Let's say you already own a duplex in Salemtown and you don't buy my whole argument that we need to develop a more balanced housing stock for the sake of long-term growth in our neighborhood. Let's say that you are perfectly happy with your duplex and you do not understand what this scrape over the Salem Gardens properties is all about. I have not encountered any local duplex owners who feel that way, yet. But let's say there are some out there among the silent readers.
Allow me to take an economic angle and suggest to you that saturating the Salemtown market with more duplexes actually decreases demand for duplexes here, which decreases the value of your duplex at resale time. I own a single family home, which might lose a little value if more single family homes are built, but all strata of potential buyers in a market have an interest in single family homes if they can afford them. That is a shot in the arm to my home's resale value. A much more limited strata of the market demands duplexes, especially when single family homes are available.
So, it is a mistake to glut the market with duplexes, which will generally take longer to sell than single family homes. It hurts the long-term development of the neighborhood. But more importantly it hurts those of you who already have duplexes that will eventually be resold. It is in no Salemtown resident's interest to put 6 duplexes at the corner of 6th and Garfield; it only suits the narrow interests of the absentee landlords.
On the flip side, banks finance and appraise homes based upon comparable properties' appraisals. If the market is over-saturated with duplexes and there are only a few single-family homes in an area, then each single-family home being appraised may be forced to be compared to much lower valued properties in undeveloped areas of Salemtown, because comparables are typically pulled from only the previous 6 months of sales activity. We experienced some difficulty getting financing for our house because our single-family home was being compared to run-down properties being sold in Salemtown (even though they were being sold for the purpose of demolition or refirb). Only duplexes had been sold in the months leading up to the purchase of our home, and our bank initially rejected duplexes/zero lot line homes as comparables.
ReplyDeleteI wonder if that's a contributing factor for why there are a number of single family homes that have not been selling in recent months (or in over a year, if you look @ the brick house on 6th)!
The brick house you mention--or as I made fun of it before on Enclave, the "waterfall and fairies" house--has its own set of problems. It is a pandora's box of ugliness and high mark-up. I have yet to speak with anyone who finds it an attractive product.
ReplyDeleteBanks can draw comparisons from Werthan Lofts and Morgan Park Place for those townhome/condos (referred to as duplex(s) on this blog).
ReplyDeleteMike Balkert
And, of course, "... referred to as duplexes by the Planning Department, Planning Commission, and Metro Council."
ReplyDeleteI assume that when democratically appointed governing bodies refer to them as "duplexes," the title has some legitimacy beyond the marketing strategies of developers.
Don't forget the banks.
ReplyDeleteMike Balkert