THE LOCAL AREA WATCH

BIG SISTER GETS IT RIGHT

Let's give credit where credit is due.  According to the Grand Rapids Press, G.R. Mayor George Heartwell (a.k.a. Big Sister) eschewed the usual leftist pieties to stick up for parents unhappy with the Grand Rapids public schools.  He criticized the school board members who had publicly excoriated parents opposing Taylor's "Iron Curtain".

Well, maybe not quite a criticism, but at least Big Sister said this:  "I know the day will come that the Grand Rapids public schools will be the schools of choice for parents in the suburban districts.  But until then, I'm disturbed by some of the attitudes from these board members."  Those board members were Arnie Smithalexander who called parents racists because they wanted to transfer their kids out of the city schools to suburban ones, and Lisa Hinkel who said those parents can either move out of the city into the 'burbs or pay tuition for a private school.

So not very stern stuff from Heartwell in light of the poisonous statements by Smithalexander and Hinkel, but remember, folks, he is taking a stand on unfamiliar territory -- i.e., neither leftist nor establishment insider.  The man may be a chameleon when it comes to political opportunity, but I sense Big Sister actually sees the real wrong in what they said.  That earns him a pat on the back.

Also, one school board member, Jim Rinck, finally expressed some concern with Smithalexander and Hinkel.  On Tuesday he said, "You don't ever tell people you disagree with to leave the city."  Then he softened that tepid admonishment by explaining that the two probably got a little too enthusiastic in their support of Taylor's anti-transfer policy.  And just to make it clear which side of Taylor's "Iron Curtain" he is on, Rinck suggested that parents who don't want their kids to attend Grand Rapids public schools don't have a real beef because the schools aren't actually "crawling with gangs and violence".  No, the violence is merely common not epidemic.  Shame on those parents for wanting discipline in the classroom to be common instead.

Well, it's probably too much to expect both Big Sister and the school board to stand by parents.  But at least one has, and that's a change for the better.

IF THEY BUILD IT, WHY THEY WON'T COME

In response to our editor's article on the downtown condo building boom, Taylor's Iron Curtain trapping city kids within his undisciplined and failing schools is one important reason why they won't come.

TAYLOR'S IRON CURTAIN

Members of the Grand Rapids Board of Education showed the public on Monday what thugs they are.

Earlier this year, to stop the flight of students from the rotting Grand Rapids public school district, Superintendent Bernard Taylor implemented a new policy of refusing student requests for transfers to other districts.  Unless exceptional circumstances can be proven, a student who is a resident of the city of Grand Rapids will be forced to attend a Grand Rapids public school -- unless, of course, his or her parents can afford the price tag for a private or parochial education.

That is certainly one way to stem declining enrollment.  Imprison the kids within the system (while, incidentally, putting the lie to the rationale for spending taxpayer dollars on new buildings).

At Monday's regular meeting, members of the Grand Rapids public school board vociferously defended Taylor's new policy.  In fact, they even denounced the parents who opposed Taylor's crackdown on transfers.  Indeed, the repulsive Arnie Smithalexander accused dissenting parents of "blatant racism", a disgusting slander that once again demonstrates this woman's lack of fitness for public office.  Of course, educrat apparatchik and board v.p. Lisa Hinkel was in lock-step with Smithalexander, while none of our other public servants demanded an apology for the outrageous statements of their colleague.  But you see, dear readers, this is the way of thugs.  They get what they want from you through coercion, and if you have the temerity to complain, they will vilify you.

So down comes the Iron Curtain around the Grand Rapids public school district.

IF THEY BUILD IT . . . . . . WILL THEY COME?

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 :-).

Bridget Dupont-Tingley
Editor
The Local Area Watch

IT’S UP. IT’S DOWN. NO, IT’S REALLY DOWN. THE GRAND RAPIDS REAL ESTATE MARKET

The GRAR (Grand Rapids Association of Realtors) reported around this time last year there was about  4,300 homes/condos for sale. Today that number is close to 12,000.

Due to a major oversupply of properties in all price ranges, values have dropped and with credit tightening up, this trend is not expected to reverse itself anytime soon.  There is about a 9-12 month inventory of homes and condos on the market at this point. For those of you not familiar with real estate trends, that is high.  You have to go back to the late 80’s or very early 90’s to see that level of inventory in place. 

