Milwaukee s Condo Boom : 2008 Survey of Perceptions and Perspectives of Condominium Owners

Transcription

1 Center for Urban Initiatives and Research Milwaukee s Condo Boom : 2008 Survey of Perceptions and Perspectives of Condominium Owners Final Report January 2009 Prepared by John P. Kovari, G. Scott Davis, Joseph Cera, Justin Williams, and Dr. Stephen Percy Center for Urban Initiatives and Research University of Wisconsin-Milwaukee

2 Table of Contents Executive Summary... 2 Introduction... 6 Who Lives in Milwaukee Condominiums?... 7 Condominium Characteristics... 9 Condominium Ownership Characteristics Where Do Milwaukee Condo Owners Come From? Milwaukee Condo Owners Who Have A Primary Residence Elsewhere What Factors Influenced the Decision to Purchase a Milwaukee Condominium? Location: Likes and Dislikes Features: Likes and Dislikes Looking Back and Thinking Ahead Would the Condo Owners Do It All Over Again? Will the Condo Owners Still Reside in the Same Condo in Five Years? Appendix A: Target Area of 2008 Condominium Survey Appendix B: 2008 Condominium Owner Mail Survey Appendix C: Distribution of Age at Time of Purchase Appendix D: Factors Influencing Purchase Decision (By Age)* Appendix E: Factors Influencing Purchase Decision (By Marital Status) Appendix F: Factors Influencing Purchase Decision (By Condo Assessment) Appendix G: Factors Influencing Purchase Decision (By Primary Residence)

3 Executive Summary In recent years, Milwaukee has experienced rapid growth in condominiums both new construction and conversion of rental properties in downtown Milwaukee, the East Side, and the Third and Fifth Wards representing what some call a condo boom. Since 1997, roughly 3,000 condominiums have been built in downtown alone. 1 Media reports have highlighted this trend and offered anecdotal profiles of these residents, but a systematic survey about Milwaukee condo owners has not yet been conducted. This report presents the results of a combined mail and telephone survey of Milwaukee condominium owners conducted by the Center for Urban Initiatives and Research (CUIR) at the University of Wisconsin-Milwaukee. The purpose of the survey was to explore information about this condo boom and about area condo owners, such as the reasons they purchased their condo and their perspectives on condo living. The survey focused on condo owners, not apartment dwellers, in a targeted area within the city of Milwaukee, including downtown, and areas from the East Side and the Third and Fifth Wards. Key Findings While some popular perceptions about the condo boom in Milwaukee were well supported by our research, others were not. For example: The notion that visiting Chicagoans or other "out-of-state" people are driving the Milwaukee condo boom is not well-supported by this study s findings. Eighty-eight percent of condo owners use their condo as their primary residence, 12% do not. Only 3% of all survey respondents primarily reside in the Chicago area. Of those who live primarily in their Milwaukee condo, only 4% previously lived in Chicago. The opportunity for a lifestyle in an urban, central, and commercially-active setting dominated condo purchase decisions, as well as current evaluations of condo ownership. Milwaukee s downtown area stood out among condo owners as a unique, desirable destination in which to live. The urban lifestyle is highly attractive to these condo owners, whose likes about condo living greatly outweighed their dislikes about condo living. Yet, concern over issues such as parking and noise were clear themes also. Some media reports suggest that Milwaukee s condo boom is driven mostly by young professionals and retirees. While there are two somewhat distinct age groupings clustered around the age ranges of and 53-58, the average (median) age of the Milwaukee condo owner is 44 years old. The age division mentioned above was influential in determining some attitudes about both condo purchase decisions and current perceptions (likes and dislikes) about condo ownership. Younger owners were shown to appreciate more the investment opportunity condo ownership can provide, while older owners were more likely to value ease of maintenance. Also, younger owners were more likely to value proximity to dining, nightlife, and recreation, while older owners were more appreciative of cultural entertainment and views of the lake or city skyline. The assessed value of condos also exposed divisions among condo owners. Those residing in more expensive condos were more likely to favor entertainment, cultural concerns, views, and proximity to Lake Michigan into their overall views on condo ownership, while those in less expensive condos were more likely to focus on the importance of their condo as an investment in their evaluations. 1 Glauber, Bill. Milwaukee city, county populations in decline, forecasters say, Milwaukee Journal- Sentinel, 12 January

