Berkshire Hathaway Homeservices the Loft Warehouse Downtown
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Berkshire Hathaway HomeServices The Loft Warehouse Condo Market Report Downtown Detroit Published January 2019 DEVELOP WITH CONFIDENCE™ Introduction Welcome to our Detroit Condo Market Report! This report is aimed at listing all significant condominium projects in Detroit, and organizing essential information about them so that buyers. sellers, developers and real estate agents can use it to quickly find relevant information and aid in their decision making process. It includes key metrics such as sold price per sf, desirability index, as well as a list of the most recent sales, with unit size, price, and close date. We hope it becomes an essential tool for anyone already involved in our very dynamic and growing market, as well as an exciting introduction for those considering a move to our City either as new residents or as investors and developers. Definitions New Development - A project that is new to the market and has never been sold before. Only projects that are publicly offered for sale are reported. Contact us to learn more about upcoming developments. Resale Development - A project that was sold out by its developer and only has existing owner sales. Average Absorption - Units sold per month over last ten sales or last three years. Launch Year - Year that closings started or that closings are expected to start for new developments. Sold Out Year - Year when the last developer owned unit was sold. For older projects this is often an estimate. Average Listing Price/SF - This is applicable only to new developments, and represents the average of the price per square foot of the units that are publicly marketed at the time this report is issued. It does not include the price per square foot of units under contract and not yet closed, as this is not public information. Address - When a development has multiple addresses (as is typical for townhome developments for example) the unit number is a short form of the street address comprised of the street number followed by a letter code indicating the street. Condominiums/Cooperative - This report only covers condominiums in the city of Detroit and excludes cooperative units that are usually bundled with condominiums on the MLS. Due to the specific type of ownership and ownership restrictions, the cooperative market does not follow the same dynamic than the condominium market. Desirability Index - The Desirability Index reported for resale developments is an average for the units sold during the period. The Desirability Index reported for new developments (units not yet sold) is based on the publicly available information. Sources - Realcomp II Ltd. is the source of all sale data. Other data is credited to each project specific website and other marketing materials. Data accuracy is limited by the timeliness & accuracy of sales reporting by Realtors® to Realcomp. Amenities - The visual key below has been used to describe the amenities available for each Development. Valet Concierge Hotel Storage Fitness Lounge Food Outdoor Parking Pool & Drink Condo Market Report Downtown Detroit - January 2019 Copyright 2019 The Loft Warehouse Inc. DEVELOP WITH CONFIDENCE™ Market Outlook Price/sf vs. Close date 10-year sales history 2018, a Record Year 2018 was a record year with the sale of 381 condo (+19% vs. 2017) and a transaction volume of $99M (+38% vs. 2017). The average condo sold for $260,000 vs. $223,000 in 2017. This growth is easily explained as new high end projects such as the Fort Shelby Residences and City Modern have both added to the number of transactions and to the overall market volume. A New Trend Emerges: Market Normalization In the graph above, we can detect for the first time a new trend in the market evolution with a reduction in the rapid rate of apprecia- tion that we have been observing over the last 7 years. Some condo buildings’ rate of appreciation is still accelerating because they appreciated later than the rest of the market due to product, location or other restrictions. They are still adjusting, with a time lag, to their expected value. Other buildings that are now passed their peak were overvalued in 2017 and find themselves in the middle of a market correction that started mid 2018. The market trend graph for each building is now displayed in the top right corner of each project page in this report. These behaviors correspond to a “market normalization”. After many years of exponential appreciation due to a severe lack of in- ventory, the introduction of new product, the increase of interest rates and buyers’ concern regarding trade & the global economy have tempered overheated sub-markets and allowed others to catch up. We are now looking