Realtors, developers, builders and mortgage brokers have a hard time admitting when things are not going well and they manage to put the pretty spin on things as much as they can. That’s understandable,  it’s their bread and better. But, we still have to be honest. Since they can’t say it so easily, I’ll do it for them – it’s a bad market. Even in bad times though, some come out ahead. That would be buyers with liquid cash and solid credit histories, investors and full time agents and builders with expert knowledge, longevity in the business and strong marketing skills. Unfortunately on the flip side, things not-so-good for sellers, new and small builders and part-time realtors. Let's not leave out of the equation all the businesses that are impacted when housing doesn't move quickly - title companies, appraisal companies, home inspection companies, vendors who do home repairs, home improvement firms, advertising and marketing firms, cleaning companies and more. Nearly everyone is impacted one way or another.

Per the most recent residential sales states from the MAR (Michigan Association of Realtors), it appears that real estate adventure seekers will need to strap in as the ride continues to look bumpy.  The average price of a home in Grand Rapids in August was $149,052, a drop of over 8% from last year. The number of homes that sold in August was 3.5% lower than last year.  Year to date homes sales are down about 5.3% over-all.   According to MAR stats, the total number of sales from January thru August have all seen negative trends.  Same with the average sales price, down consistently each month as well.   No month showed a gain so far in 2007.  With a quarter of the year left, experts don’t expect this downward spiral to get much better as the months go on.

As reported in the Detroit Free Press, based upon income, the number of Michigan households that can afford homes/condos per range are as follows;

0-99,000       - 35.0%
100-174,999  - 23.3%
175-249,999  - 16.9%
250-324,999  - 10.6%
325-399,999  - 5.50%
400-549,999  - 3.90%
550-699,999  - 2.80%
700-849,999  - 1.20%
850-1 million - 0.50%
1 mill +           - 0.40%

Any way you break it down, being in the 325K range and below is the place to be, both for buyers and sellers as the income pool is there. There is still an oversupply of homes in this range, but as the market comes out of it's funk (it will in time), this will balance out once a domino process of offers, sales and closings happen again. Higher end properties will still sell, but the buyer pool is going to be much smaller, market times will be extended and buyers can ask for greater reductions and concessions to get a deal to work out.

Per the MBA (Mortgage Brokers Association) recent updates, 43 of the states in our union are doing quite well in the areas of housing and over-all economy.  On the other hand, there are seven states that aren’t doing well at all.  Three of these seven lead the nation in foreclosures – those states are Michigan (lucky us, making the news again!), Ohio and Indiana.  These three have the highest level of delinquency and foreclosures and that is mainly due to the underlying economy in these states.  Four other states are showing housing troubles, they are Arizona, California, Florida and Nevada.  Factors that are contributing to these conditions include: high adjustable rate mortgages, declining housing prices which make refinancing difficult, high share of investor loans, sub prime mortgage woes and poor economic conditions. Ohio’s foreclosure rates have showed signs of leveling off even though they remain high. Michigan’s problems continue to escalate.  Michigan leads the nation with foreclosure starts with a rate of 1% of outstanding loans. Michigan ranks second in overall delinquency rates.  And finally, Michigan ranks third in foreclosure inventory numbers. We just can’t seem to catch a break in The Great Lakes State. We are first in too many ways we shouldn’t be.

With all this data as reference from the Free Press, MBA, MAR and GRAR, we can see why so many buildings are going up and so many being offered for sale but, there has been decreased interest, limited turnover and minimal closings. Even though the numbers in Grand Rapids are not anything to crow about, they aren’t as dismal as those found on the east side of the state. We may have it rough here on the west side, but they have it much worse in the Metro Detroit region.

Fortunately, as is the norm, this cycle will pass. Real estate always has its peaks and troughs, just like the stock market. We will weather this storm and experience clear skies again. The only problem is no expert knows for certain exactly when the storm will end.  Early 2008? Late 2008? Beyond?  Most predict more turmoil  well into 08' so, bundle up and plan for rain. On the positive side, at least you won’t melt.

Regards,

Bridget Dupont-Tingley
Editor
The Local Area Watch

WHY WE REMEMBER, WHY WE FIGHT

As the sun sets on another September 11th, I'm sure most of us have taken at least a moment today to reflect back to that bright blue sunny morning six years ago that started so quiet and serene, yet ended with such devastating and disastrous consequences.