4 Who Lives in Milwaukee Condominiums? Demographic characteristics of Milwaukee condo owners include: Age. The average (median) Milwaukee condo owner is 44 years old, although there are two somewhat distinct clusters grouped around the ages of and Race/Ethnicity. Over 90% of respondents identified themselves as White or Caucasian, and less than 10% identified themselves as people of color. Marital Status. Thirty-nine percent said they were single and never married at the time they purchased their condo, 38% were married, 11% were divorced, 9% were unmarried and living with their partner, and 2% were widowed. Retirement. Twelve percent of all households surveyed were retired households, in which at least one person is retired, at the time of their condo purchase. Household Income. One of four respondents fell into the $100,000-$150,000 income category, the category with the largest number of respondents. With the media speculation surrounding the impact of empty-nesters on the condo boom, it was interesting to find that 18% of respondents reported that an empty-nest factor influenced their decision to purchase their Milwaukee condo. Empty-nest influence is defined at a child growing up and leaving home. Condominium Characteristics Respondents have an average of 2 bedrooms per condo. Also, 85% of all respondents have condos assessed under $500,000. Survey participants have owned their Milwaukee condo unit for an average of 3.3 years. Forty-four percent are first-time property owners. The vast majority (88%) of condo owners use their Milwaukee condo as their primary residence. Where Do Condominium Owners Come From? For those who use their Milwaukee condo as a primary residence, the majority (55%) previously lived outside the city of Milwaukee before moving into their condo. Forty-five percent previously resided within the city of Milwaukee. Prior to moving to their condo, 38% lived in a single-family home and 38% in an apartment. Over one in three of these residents (38%) decided to leave their previous home because they wanted to relocate to a specific location within the Milwaukee target area. For those who do not use their Milwaukee condo as a primary residence, 55% said they live at the Milwaukee condo part-time, and 22% said that a non-family member resides in the condo. Also, more than one in four of these respondents (27%) indicated that they live primarily outside of Wisconsin and the Chicago area. Eighty-four percent of these respondents said their primary residence is a single-family home. Factors Influencing the Decision to Purchase a Milwaukee Condominium When asked to rate the importance of various factors that influenced their decision to buy a Milwaukee condo, respondents rated location, urban lifestyle, ease of property maintenance, and proximity to restaurants, bars, and nightlife as the top factors. Of all the factors that were relevant in their decision to purchase a condo in Milwaukee, the most important factor was location, including the desire to be located within a specific neighborhood (e.g. downtown, Third Ward, etc.), area, and/or landmark. Nearly half (45%) of those who answered this question mentioned location as the most important factor in deciding to purchase a Milwaukee condo. 3

5 Urban lifestyle was the second most important factor (21%). These findings suggest that Milwaukee s condo boom was influenced by its uniqueness as an urban location and destination. Location: Likes & Dislikes Location was found to be the most important factor influencing condo purchase decisions. Condo owners were also asked what they like best and least about their Milwaukee condo now. Most frequently, respondents said that a central location or close proximity to everything is the thing they like most about their condo, in terms of location (22%). Conversely, respondents listed noise as the thing they dislike most about the location of their condo unit (24%). Respondents were also likely to dislike the difficulty or availability of parking (15%). Overall, condo owners listed more things that they like about their condo than what they dislike. Features: Likes & Dislikes Survey respondents were also asked about what they currently like most and least about the features and amenities of their condo. The most popular response, cited by 43% of respondents, was internal unit features, such as high ceilings, wood floors, large/many windows, and exposed brick (in order of popularity). Regarding the least liked feature/amenity, 26% cited overall lack of amenities. Specifically, condo owners said that they would like to have a gym (or that the existing one needs improvement). Other features cited by condo owners in this category include: elevator issues, common area(s) and/or lobby problems, pool (lack of or need for improvement), and laundry facilities. Looking Back & Thinking Ahead Respondents were asked about whether they would purchase their specific condo unit if they had the chance to do it all over again. 80% of those surveyed saying they would indeed buy their condo all over again. Among the few who said no, the economy was the top response, mentioned by 26% of the respondents. Residents were also asked whether they see themselves residing in their current condo five years from now. A majority (57%) said yes. Those who do not foresee themselves staying said that wanting different amenities (a bigger or smaller residence/yard) and family issues (e.g., having/wanting children) were the top two responses (28%). Furthermore, while 43% indicated that they do not see themselves staying in the same condo in five years, many indicated their intention to stay in the city of Milwaukee. Differences Among Groups All of the preceding questions were analyzed further to see if differences came up with respect to age, gender, marital status, condo assessment, and primary residence. For example, were older condo owners more likely to have different perspectives than younger condos owners, or different reasons for buying a Milwaukee condo? Overall, some significant differences were found between groups on various factors. Those who were over 40 years old (at the time they purchased their condo) were more likely on average than those under 40 years old to find the following factors more important in their condo purchase decision-making: ease of property maintenance, proximity to museums, galleries, and performing arts, view of downtown or city skyline, and river/lakefront views. Those under 40 were more likely to consider their condo purchase as an investment opportunity than respondents over 40, and thought being close to work was more important than those over 40. Married/cohabitating respondents were more likely than single respondents to consider the following influences more important: proximity to museums and galleries, proximity to performing arts, views of downtown or city skyline, river/lakefront views, and proximity to colleges. 4

6 As assessment value increases, so does the likelihood that a respondent considered the following factors more important: ease of property maintenance, proximity to Lake Michigan, proximity to museums and galleries, proximity to performing arts, view of downtown/city skyline, river/lakefront views, and proximity to local rivers. Respondents with lower assessed values were more likely than those with higher assessments to consider the condo purchase as an investment opportunity. Those who use their Milwaukee condo as a primary residence are more likely than others to consider the following factors important: urban lifestyle, ease of property maintenance, and proximity to restaurants, bars, and nightlife. 5

