MC housing boom ‘impressive’
By: Jeff Mayes
MICHIGAN CITY – If you’re ever planning to sell a home in Michigan City, now may be the time.
“There’s a pent-up demand for housing across Northwest Indiana,” Economic Development Corporation Michigan City executive director Clarence Hulse said. “A lot of brokers say they just can’t find enough housing. They know the demand is there.”
And according to a report using data from the Multiple Listing Service and Alan Landing of Heritage Appraisal, Michigan City is one of the hottest areas for home sales.
The report showed that over the last six years, home sales in the city were up 29.1 percent, and the average price paid for a home has risen 49.1 percent. It said people who sold their homes in 2017 instead of 2013 made an extra $12 million on those sales.
And the area encompassed by the report purposely excluded lakefront properties.
“What struck me about the data is that this is real estate outside of the beach area,” said Realtor Michael Conner of New Buffalo-based @properties. “It’s the first time we’ve seen the actual city outperform the lakefront. Figure that for 70 percent of the homes in Michigan City, prices are trending up.
“Those 355 homes that were sold last year were not investors. Investors won’t pay $100,000 for a single-family home. My guess is these were 355 homeowners who came to Michigan City to live.”
He said opinions are changing about the city.
“The perception of Michigan City has changed dramatically in the last several years,” Conner said. “In the past you had Chesterton and Valparaiso, and ‘Oh yeah, there’s Michigan City.’
“Now the perception has changed. What’s happening in Chicago hasn’t hurt either. Those people look here and see good schools, a thriving downtown and reasonable cost of living. The word is out.”
Hulse said, “A lot of people from Chicago or New Buffalo who passed through here are now moving here. And a lot of people are returning home. They might have left 10 years ago and now want to return and raise families here.”
Conner called it “a divergence of expectations. Outsiders see more value here than insiders might. We got $800,000 for a 32-unit apartment building, the highest price per door ever in Michigan City.”
City Planning Director Craig Phillips said the groundwork for the new real estate boom was laid when the city started getting serious about planning and developing the downtown area.
“Investors purchased and invested in properties downtown,” he said. “They took a risk on what became the Uptown Arts District. You might call them urban pioneers. They came into an area that had been neglected for a while. Now, people are talking about Michigan City in a positive way.”
“This is a wake-up call,” said City Controller Rich Murphy. “Downtown and south end development has brought property values up all around the city.”
“A city must have a vibrant downtown,” said Donald Babcock, economic development director for NIPSCO and president of the Michigan City Redevelopment Commission. “And the new hospital is a driver for upper- and middle-class housing on the south end. This is all very positive news.”
The “numbers should matter to the average resident,” Phillips said. “A homeowners’ investment is worth more. People ask what are the benefits of the work we’re doing to improve the north end, and this is a clear representation of that.”
Conner said property values had been “flat to declining” in prior years.
It’s good news for the city, too, Murphy said, “For the first time we have seen 3 percent growth in our tax base.”
Hulse said many of the new homeowners may have been drawn by the Promise Scholarship, which offers up to $20,000 in scholarships over four years to students whose families own homes.
Conner said there’s more to it than that.
“The Promise Scholarship could have been an influence, but this report shows 355 families bought homes. Why? The feeling over the last eight years is that this is a much better place to live than in the past. There is a reasonable cost of living, a high quality of life. I’ve never seen such overwhelming demand for people wanting to live in Michigan City.”
He expects the trend to continue – and move away from the downtown area.
“Every town needs cool to attract visitors, and we have that on the north side. But as real estate gets more expensive, then people will start moving south. If they can’t afford to live between 4th and 11th, then they will just go south.”
Babcock said, “A lot people took notice when the city bought the News-Dispatch building and relocated the MCPD.”
Phillips said the South Shore Double Track project will be another catalyst.
There will be new development following the project and “a lot of it will go south of 11th into Midtown,” he said. “We are seeing renewed focus on some areas we could not before.”
“The city acquired the old South Shore station and that project will be phenomenal for new growth farther south because all the north end real estate is pretty pricey,” Conner said.
Another upcoming project should spur real estate investment on the west side.
“When the NIPSCO generating station goes away in 2028, I think it will help bring growth on that end as well,” Babcock said. “That will be a busy place.”
Phillips said Mayor Ron Meer “is actively involved in discussions with NIPSCO on the future of that site,” which Hulse said “will change the entire west side.”
“The NIPSCO property will be a catalyst for the west side,” Phillips said. “Before it was even announced, we’d been talking with the National Park Service about an eastern access to Mount Baldy near the NIPSCO property.
“That will be a big deal, plus we will be opening a trail on the west side that goes from City Hall all the way to Hammond. Studies show property values increase near multi-use trails, and it will eventually go from the south side of Chicago to Friendship Gardens and all the way to New Buffalo.”
Conner said, “Sales are a good indication of what is happening, and we are now seeing some robust sales on the west side. There was a time when you could buy a home in the core of the city for $40,000, but no more, and those days are coming to the west side … you probably won’t recognize the place in 24-26 months.”
“Every realtor in the city is in favor of what this administration is doing and of what is going on,” Conner added. “This could’ve been a Tale of Two Cities with the lakefront up and the rest of the city dying. That is not the case here. We’re seeing positive headlines about the entire community. We want everyone to do well and not just the wealthiest.”
While planning and revitalization efforts have led to the impressive statistics, Babcock said, “This is just the beginning of the hard work that is in front of us. We know that pockets of the community are still struggling. But all property values are going up and we need to keep working so that will continue.
Murphy said when he was on the City Council, “many of these neighborhoods were at-risk, but now it’s getting better.”
Conner agreed that things have fallen into place nicely – and he expects 2019 to be even better than 2018 – but there is still work to do.
“This is not a coincidence,” he said. “It was projected to happen this way. If we did not have people who were progressive about development, this would not have happened. This would not happen organically.”
One goal will be to “take renters and qualify them as homeowners. We want people converted into homeownership, not priced out.”
Though even with the increased property values, he said, rents in the city remain reasonable – “it’s still very affordable, even to rent.”
Hulse said when he arrived in the city, “a lot of people were not selling for fear they might lose money. And now they are selling.”
But Murphy said the aim “is to get people not to leave at all, or to come back” and the “ultimate goal is to get our young people to stay here.”
He called it an inspiring time to live in the city.
“Our gritty, industrial past makes this an emotional comeback story. Now it’s a cool, diverse community with spectacular dunes and beaches. People will be priced out of Chicago and this is the place they will be heading.”
Sales and prices rising
Number of homes sold and average sale price in Michigan City over the last six years:
Year`Homes sold`Avg. price
Data compiled from Multiple Listings Services by Alan Landing of Heritage Appraisal for La Porte County Area 522.