 AM

Originally Posted by ShadowSoarer

Talking about specifically Downtown and specifically condos, there isn't a lot a condos Downtown is there? Apart from the Fort Shelby Residences, Riverfront Tower, and some penthouses on top of the Westin, what else is there?

Most people would include, not just high rises, but what the marketers call stacked urban towns [[hate that term for what we used to say were just walk-up apts) in Brush Park, the Tiger Stadium site, etc. as condos.

**motorcity** · January-26-21, 01:31 PM

There is no way to spin this, this is dire news. So dire I'm surprised Crain's even published it.

**motorcity** · January-26-21, 01:59 PM

Originally Posted by EGrant

Saw this sentiment on reddit, but basically it is very cost-prohibitive to build a condo for less than $400K [[and make money), which prices out young people looking to move to the city and excludes families because they want more space and schools. So you're really left with very wealthy young people and empty nesters. Not exactly the biggest market.

Both are actually very big markets, with a lot of money. They unfortunately don't want to live in Detroit. Condo market is metro Detroit is on fire. New condos out in the exurbs are selling for $300k-550k as fast as they can build them. There are economic consequences when you're very expensive [[taxes/insurance) and also the most dangerous city in America.

**KnnNike** · January-26-21, 03:13 PM

Originally Posted by ShadowSoarer

Talking about specifically Downtown and specifically condos, there isn't a lot a condos Downtown is there? Apart from the Fort Shelby Residences, Riverfront Tower, and some penthouses on top of the Westin, what else is there?

No, there's not; that was one annoying piece with that article. I had to move to Garden Court in Rivertown because there wasn't anything downtown...it's all rentals.

I love GC, but it sucks having to drive back downtown, because oh-yeah-our-transit-system-also-sucks. GC/Rivertown definitely ain't downtown. Neither is midtown, Corktown, etc.

**JonWylie** · January-26-21, 04:43 PM

According to a quick google search, the average price/sf for a town home is $111/sf. Even taking into account a higher than average price, that leaves the door very much open for average to moderately priced condos, if you forgo many of the extra amenities.

**casscorridor65** · January-26-21, 06:51 PM

I'm sure Dan Gilbert's people knew this more than a year ago - considering his better-than-most access to data, which is why the Hudson Project has been seesawing in it's design. His condos "should" sell because of novelty and the building they're in, but it will pull potential buyer's from other condo projects...IMHO.

**Satiricalivory** · January-27-21, 01:11 AM

The crains article is click-bait. If anything downtown is starved for condos. Prices keep going up.

And since when is Islandview "greater downtown"? Is literally the entire city limits downtown Detroit now? Just so media wont be forced to admit that there is indeed development in the neighborhoods?