7 Introduction In recent years, Milwaukee has experienced rapid growth in condominiums both new construction and conversion of rental properties in downtown Milwaukee, the East Side, and the Third and Fifth Wards representing what some call a condo boom. Since 1997, roughly 3,000 condominiums have been built in downtown alone. 2 Media reports have highlighted this trend and offered anecdotal profiles of these residents, but a systematic survey about Milwaukee condo owners has not yet been conducted. This report presents the results of a combined mail and telephone survey of Milwaukee condominium owners conducted by the Center for Urban Initiatives and Research (CUIR) at the University of Wisconsin-Milwaukee. The purpose of the survey was to explore information about this condo boom and area condo owners, such as the reasons they purchased their condo and their perspectives on condo living. University Club Tower at 825 North Prospect Avenue. Source: Urbanmilwaukee.com. The survey focused solely on condo owners, not apartment residents. Only owners of condos built or converted in the past 10 years were included. Corporate owners, trusts, LLCs, and LLPs were omitted. The target area was limited to downtown Milwaukee, a portion of the East Side, and the Third and Fifth Wards. The area was bounded by North Avenue on the north, Virginia Avenue on the south, Lake Michigan on the east, and 10 th Street on the west. The map of the target area is in Appendix A. With the hope of capturing a broad cross-section, the target area includes a diversity of condominiums that vary in different ways. For example, this study includes condo owners from four-unit row houses, studios, warehouse lofts, and lakefront towers. These units not only vary substantially by their neighborhood and location, but their assessed value, size, views, and amenities as well. The average size of condos within the target area is 1,406 square feet. Median assessed value is $259,000. Of all the targeted condos, 53% are newly constructed, and 47% are conversions. 3 The survey was conducted between October and December In total, 2,606 survey respondents were contacted (2,339 via mail and 267 via telephone interview), and 804 completed surveys (649 mail and 155 telephone) were collected. The effective response rate was 31%. This report represents the results of combined mail and telephone surveys. The survey instrument consists of 32 individual questions. All responses are strictly anonymous, and respondents were not asked to write their name anywhere on the survey. A copy of the Mail Survey can be found in Appendix B. Also, summary tables of all responses (including missing values) are available upon request. 2 Glauber, Bill. Milwaukee city, county populations in decline, forecasters say, Milwaukee Journal- Sentinel, 12 January All figures reflect 2008 data from The Milwaukee Property File (MPROP), and the City of Milwaukee Assessor s Office. 6

8 Who Lives in Milwaukee Condominiums? Media reports have provided anecdotal evidence about who is fueling the condo boom in Milwaukee, suggesting that new condo owners are Chicagoans, mostly retirees, or mostly young urban professionals ( yuppies ). The following section highlights key characteristics of this relatively unknown population and answers the question: Who lives in Milwaukee s new condos? Age. The age of respondents ranged from 23 to 83 years old, with an average (median) age of 44 years old. The estimated median age of city of Milwaukee residents is 32 years old. 4 Condo owners on average appear to be older than the average Milwaukeean. While the median age of condo owners is 44 years old, further analysis shows that condo owner ages seem to be grouped around age ranges of and (see Appendix C). With respect to their perspectives on condo living, significant differences between these two groups (a younger and an older group) will be described throughout this report. Race/Ethnicity. Over 90% of respondents identified themselves as White or Caucasian, and less than 10% identified themselves as a person of color. Ninety-two percent are White or Caucasian, three percent are Asian, two percent are Black or African-American, two percent are Hispanic or Latino, less than one percent are American Indian, and almost two percent identified themselves in the Other category. These figures are dramatically different from the aggregate Milwaukee estimates in 2007; slightly more than 45% of Milwaukeeans are White or Caucasian. Marital Status. Table 1 lists the responses for a survey question which asked respondents their martial status at the time of their condo purchase. Thirty-nine percent of those surveyed said they were single and never married, and 38% indicated that they were married. Eleven percent were divorced, nine percent were unmarried and living with a partner, and 2% were widowed. In comparison, 29% of all Milwaukee households are married-couple households. Table 1. Marital Status at Time of Purchase of Milwaukee Condo Owner Respondents Status Count Frequency 5 Married % Unmarried living with partner 73 9% Single never married % Divorced 87 11% Widowed 16 2% Total % Retirement Status. There were 90 households (12% of all households surveyed) in which at least one spouse or partner was considered retired at the time the condo was purchased. Families with Children & Empty-Nesters. Among survey respondents, 39% indicated that they have children. All ages are included in this figure, even those children over 18 years old. Respondents who have children were asked whether their children growing up and leaving home influenced their decision to purchase their condo (see Table 2 on the following page). Of the 303 respondents answering this question, 49% said that their children growing up and leaving home did indeed impact their decision to buy their condo. Parents whose children have grown up and left home are 4 Estimates of city of Milwaukee demographic information come from the U.S. Census Bureau s American Community Survey 3-Year Estimates report. The U.S. Census figures for median age include children, while this study does not, possibly inflating the median age of the target area population. 5 Percent totals may not equal 100% because of rounding. 7

