Why are Rochester landowners so proud of their dirt? (Duluth: transplants, for sale)

[kazinfl]

I am considering a relocation and Rochester is on a short list of places I could land. I've been looking at residential lots both in person and thru online MLS listings and, for the life of me, I can't figure out why lot prices are so high in Rochester.

I'm looking at $50-65K lots and can't believe all I can get in the city is 0.2 acres in what used to be a corn field - not a tree to be found. Here is what I can get for the same price in other random cities around the country.

Raleigh: 0.5 - 1 acre wooded lots or 0.25-0.5 acre golf course lots
Omaha: 1 acre lots or 1/3 acre lots on an Arnold Palmer designed golf course
Colorado Springs: 0.5 acres with mountain views
Duluth, MN: not easy to find lots this expensive, but those I found were multi-acre parcels or 0.5 acre lots in 120 acres of parkland with hiking/nature trails

In Rochester, I will get some dirt (clay to be more accurate) and the ability to watch at least 8 of my neighbors at once from any spot on my property. I don't consider the latter feature to be a benefit.

I know the prices are not caused by high demand since many lots have been for sale for over a year and several for over three years.

What am I missing?

[GraniteStater]

^
Job growth in Rochester has been stronger than just about any small metro in the country. Median household income growth has also been about the strongest as well. Those are probably two key reasons why landowners are trying to sell lots for top dollar. (It doesn't mean that they will get their price, though).

[fromupthere]

Look at some of the smaller towns south of Rochester. About 2 or 3 years ago, some of them were selling up to 1-2 acres for under $25,000.

[kazinfl]

Originally Posted by fromupthere

Look at some of the smaller towns south of Rochester. About 2 or 3 years ago, some of them were selling up to 1-2 acres for under $25,000.

Thanks, but I'm not interested in living outside the city. I know the area, I know the commute is short, I know the schools are good. Not interested.

[Camden Northsider]

I've also noticed what I view as strangeness in property values in Rochester (I have family that lives there that is planning on selling/buying in the near future so have checked out the MLS a couple of times)- what seemed off to me was the disparity between values of really nice, quality-built homes in established neighborhoods (both older neighborhoods and homes built between the 50s-70s) and the values of not-so-nice-looking brand new homes in new developments- although some of this is probably to be expected in a city of Rochester's size, the disparities between the two seemed larger than usual and, being familiar with Rochester, cannot be explained by anything to do with the quality of the neighborhoods I was looking at.

I have some theories. I think what you're seeing relates to both the job growth/stability previously mentioned, as well as the demographics of the folks moving to the area. Although the construction boom in Rochester slowed in recent years (just like the rest of the country)- where things seem to differ with Rochester is that rather than the boom coming to a complete halt, like it did everywhere else, developers still seem to be able to sell lots and new homes to people in Rochester, albeit just at a much slower pace nowadays. The demographics of recent transplants and others being recruited to move there (Mayo, IBM) also seem to be on the younger end of the spectrum, a demographic that I think is likely a little more predisposed to want a brand new home in a new development full of younger families, which I think is heightened by the fact that a lot of the transplants are likely coming from other smaller midwestern cities and smaller towns.

So in other words, there's still a market for land to build new homes in Rochester. Even if a developer has to hold onto lots for a few years, the risk is less in Rochester than say an exurban area of the Twin Cities, as there will always be new pools of young recruits at a wide range of income brackets moving to Rochester through Mayo and IBM (and/or current residents moving up the ladder) that are going to want to build that new dream home in or very close to the city.

P.S.- You're very right about the clay- hope you're not an avid gardener!

[BillWallace]

Doing a quick search in MLS I see 90 lots within 6 miles of downtown Rochester that are less than $75k and more than .25 acres. 57 of them are more than .33 acres. 21 of them are more than .5 acres.

Seems like you should be able to find something that meets your needs from that many choices.

[pepe1]

When a new residential development is constructed, the cost of installing municipal utilities (water, sewer, pavements) is either paid by the city or the developer (who pays varies from city to city). Rochester may be one of the cities that requires the developer to pay for these installations - thus the developer is passing the cost onto the buyer.

[kazinfl]

Thanks Camden Northsider. Interesting perspective. Yes, the primary reason I am looking at lots is because of all the "not-so-nice-looking brand new homes" and the lack of available homes in older established neighborhoods with some character.

I agree with your view of younger families from smaller midwestern cities and smaller towns driving the type of development. Most of the homes I have viewed are clearly designed for younger families. The main level of the two-story homes are nearly all the same. It's what I call the landing strip design - kitchen which flows into informal dining which flows into family room with no walls or architectural details of any kind - one big runway so you can keep an eye on the little ones. The hundreds of rectangle split levels with a three-car attached garage in the front are so UGLY. Drop me in the driveway of a split level and I can walk around half the house on the outside and tell you the floor plan of the house without even going in.

I'm also guessing most of the families which came from smaller midwestern cities have to be from the Dakotas and Iowa. No disrespect to those places, but who else would be happy living in an area where there isn't a tree to be found?

I see plenty of positives in Rochester, but residential real estate isn't one of them - and I guess neither is gardening.

[BillWallace]

kaz,

If you are looking for older homes with character I would definitely look at older Rochester areas on the city side of Hwy 14 near St. Marys Hospital. There seem to be quite a few homes in there that are in good condition and have lots of character. Addresses like -

529 5th Street SW
603 5th Avenue SW
1330 2nd Street NW
224 7th Avenue NW
632 8th Street SW

Most of those are less than $200k too.

[kazinfl]

Originally Posted by BillWallace

kaz,

If you are looking for older homes with character I would definitely look at older Rochester areas on the city side of Hwy 14 near St. Marys Hospital. There seem to be quite a few homes in there that are in good condition and have lots of character. Addresses like -

529 5th Street SW
603 5th Avenue SW
1330 2nd Street NW
224 7th Avenue NW
632 8th Street SW

Most of those are less than $200k too.

The home on 8th St SW has potential. Most of these homes didn't show up in my search because they have one-car garages. Not sure if that is a smart investment in a city full of 3-car garages attached to vanilla boxes. Still amazed these older homes are on such small lots, since they are all between 75 and 130 years old and Rochester was still a pretty small city at the time (if I have my historical facts correct). It does gives me something new to consider. Thanks.