at a still appreciating but more bal- anced market dynamic. Since we still are projecting a lack of condo inventory situation, the combined evolution in 2019 of the stock market, trade policies and interest rates will define if our market continues on its steady appreciation rate, slows down further or rather rebounds to return to an increasing appreciation rate. Condo Market Report Downtown Detroit - January 2019 Copyright 2019 The Loft Warehouse Inc. DEVELOP WITH CONFIDENCE™ Map of Coverage 5 G 8 J 15 13 12 23 F 20 L 4 1 2 21 6 C 16 27 B K E D3 M 9 11 H 24 17 22 10 18 28 14 A 7 26 N 19 I D 25 New Developments Resale Developments A Franklin Lofts - 2987 Franklin Street 1 Detroit Towers Condos 17 Garden Lofts B 9 on 3rd Townhomes - 4402 - 4434 3rd Street 2 Shoreline East Condos 18 Great Lakes Tower C The Selden - 438 Selden Street 3 Campau Farm in Elmwood Park 19 Grinnell Place Lofts D Fort Shelby - 525 W. Lafayette Boulevard 4 Canfield Lofts 20 Stuber-Stone Lofts E City Modern - 318 Edmund Place 5 Gramont Manor Condos 21 Willys Overland Lofts F Saint Charles - 1454 Townsend Street 6 Indian Village Manor 22 Woodward Place at Brush Park G Fisher Kahn Condos - 7409 Second Street 7 200 River Place Lofts 23 55 West Canfield H 64 Watson - 64 Watson Street 8 Lofts at New Center 24 Carlton Lofts I Ashton Detroit - 659 Howard Street 9 Carola & Lamar Lofts 25 Riverfront Tower Condos J Cass & York - 5935 Cass Avenue 10 Leland Lofts 26 Westin Book Cadillac K James Place Lofts - 262 Mack Avenue 11 Lofts at Rivertown 27 FD Lofts L 632 Prentis - 632 Prentis Street 12 Park Shelton Condos 28 Garden Court M Trumbull House - 4304 Trumbull Street 13 Research Lofts N Tiger Towns at the Corner - 2200 Trumbull Avenue 14 Spinnaker Tower 15 Art Center Town & Carriage Homes 16 Ellington Condos Condo Market Report Downtown Detroit - January 2019 Copyright 2019 The Loft Warehouse Inc. DEVELOP WITH CONFIDENCE™ Desirability Analysis Price/sf vs. Desirability 1/18 - 12/31/18 sales J 26 I F C H A E K M 17 19 L 4 21 23 25 16 24 D 9 12 B 7 13 20 N 22 27 G 10 18 11 8 15 14 5 28 1 2 6 3 New Developments Resale Developments A Franklin Lofts - 2987 Franklin Street 1 Detroit Towers Condos 17 Garden Lofts B 9 on 3rd Townhomes - 4402/4434 3rd Street 2 Shoreline East Condos 18 Great Lakes Tower C The Selden - 438 Selden Street 3 Campau Farm in Elmwood Park 19 Grinnell Place Lofts D Fort Shelby - 525 W. Lafayette Boulevard 4 Canfield Lofts 20 Stuber-Stone Lofts E City Modern - 318 Edmund Place 5 Gramont Manor Condos 21 Willys Overland Lofts F Saint Charles - 1454 Townsend Street 6 Indian Village Manor 22 Woodward Place at Brush Park G Fisher Kahn Condos - 7409 Second Street 7 200 River Place Lofts 23 55 West Canfield H 64 Watson - 64 Watson Street 8 Lofts at New Center 24 Carlton Lofts I Ashton Detroit - 659 Howard Street 9 Carola & Lamar Lofts 25 Riverfront Tower Condos J Cass & York - 5935 Cass Avenue 10 Leland Lofts 26 Westin Book Cadillac K James Place Lofts - 262 Mack Avenue 11 Lofts at Rivertown 27 FD Lofts L 632 Prentis - 632 Prentis Street 12 Park Shelton Condos 28 Garden Court M Trumbull House - 4304 Trumbull Street 13 Research Lofts N Tiger Towns at the Corner - 2221 Trumbull Avenue 14 Spinnaker Tower 15 Art Center Town & Carriage Homes 16 Ellington Condos Condo Market Report Downtown Detroit - January 2019 Copyright 2019 The Loft Warehouse Inc. DEVELOP WITH CONFIDENCE™ Desirability Analysis A Buyer Behavior Model The Desirability Index is a proprietary index developed by Berkshire Hathaway HomeServices The Loft Warehouse, that represents how desirable a property is for a typical buyer. It is a number from 0% (least desirable) to 100% (most desir- able), based on a statistical model of buyer behavior extracted from past and current sales data. The desirability index is the cornerstone of a new statistical method to model condominium markets that allows us to predict the sale price of any condominium unit based on its location, finishes and amenities. Changes in the buyer behavior occur because of long term trends in buyer taste and changes in available construction and material technology, but also more rapidly, through the influx of new residents to the City moving from surrounding communities, as well as bringing fresh expectations from other Cities & States. As we update regularly our model, we are able to see trends in buyer behavior such as the continued importance of parking, or the evolution away from industrial lofts toward refined products featuring higher quality finishes. More im- portantly, we are able to quantify these changes and their impact on perceived value. Market Model The use of the Desirability Index allows us to compute a very simple market model as the relationship between the De- sirability Index and the Price/sf is linear.