9 often referred to as empty-nesters. Thus, it is estimated that 18% of all survey respondents had an empty-nester influence in their decision to purchase their condo. Table 2. Impact of Children Growing Up and Leaving Home on Condo Owners Decision to Purchase Condo Response Count Frequency Yes % No % Not Applicable 28 9% Total % Household Income. Survey participants annual household/family income is listed in Table 3 below. The income category with the highest frequency was the $100,001 - $150,000 range. Over three-quarters of all respondents make less than $250,000 per year. In comparison, the median household income in the city of Milwaukee in 2007 was $35,223 and $50,007 for the U.S. Table 3. Household/Family Income Income Level Count Frequency Less than $50, % $50,001-$75, % $75,001-$100, % $100,001-$150, % $150,001-$250, % More than $250, % Total % Riverbridge Condominiums, 1915 North Water Street. Source: Urbanmilwaukee.com. 8

10 Condominium Characteristics Survey respondents were also asked about the number of bedrooms in their condo, as well as their condo s assessed value. Average Number of Bedrooms. Regarding number of bedrooms, responses ranged from 0 to 4 bedrooms, with an average (median) of 2 bedrooms per condo. Average size of targeted condos is 1,406 square feet. Current Assessed Value. Table 4 lists the breakdown of current condo assessed values as reported by survey respondents. Thirty-nine percent of survey respondents indicated that their condo was assessed at under $250,000 and 46% answered that their condo was assessed from between $250,000 to $500,000. Very few (15%) indicated that their condo was over $500,000 in assessed value. Median assessed value of targeted condos is $259,000. Table 4. Current Assessed Value of Respondent Condominiums Assessed Value Count Frequency Under $250, % $250,000-$500, % Over $500, % Total % The Waterfront Condominiums, 130 South Water Street. Source: Urbanmilwaukee.com. 9

11 Condominium Ownership Characteristics Years of Ownership. Survey participants were asked how many years they have owned their Milwaukee condo unit. Respondents reported an average of 3.3 years of ownership. First-Time Ownership. Forty-four percent of respondents indicated that this Milwaukee condo was the first residence that they have ever owned. Primary Residence. The vast majority of survey respondents (88%) indicated that this Milwaukee condo was their primary place of residence. Where Do Milwaukee Condo Owners Come From? The following section refers only to those respondents who use their Milwaukee condo as their primary residence. Prior Residence. Condo owners who live in their Milwaukee condo as their primary residence were asked about the location of their prior residence (Table 5). A majority of respondents (55%) indicated that their previous residence was outside the city of Milwaukee. Forty-five percent said that they previously resided in the city of Milwaukee. Table 5. Prior Residence of Respondents with Primary Residence in Milwaukee Condo Prior Residence Count Frequency City of Milwaukee % Suburban Community in Milwaukee County % Ozaukee County 24 3% Washington County 4 1% Waukesha County 60 9% Another place in Wisconsin 38 5% Chicago area 28 4% Elsewhere outside of state 95 14% Total % Type of Prior Residence. Thirty-eight percent of the respondents who use their Milwaukee condo as a primary residence previously lived in a single-family home and 38% previously lived in an apartment (see Table 6). Table 6. Types of Homes of Respondents with Primary Residence in Milwaukee Condo Type of Home Count Frequency Apartment % Single-family home % Condominium % Duplex 47 7% Other 12 2% Total % Fifty-one percent owned their previous residence, while 49% were renters prior to purchasing their Milwaukee condo. Reasons for Moving from Previous Residence. Survey respondents were asked to provide their top three reasons for moving away from their previous residence. Table 7 lists the ten most frequently mentioned responses. 10

12 Table 7. Reasons for Moving from Previous Residence Reason Count Frequency* Location / Area / Neighborhood % Desire to Own Property / Ready to Buy % Life / Lifestyle Change / Wanted Change % Return / Relocate to Area % Condo Unit- Related (Appearance, Design, Etc.) % Affordability / Price / Cost / Good Market / Opportunity % Ease of / Less Maintenance 96 13% Condo as Investment / Build Equity 94 13% Size of Condo (Bigger / Smaller) 91 13% Urban Lifestyle 80 11% * Percentage totals are over 100% as many survey participants gave more than one response. Of the 713 respondents to this question, location was the top reason for moving away from their previous residence. Location as a response includes those who wanted to live in a specific area (such as close to the lake or river) or neighborhood (e.g., Brewer s Hill, Third Ward). Among these respondents, wanting to live downtown was the most frequently mentioned answer. Respondents in this category also mentioned that they wanted to live in a better area or neighborhood: better being a varied concept which could entail more upscale, less crime, closer activities, etc. Next, 31% indicated that they wanted to own their own property or build equity with owning a condo. The third-most popular reason for leaving one s last home was a life change or wanted to change. Many scenarios fit in this category, including a career change, finishing college, marriage, divorce, or retirement. Milwaukee Condo Owners Who Have A Primary Residence Elsewhere Twelve percent of all survey respondents said that they did not use their Milwaukee condo unit as their primary residence. Only these respondents (who have a primary residence someplace other than their Milwaukee condo) answered the following questions. Residency Situation at Milwaukee Condo. Among these respondents, 56% said they live at the Milwaukee condo part-time, and 23% said that a non-family member resides in the condo. Table 8 provides the full breakdown. Table 8. Residency Situation in Milwaukee Condo for Owners with Another Primary Residence Response Count Frequency I live there part-time, but my primary residence is elsewhere % Someone else (non-family) lives there % A family member lives there % The condo is currently vacant. 1 1% Total % 11

