Some would-be buyers are waiting for market growth
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • March 13, 2008
There is a bright spot growing in the long-beleaguered rental market.
Occupancy rose 3% last year at the 1,600 units in metro Detroit owned by Kaftan Enterprises, said owner Jeffrey Kaftan, who also is president of the Apartment Association of Michigan.
"The apartment market has really been hurt for the past four years because of the proliferation of condos and easy money," Kaftan said. "We now are starting to see that change."
Kaftan said he expects the trend to continue this year as the buyers' market continues and tight credit keeps some potential home buyers on the sidelines.
Some people are renting now because they had a foreclosure, cannot get financing with the tighter lending practices, or are just waiting out the new and existing housing markets to see if they improve. The most optimistic industry forecasts predict that upswing will begin in the middle of this year.
Taking the Fifth
At the Fifth in Royal Oak, an 18-story, 78-unit contemporary condominium development that opened last fall, owner John Hanna said he has leased some units to people who intend to buy at a later date. He did not say how many have sold or leased.
The units are priced from $278,900 to $1 million and are attracting people from other cities and countries who are looking for the urban lifestyle where they can walk to shops and restaurants.
Jeremy and Jane Pritchard, both 33, moved to Michigan from England in November for Jeremy Pritchard's job with Clifford Thames Inc., which had an office in Livonia. It does information-technology work for Ford Motor Co. They stayed in corporate housing for three months before moving into the Fifth in February.
They looked all over metro Detroit for housing, but were leery of buying a large property when they didn't understand local property laws, the market and taxes.
"We like to be a bit different and the Fifth allowed us to do that," Jeremy Pritchard said. "It is a fantastic building with a fantastic outlook and we fell in love with it."
Craig and Tanya Bell moved to Dusseldorf, Germany, in July 2005 with Henkel Corp. and just moved back to metro Detroit in January. They sold their home in South Lyon just before leaving, which Craig Bell, 45, calls "the best financial decision we've made."
They were smitten with the European style of living in central cities.
"We were also tired of the typical big house-big yard that Americans seem to live for. Downsize, de-complex and enjoy life," Craig Bell said. "When you are looking at a depressed market and never know where the bottom is, you want to find something unique. And this place we thought was unique."
The Bells bought a unit in the Fifth that faces south. From their floor-to-ceiling windows, they can see the Detroit skyline and the Ambassador Bridge.
"It was a good investment point for me in a down market," he said of the view.
Homes are leasing, too
Leasing of unsold homes also has grown in the metro area, said Randy Repicky, office manager of Johnstone & Johnstone in Grosse Pointe Farms.
"We are seeing the number of leases go through the roof. Sellers are starting to rent them while they are waiting for a buyer to come along or waiting for the market to improve," Repicky said. "We used to do one a month in my office and now we are doing 10 a month."
BY GRETA GUEST • FREE PRESS BUSINESS WRITER • March 13, 2008
There is a bright spot growing in the long-beleaguered rental market.
Occupancy rose 3% last year at the 1,600 units in metro Detroit owned by Kaftan Enterprises, said owner Jeffrey Kaftan, who also is president of the Apartment Association of Michigan.
"The apartment market has really been hurt for the past four years because of the proliferation of condos and easy money," Kaftan said. "We now are starting to see that change."
Kaftan said he expects the trend to continue this year as the buyers' market continues and tight credit keeps some potential home buyers on the sidelines.
Some people are renting now because they had a foreclosure, cannot get financing with the tighter lending practices, or are just waiting out the new and existing housing markets to see if they improve. The most optimistic industry forecasts predict that upswing will begin in the middle of this year.
Taking the Fifth
At the Fifth in Royal Oak, an 18-story, 78-unit contemporary condominium development that opened last fall, owner John Hanna said he has leased some units to people who intend to buy at a later date. He did not say how many have sold or leased.
The units are priced from $278,900 to $1 million and are attracting people from other cities and countries who are looking for the urban lifestyle where they can walk to shops and restaurants.
Jeremy and Jane Pritchard, both 33, moved to Michigan from England in November for Jeremy Pritchard's job with Clifford Thames Inc., which had an office in Livonia. It does information-technology work for Ford Motor Co. They stayed in corporate housing for three months before moving into the Fifth in February.
They looked all over metro Detroit for housing, but were leery of buying a large property when they didn't understand local property laws, the market and taxes.
"We like to be a bit different and the Fifth allowed us to do that," Jeremy Pritchard said. "It is a fantastic building with a fantastic outlook and we fell in love with it."
Craig and Tanya Bell moved to Dusseldorf, Germany, in July 2005 with Henkel Corp. and just moved back to metro Detroit in January. They sold their home in South Lyon just before leaving, which Craig Bell, 45, calls "the best financial decision we've made."
They were smitten with the European style of living in central cities.
"We were also tired of the typical big house-big yard that Americans seem to live for. Downsize, de-complex and enjoy life," Craig Bell said. "When you are looking at a depressed market and never know where the bottom is, you want to find something unique. And this place we thought was unique."
The Bells bought a unit in the Fifth that faces south. From their floor-to-ceiling windows, they can see the Detroit skyline and the Ambassador Bridge.
"It was a good investment point for me in a down market," he said of the view.
Homes are leasing, too
Leasing of unsold homes also has grown in the metro area, said Randy Repicky, office manager of Johnstone & Johnstone in Grosse Pointe Farms.
"We are seeing the number of leases go through the roof. Sellers are starting to rent them while they are waiting for a buyer to come along or waiting for the market to improve," Repicky said. "We used to do one a month in my office and now we are doing 10 a month."
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