A day spent watching massive buildings fall to the ground with such ease, like children's plastic toy blocks piece by piece. Watching with both horror and fascination as people ran in fear and shock covered in dust and debris as far away as they could get.  Watching first responders from police, port authority, EMS and firefighters battle through fire, flames and toxic gases in an attempt to save just one more life be it in one of the fallen WTC towers or the side of the Pentagon. Those 40 in Shanksville faired no better on Flight 93 a short while later.  We all watched from afar as tears fell upon pictures of lost loved ones trying to be found by their families and friends.  We all tuned into the news reports hungry for information to help alleviate our fears. That information went on for minutes, hours, days, weeks, months and now years.  How on that late summer morning of September 11th, 2001 a nation of close to 300 million was shocked to its core that nearly 3,000 of our own citizens had been destroyed by a hate so strong it sought us out with mind numbing determination.  How we all stood in silent acknowledgement that such evil had arrived on our shores, unwanted and unwelcome, but here nonetheless.

I put our flag at half staff today as I left for work this morning in a sign of respect for those who lost their lives so many years ago.  I also offered a silent moment of prayer, comfort and peace for those who died during that first awful 24 hour period and those who have continued to loose their lives ever since that day.  But, even as the day ends and the flag is returned to its proper position, these people I will never meet linger in my thoughts. None of my hopes can return them to their loved ones. None of my wishes can erase the hate that brought about this awful day. The best I can request is that we all remember those who have gone before us.   That we remember to say a word of thanks for our continued safety, especially to our military men, women and their families who protect us from every corner of this nation and around the world day and night so that we may continue to have the best that this world has to offer.

My final prayer is that the Islamic jihadists find no one else to kill.  But, unfortunately I know that is not a prayer that will be fulfilled right now. There is much work still to do before peace can prosper again.

I hope each of us willing to acknowledge the reality of our situation will take some time today, tomorrow or the day after to understand further why such darkness enveloped our world that morning of September 11th. That same evil from 9-11 is out there recruiting and indoctrinating a new generation to mistrust and dislike non-Muslims and they continue to expand their networks of hate throughout America and the world. Although many groups have been weakened and somewhat reduced in recent years, they have not been eradicated completely.  Our service men and women have been admirable in trying to defeat this modern foe, but their job is far from done. Our nation and people must not stop and must not give up as the mission is barely half done.  We need to remain strong, decisive and committed to stopping this evil before it consumes us and the world landscape completely.

Those of us who have a passing knowledge of history know full well most of our deadliest foes throughout the centuries have said what they mean and mean what they say. When they talk about removing a race of people from the face of the earth, take them at their word as they typically followed through on their threats (think Khan, Hitler, Mussolini, Lenin, Stalin, Chairman Mao, Pol Pot, just to name a few).  In our lifetime, we now we have UBL, his related and non-related fringe groups and the current President of Iran - Mahmoud Ahmadinejad. We deny history when we deny them and their powerful words about destroying us, our friends and our way of life.

When UBL invited Americans to come to Islam in his movie of the week broadcast a few days ago, he meant it. Convert now or expect another September morning in the near future. That's our option - Islam or death. He, his followers and those of his radical mindset (millions of them) mean it.   He made it clear to us, it is not about Iraq. It is not about capitalism. It is not about Middle Eastern oil. It is not about Democrats or Republicans.  It is not about being too American. It is not about the West. 

It 's about not being Muslim or Muslim enough. It's about Islam.

To understand more completely why September 11th happened and why there will be more days like this if we don't win this war against Islamic radicals, consider the following books:

Brigitte Gabriel - Because They Hate

Nonie Darwish - Now They Call Me Infidel

Mark Steyn - America Alone

Tony Blankley - The West's Last Chance

Robert Spencer - The Truth About Muhammad

Melanie Phillips - Londonistan

Steve Emerson - Jihad Incorporated

These books have all been reviewed here at L.A.W.   You are welcome to read my overview to see if these are books that will appeal to you.  Even if you choose to search elsewhere for information, at least look and learn.

I don't want bells of sadness being rung any longer for each life lost. I don't want days of remembrance when we have yet to destroy the ones who caused us grief to begin with.  I don't want more 9/11's if we can help it.  Until we understand, we cannot plan. Until we plan, we cannot win. Until we win, we live in fear or worse yet, we live in ignorance or denial altogether. Those are poor tributes to those who gave so much for all of us.

Remembrance and honor is important.  But, I want us to go much further than that.  We need to read, learn, understand, plan and eliminate the threat of Islamic ihadists once and for all.  Then, and only then, can the bells for complete victory ring out from sea to shining sea.

Regards,

Bridget Dupont-Tingley
Editor
The Local Area Watch