13 Location of Primary Residence. Table 9 lists the breakdown of condo owners not using their Milwaukee condo and the location of their primary residence. More than one in four respondents (27%) with an alternate primary residence indicated that they live primarily outside of Wisconsin and the Chicago area. The next most frequently mentioned category was the Chicago area (20%). Table 9. Location of Primary Residence for Those Not Using Milwaukee Condo as Primary Residence Primary Residence Count Frequency City of Milwaukee 5 6% Suburban Community in Milwaukee County 7 8% Ozaukee County 5 6% Washington County 4 4% Waukesha County 11 12% Another place in Wisconsin 16 18% Chicago area 18 20% Elsewhere outside of state 24 27% Total % Type of Residence. Respondents with an alternate primary residence were also asked what type of home is their primary residence. Table 10 lists all responses. Seventy-six respondents (84%) indicated that their primary residence is a single-family home, and 12% indicated that their primary residence is a condo. Table 10. Types of Homes of Respondents with Other Primary Residences Type of Home Count Frequency Single-family home 76 84% Condominium 11 12% Apartment 2 2% Duplex 1 1% Other 1 1% Total % Primary Residence: Own or Rent. Ninety-six percent of those who have another primary residence own rather than rent. 12

14 What Factors Influenced the Decision to Purchase a Milwaukee Condominium? Several questions were asked of all respondents to help determine which factors are relevant in the decision to purchase a condo in this study s target area. Survey participants were asked the following question: People think about many things before buying a condo. Please indicate how important each factor was regarding your decision to purchase your condo in Milwaukee. 6 Respondents could answer along a four-point scale, specifically Very important, Somewhat important, Not very important, and Not important at all. An option was also given for Not Sure / No Opinion. Figure 1 provides a list of all the factors provided in the surveys along with each factor s mean score. Figure 1: Mean Importance of Factors in Condo Purchase Decision Urban Lifestyle Ease of Property Maintenance Close to Restaurants, Bars, and Nightlife Close to Lake Michigan Investment Opportunity Close to Museums and Galleries Close to Parks and Recreation Close to Performing Arts View of Downtown or City Skyline Close to Work Riverfront or Lakefront Views Close to Retail Stores Close to Local Rivers Close to Colleges and Universities Not at all important < > Very Important Figure 1 shows that among the survey respondents, urban lifestyle is the highest rated factor in deciding to purchase a condo. Urban lifestyle received an average importance rating of 3.69 out of 4. Ease of property maintenance was the next highest rated factor, on average, in deciding to purchase a condo. 6 The question asked in the telephone interview was slightly different in order to clarify the question for telephone interview participants. 13

15 Proximity to restaurants, bars, and nightlife was the third highest rated factor influencing the decision to buy a Milwaukee condo. Further analysis reveals that some differences exist among specific demographic groups. 7 Four demographic categories were investigated to determine whether subgroups thought differently about the various influences listed in Figure 1. This study looked at marital status and age (both at the time of purchase), primary residence, and condo assessment. Marital status was divided into two groups: married (or cohabitating with a partner) and not married. Age was divided into those under and over 40 years old. Primary residence was divided into those who used their Milwaukee condo as their primary residence and those who primarily resided elsewhere. Condo assessment was divided into three subgroups as delineated in Table 4 above (page 9). Overall, when looking at differences between these groups, the top three most important influences did not change. Urban lifestyle, ease of property maintenance, and being close to restaurants, bars, and nightlife were the most important influences on average for Milwaukee condo owners. However, some differences did exist. Figures with individual mean scores for all the factors by subgroup are listed in several appendices found at the end of this report. Several differences exist between age groups. Those who were over 40 years old (at the time they purchased their condo) were more likely on average than those under 40 years old to find the following factors more important in their condo purchase decision-making: ease of property maintenance, proximity to museums, galleries, and performing arts, view of downtown or city skyline, and river/lakefront views (Appendix D). Those under 40 were more likely to consider their condo purchase as an investment opportunity than respondents over 40, and thought being close to work was more important than those over 40. Married respondents were more likely than unmarried respondents to consider the following influences more important: proximity to museums and galleries, proximity to performing arts, views of downtown or city skyline, river/lakefront views, and proximity colleges (Appendix E). Several differences also are apparent with respect to level of condo assessment. As assessment level increases, so does the likelihood that a respondent considered the following factors more important: ease of property maintenance, proximity to Lake Michigan, proximity to museums and galleries, proximity to performing arts, view of downtown/city skyline, river/lakefront views, and proximity to local rivers. Respondents with lower assessed values were more likely than those with higher assessments to consider the condo purchase as an investment opportunity (Appendix F). Those who use their Milwaukee condo as a primary residence are more likely than others to consider the following factors important: urban lifestyle, ease of property maintenance, and proximity to restaurants, bars, and nightlife (Appendix G). 7 ANOVA tests were utilized to measure statistical differences of mean scores between subgroups. Statistical significance was captured at the p < level. 14

