More luxury homes are going on the market in Metro Detroit as sales accelerate.

[bailey]

Of the few glimmers of hope I had for this region was that this type of stupid development was dead, buried, and never to return. Guess I was wrong.


http://www.detroitnews.com/article/2...text|FRONTPAGE

[Honky Tonk]

Of the few glimmers of hope I had for this region was that this type of stupid development was dead, buried, and never to return. Guess I was wrong.

Hey, If it worked once........

[michimoby]

http://www.youtube.com/watch?v=eKgPY1adc0A

[Honky Tonk]

http://www.youtube.com/watch?v=eKgPY1adc0A

Ah yes, the Classics!

[Detroitnerd]

Just a lot of happy talk designed to force up prices and garner Realtors some commissions.

[gameguy56]

Just a lot of happy talk designed to force up prices and garner Realtors some commissions.

Yeah, it reads like a puff piece.

[Bham1982]

Yeah, it reads like a puff piece.

I think it is something of a puff piece, but the general theme [[the McMansions are returning) is correct, I think.

Anecdotally, I see lots of people buying into these new developments again, and the bulldozers are definitely rumbling. Go out to the exurban fringe, and construction is moving ahead again. I don't get it, but it seems to be deja vu.

[Cincinnati_Kid]

Just a lot of happy talk designed to force up prices and garner Realtors some commissions.

This is true. They are hyping up the market to get people to take the plunge. I don't think people are busting down agents doors to buy a house. It's hyperbole. Banks still have a death grip on credit for approving loans. If your score isn't superalative [[750 score or higher), you ain't getting approved anyway.

[Detroitdave]

are you kidding me ? some people never learn.
wayyyyyy too much house, 5 bedrooms 5 baths. unless they have 4 kids whats the point , then you are still going to be stuck with it in 20 years once the kids are gone .
Didn't we already go through this ?

[Hermod]

are you kidding me ? some people never learn.
wayyyyyy too much house, 5 bedrooms 5 baths. unless they have 4 kids whats the point , then you are still going to be stuck with it in 20 years once the kids are gone .
Didn't we already go through this ?

Some times an empty nester needs a place to keep his beloved books.

Attachment 16577

[Bham1982]

I will never get this sort of lifestyle either, and am mystified that it has returned so quickly.

Who on earth would spend over $2 million for a crappily constructed home in a township with poor services and declining schools? Why does anyone need 7500 ft.? What does that cost to heat in the winter?

I don't see how "normal people" [[meaning almost everyone, so household incomes below 200k and net worth below a million) want a home with more than 4,000 ft. What do you do with all that space?

If you're some millionaire baller, then good for you, but I don't understand your run-of-the mill professional, even with good incomes, buying some 5,000 square foot home in some godforsaken township, across from cows and trailer parks, and with all that space for nothing.

[Shollin]

I will never get this sort of lifestyle either, and am mystified that it has returned so quickly.

Who on earth would spend over $2 million for a crappily constructed home in a township with poor services and declining schools? Why does anyone need 7500 ft.? What does that cost to heat in the winter?

I don't see how "normal people" [[meaning almost everyone, so household incomes below 200k and net worth below a million) want a home with more than 4,000 ft. What do you do with all that space?

If you're some millionaire baller, then good for you, but I don't understand your run-of-the mill professional, even with good incomes, buying some 5,000 square foot home in some godforsaken township, across from cows and trailer parks, and with all that space for nothing.

I bet these people ask themselves why they should pay top dollar for a loft or apartment in Detroit, which has one of the highest violent crime rates of any large city in a developed nation, almost non existent city services, the worst schools in the nation, lack of retail, and a lack of clean and safe park space.

[Bham1982]

I bet these people ask themselves why they should pay top dollar for a loft or apartment in Detroit, which has one of the highest violent crime rates of any large city in a developed nation, almost non existent city services, the worst schools in the nation, lack of retail, and a lack of clean and safe park space.

And I would agree with them 100%. Possibly the only thing crazier than a million dollar McMansion in the cornfields would be a million dollar home in a Detroit slum [[at least from an investment perspective).

But 90% of the U.S. isn't cornfield townships or urban wastelands. It's not like our only choices are Brush Park or Brighton Township.

[mwilbert]

And I would agree with them 100%. Possibly the only thing crazier than a million dollar McMansion in the cornfields would be a million dollar home in a Detroit slum [[at least from an investment perspective).

But 90% of the U.S. isn't cornfield townships or urban wastelands. It's not like our only choices are Brush Park or Brighton Township.