16 Table 11 provides a breakdown of each factor by demographic group. If it is more likely that a group considered a factor more important than its counter-group, the cell is denoted by a + sign, and -" if it is considered less important than its counter-group. For example, as noted above, as a respondent s condo assessment increases, so does the likelihood that he or she considered river/lakefront views important in his or her condo purchase decision. That cell is denoted with a green + sign. Factor Table 11. Importance of Various Condo Purchase Influences by Demographic Group Married or $500K+ Over 40 Living with Condo Years Old Partner Assessment Primary Residence Urban Lifestyle + + Ease of Property Maintenance Close to Restaurants, Bars, and Nightlife - + Close to Lake Michigan + Investment Opportunity Close to Museums and Galleries Close to Parks and Recreation - Close to Performing Arts View of Downtown or City Skyline Close to Work Riverfront or Lakefront Views Close to Retail Stores - Close to Local Rivers + + Close to Colleges and Universities + + Other Important Factors. Survey participants were asked an open-ended question about whether there was anything else that was important relative to their decision to purchase their Milwaukee condo. Table 12 lists the top ten responses to this question. Table 12. Other Reasons for Condo Purchase Factor Count Frequency* Affordability / Price / Good Market / Opportunity 72 19% Area / Location / Neighborhood 69 19% Close to Activities / Businesses / Family 64 17% Garage / Parking Related 48 13% Safety / Security 37 10% Unit-Related (Size / Rooms / Options) 36 10% Commute-Related 27 7% Walkability / Biking-Friendly 27 7% Construction - Good / Quality Finishes 24 6% Design 23 6% * Percentage totals are over 100% as many survey participants gave more than one response. Three hundred seventy-one respondents answered this question. The most frequently mentioned response among these respondents was affordability or price of the condo and location. The affordability category also includes those who mentioned that their Milwaukee condo purchase was influenced by a good market or was a good opportunity. Nineteen percent also indicated that location or area was 15

17 important, such as a specific neighborhood or street. Third, 17% wrote that proximity to various activities, businesses, and family was important in their decision to purchase their Milwaukee condo. Specifically, people indicated that it was important that their condo was close to retail stores, other specific businesses (e.g., Oriental Theater, etc.), and family members. Most Important Factor. After asking respondents to rate each of a variety of factors, the survey next asked them, using open-ended questions, to suggest in their own words what the most important factor was in their condo purchase decision. The most frequently mentioned factor was location, including the desire to be located within a specific neighborhood (e.g. downtown, Third Ward, etc.), area, and/or landmark. Nearly half (45%) of those who answered this question mentioned location as the most important factor in deciding to purchase a Milwaukee condo. Urban lifestyle was the second most important factor (21%). Table 13 lists the remaining most important factors as given by survey respondents. Table 13. Most Important Factor in Decision to Purchase Condo Factor Count Frequency* Area / Location % Urban Lifestyle % Close to / More Activities / Events / Entertainment % Condo as Investment 80 11% Affordability / Price / Cost / Good Market / Opportunity 51 7% Ease of / Less Maintenance 46 6% View / Views 46 6% Condo Unit (Appearance, Etc.) 42 6% Walkability / Bike-ability 26 3% Life / Lifestyle Change / Wanted Change 25 3% * Percentage totals are over 100% as many survey participants gave more than one response. Urban lifestyle is a complex concept and can be open to interpretation; several factors found in Table 12 can make up what one individual might consider as urban lifestyle. More importantly, though, the findings reinforce the those from Figure 1 (on page 14), which shows that location and urban lifestyle dynamics are at the heart of the condo boom, and not necessarily other commonly implied factors such as retirement status and/or household status (i.e. households with children). When looking at differences among groups, we find that area/location, urban lifestyle, and proximity to activities remain the most important factors of respondents condo purchase decisions. However, a few changes are noticeable. With respect to age, views were more important to those over 40 years old, while purchasing their condo as an investment opportunity was more important to those under 40. Regarding assessed value, it became clear that respondents with condos assessed over $500,000 were more interested in views than being close to activities and entertainment. Life or lifestyle changes (such as marriage or divorce) were relatively strong influences for respondents that purchased a condo over $500,

18 More Important: Condo Features, Location, or Both? Survey respondents were asked: Considering all that went into your purchase decision, what was more important condo features or condo location? Forty-five percent said that location was most important, 10% said condo features, and 45% said that both location and features were equally important (see Figure 2). Figure 2. Most Important Factor in Condo Purchase: Location, Features, or Both 45% Location 10% Features Both Equally 45% Interestingly, respondents who primarily live in Milwaukee were somewhat more likely to choose features than their counterparts who primarily live elsewhere, who emphasized location over features. Eleven percent of primary residers chose the features-only option compared with only 3% of those who primary reside elsewhere. Also, among respondents with condos assessed under $250,000, location was more important, whereas location and features was most important for respondents with condos over $500,

19 Location: Likes and Dislikes Location of Milwaukee condos has emerged as a major factor/influence in people s decision to purchase a condo. Milwaukee s condo boom may thus be perceived as driven by the desirability of the target area as a distinct location and destination. Whereas the earlier sections explored various factors influence on condo owners at the time of purchase, this section will examine what survey participants like most and least about their condo s location now. One interesting overall finding of this section is that condo owners offered many more things that they like about their condo than things they dislike. Location: Most Liked Aspects. Respondents were asked to describe the things they like most about their condo, in terms of location. Seven hundred seventy-six respondents answered this question. Respondents were free to list as many things as they like; up to the first three distinct responses were recorded for each respondent. Table 14 lists the top ten things liked most by survey respondents. Table 14. Things People Like Most About Their Condo, in Terms of Location Response Count Frequency* Central location/close to everything/walkability % Proximity to restaurants % Location (in general) % Proximity / access to lake / river % Views % Close to work / short commute to work % Nightlife / bars % Shops / groceries / retail / stores / boutiques 89 11% Safety / safe area / good neighborhood 48 6% Performance venues / arts 36 5% * Percentage totals are over 100% as many survey participants gave more than one response. Most frequently, respondents said that a general, central location or close proximity to everything was the thing they liked most about their condo, in terms of location (22%). Respondents also frequently listed proximity to restaurants as a thing they liked most about the location of their condo (22%). Some differences among demographic groups were discovered: What stood out most was that views became much more likely to be mentioned by a respondent as his or her condo s assessed value increased. Respondents with condos over $500,000 indicated that they liked their condos views most, probably due to the reality that better views cost more. Also, conversely, commute times and nightlife were most liked more frequently by those with condos under $250,000. With respect to age, those under 40 years old were more likely to like their condo s proximity to restaurants and nightlife. Views were more appreciated by respondents over 40 years old. For those who do not use their Milwaukee condo as their primary residence, proximity to work is less important, and proximity to the Lake/river and views are much more important. Significant differences were also found with respect to gender. Women were more likely to mention proximity to performance venues/theaters/arts and central location, and less likely to mention views, than men. Location: Least Liked Aspects. Respondents were also asked to list the things they liked least about the location of their condo (see Table 15). Seven hundred twenty-four respondents answered this question. Once again, respondents were free to name as many specific things as they wanted, but only the first three distinct responses were recorded for each respondent. Most often, respondents listed noise as the 18

20 thing they like least about the location of their condo unit (24%). Respondents were also likely to dislike the difficulty or availability of parking (15%), or forms of crime such as vandalism, theft, burglary, and/or violence (12%). Interestingly, forty-seven respondents (7%) gave a distinct response about how they liked everything (or disliked nothing) about the location of their condo. Table 15. Things People Like Least About Their Condo, in Terms of Location Response Count Frequency* Noise % Parking % Crime 84 12% Traffic 60 8% Too far from stores / retail 50 7% Taxes 47 6% Summerfest / Harley Fest / festivals 47 6% Drunks / bars 30 4% Urban decay / decaying properties 24 3% Overdevelopment / undesirable new development 19 3% * Percentage totals are over 100% as many survey participants gave more than one response. Regardless of demographics, noise was consistently cited as the most disliked aspect. However, when considering the age of respondents, younger respondents cited crime more often than older respondents. Conversely, older residents were more likely to mention festivals as their least liked aspect. With respect to assessed value, respondents with higher valued condos were more likely to identify festivals and taxes, and less likely to mention crime. Men were much more likely to mention taxes than women. Also, while men were more likely to dislike traffic issues, women were more likely to dislike parking issues. Lastly, while parking is a top concern, it was much more important comparatively for those who do not use their condo as a primary residence. They were also less likely to mention crime as an issue. The Bluff Homes Condominiums, East Reservoir Avenue. Source: Urbanmilwaukee.com. 19

21 Features: Likes and Dislikes Although condominium location seems to be more of a central influence when deciding about buying a condo, the survey also asked about condo features. In particular, what features condo owners like most and like least. References to location and no opinions were removed from analysis of the following two questions to more clearly highlight specific features and amenities Most Liked Features. Table 16 below provides a list of the top ten features or amenities liked most by Milwaukee condo owners. Six hundred eighty-one people gave open-ended responses. The most popular feature, cited by 43% of respondents, was internal unit features, such as high ceilings, wood floors, large/many windows, and exposed brick (in order of popularity). The next most highly liked feature was parking or garage-related amenities (33%). The design and layout of the condo unit was mentioned third-most frequently (30%). Table 16. Features Liked Most by Milwaukee Condo Owners Response Count Frequency Features - Internal to Unit % Parking / Garage-Related % Design and Layout of Unit % Amenities - External to Unit % Outdoor Living Spaces % Views % Room(s) - Specific in Unit 82 12% Unit Size (Larger/Smaller) 71 10% Construction - Quality / Materials 69 10% Low / Ease of Maintenance 59 9% * Percentage totals are over 100% as many survey participants gave more than one response. Considering differences among respondents by condo assessment, respondents with higher valued condos were more likely to cite quality construction and less likely to cite their building s amenities (e.g. workout rooms, pool, or community room). There were no differences among respondents with respect to age, gender, marital status, or primary residence. Least Liked Features. When asked about what features in their condo unit they liked least, 26% indicated lacking or needed amenities. Specifically, condo owners said that they would like to have a gym (or that the existing one needs improvement). Other features cited by condo owners in this category include: elevator issues, common area(s) and/or lobby problems, pool (lack of or need for improvement), and laundry facilities. Table 17 provides the top ten disliked features. Parking / garage problems was the next most frequently mentioned feature liked least by condo owners (19%). Lack of parking availability in general and lack of guest parking were the two top issues in this category. Also, the third least liked feature cited was poor construction and craftsmanship in general, which included soundproofing. 20

22 Table 17. Features Liked Least by Milwaukee Condo Owners Response Count Frequency * Missing or Lacking Amenities % Parking / Garage Problems and Issues % Construction - Poor Quality / Craftsmanship 65 12% Features Problems Internal to Unit 60 11% Lack of Closet / Storage Space 55 10% Outdoor Living Spaces - Needed / Too Small 52 9% Prohibitive Costs / Fees / Taxes 43 8% Unit Size - Too Small 43 8% Poor Building Management / Poor Upkeep 41 7% Building-Related Problems 39 7% * Percentage totals are over 100% as many survey participants gave more than one response. Some interesting findings arose when analyzing differences among respondents by demographics. First, regarding condo assessment levels, respondents with condos over $500,000 were more likely to dislike missing amenities (e.g. workout areas, elevators, pool, etc.) and less likely to bring up small or needed outdoor spaces. Women were more likely than men to mention parking- or garage-related issues, while men were more likely to bring up the issue of high taxes and fees. There were very little differences among respondents by primary residence, age, and marital status. 21

23 Looking Back and Thinking Ahead This study also examines the commitment of condo owners to their condo purchase decision. The two main questions asked in the survey are described in the following section. Would the Condo Owners Do It All Over Again? Respondents were asked about whether they would purchase their specific condo unit again if they had the chance to do it all over again. Eighty percent of those surveyed said they would buy their condo all over again. While no differences were found with respect to age, condo owners with higher assessed values were more likely to say they would buy their condo all over again. Seventy-eight percent of condo owners with condos under $250,000 answered yes, while 87% of owners with condos over $500,000 answered yes. Table 18. Why Residents Would Not Purchase Their Current Condo in Retrospect Reason for Not Purchasing Count Frequency * Housing Market / Economy / Too Many Condos Drive Down Market Price 45 26% More / Different Amenities 42 24% High Taxes / Fees 22 13% Poor Quality of the Residence 20 12% Realtor / Developer Problem / Issue 13 8% Location 12 7% Different Housing Option (Purchase a Single Family Home / Rent) 11 6% Government / Condo Association Issues 8 5% New High Rise will Block Current View 7 4% Other 15 9% * Percentage totals are over 100% as many survey participants gave more than one response. One hundred seventy-three respondents offered explanations as to why they would not purchase their current condo if they could do it over again (see Table 18). Among these few, 26% listed that the (poor) housing market/economy would keep them from repurchasing their current home if they could do it all over again. Twenty-four percent listed that they would not purchase their current residence because they would like different amenities, including a larger / smaller unit, parking spaces, etc. The third most frequently cited reason was that taxes and/or condo fees are much too high. Will the Condo Owners Still Reside in the Same Condo in Five Years? Residents were asked whether they see themselves residing in their current condo five years from now. A majority (57%) said yes. However, the desire to leave their current condo in five years does not necessarily translate into moving to the suburbs or abandoning the city, or even the Milwaukee area. Younger respondents and those with lower assessed values were more likely to want to move in five years. For example, 71% of condo owners over 45 years old said they still see themselves in the same condo in five years, while only 41% of condo owners under 45 thought similarly. Respondents that answered no (they did not foresee themselves staying in their current residence) were asked why they would not stay. Table 19 displays the most common open-ended responses offered. Table 19. Why Residents Would Not Remain in Current Condo in Five Years Reason for Selling Count Frequency * Amenities (e.g., larger/smaller home, yard, etc.) 96 28% Family (starting a family/family change) 96 28% New Location 74 21% 22

24 Taxes/Condo Fees 47 14% Want Single-Family Home 47 14% Job/Closer to Work 26 7% Schools 16 5% Retiring/Old Age 16 5% Crime 8 2% Convert to Rental Property 8 2% * Percentage totals are over 100% as many survey participants gave more than one response. Amenities and family were the top two responses why respondents would not remain in their current home (28%). Wanting to move to a new location received the third-highest number of responses (21%). Within this category, respondents indicated that they would be moving out of state, would want to move to the suburbs, or that they would like to live in a different area within Milwaukee. Interestingly, almost all of the 47 respondents who mentioned that they want to buy a single-family home were under 40 years old, only one was over

25 Appendix A: Target Area of 2008 Condominium Survey 24

26 Appendix B: 2008 Condominium Owner Mail Survey 25