Exactly.You can't justify irrational behavior by pointing out that other people have their own irrational behavior.

[Det_ard]

I will never get this sort of lifestyle either, and am mystified that it has returned so quickly.

Who on earth would spend over $2 million for a crappily constructed home in a township with poor services and declining schools? Why does anyone need 7500 ft.? What does that cost to heat in the winter?

I don't see how "normal people" [[meaning almost everyone, so household incomes below 200k and net worth below a million) want a home with more than 4,000 ft. What do you do with all that space?

If you're some millionaire baller, then good for you, but I don't understand your run-of-the mill professional, even with good incomes, buying some 5,000 square foot home in some godforsaken township, across from cows and trailer parks, and with all that space for nothing.

Hell of an opening strawman, Bham. The article referenced in the original post discusses a home in West Bloomfield at Walnut Lake and Halstead. Schools and services are considered good relative to most other suburbs and the city.

You assume the home has "crappy construction". Why? While it is possible to build a modern home poorly, or use the cheapest materials, the pricey new homes I've been in have been well-constructed with quality materials. The old=good, new=crap viewpoint is uninformed. For every knockout Palmer Woods mansion there are 100 Brightmoor shacks. The "solid" 1920's brick EEV house may have solid oak doors and leaded glass built-in bookcases but may also have undersized floor joists, sagging 2x4 roof rafters, asbestos in the vermiculite insulation [[if it had any insulation at all), absent or poorly designed duct runs, asbestos wrapped hot water pipes, leaky windows, overall poor energy efficiency for the size, dangerous knob-and-tube wiring, lead water supply piping, tiny closets, a "penalty-box" kitchen designed to keep the little woman hidden, too few bathrooms for today's family needs, or other common old house maladies. I generally prefer old house styles to newer styles but you have to accept the negatives too.

In that area of West Bloomfield there are a lot of Chaldean families where the adult children often live with the parents. It's common to have three generations in the house. So if they can afford it, what business is it of ours how they choose to live?

You ask why does any one need 7500 sqft. You might as well ask why does anyone need 7500 songs on their iPod? Or 15 watches, or 50 pairs of shoes, or 8 bikes or a top of the line Mac when a simple PC will do what most users need. It seems a little intrusive and intolerant to be so concerned with how others choose to live their private lives and allocate their funds.

I have a suggestion for all those who are so mystified as to why some people choose to live as they do. Take the opportunity to actually find out. Talk to them with an open mind. Leave your biases and preconceived notions at home. Discover what their priorities and values are, what makes them tick and why they've made the choices they've made. It might be an eye-opening experience for you. They're not some strange offshoot of the human race. Your inability to understand them [[not simply create a self-serving caricature) is more a reflection of your efforts thus far than of their "otherness".

Then again, it can be entertaining to poke fun at the "others", so keep chucking stereotypes out there until you feel sufficiently superior.

[Bham1982]

Hell of an opening strawman, Bham. The article referenced in the original post discusses a home in West Bloomfield at Walnut Lake and Halstead. Schools and services are considered good relative to most other suburbs and the city.

It's hardly a strawman. This is the most isolated, least developed far corner of W. Bloomfield. It's heavily dirt roads and well water. And W. Bloomfield schools are generally worse than all the surrounding school districts.

You assume the home has "crappy construction". Why? While it is possible to build a modern home poorly, or use the cheapest materials, the pricey new homes I've been in have been well-constructed with quality materials. The old=good, new=crap viewpoint is uninformed. For every knockout Palmer Woods mansion there are 100 Brightmoor shacks.

I'm comparing apples-to-apples. A Brightmoor shack isn't a good comparison to a $2 million home. If you want to compare, say, $500k executive homes, there's no comparison between some new subdivision in Milford and an older home in Grosse Pointe Farms.

In that area of West Bloomfield there are a lot of Chaldean families where the adult children often live with the parents. It's common to have three generations in the house. So if they can afford it, what business is it of ours how they choose to live?

The point is "they" obviously can't afford it. Ever heard of the real estate crash? Too many people bought too much home, and everyone else pays for it.

You ask why does any one need 7500 sqft. You might as well ask why does anyone need 7500 songs on their iPod? Or 15 watches, or 50 pairs of shoes, or 8 bikes or a top of the line Mac when a simple PC will do what most users need. It seems a little intrusive and intolerant to be so concerned with how others choose to live their private lives and allocate their funds.

Totally false analogy. Americans didn't see their lifetime accumulated savings destroyed because someone downloaded too many songs. The global economy wasn't brought to its knees because some folks bought too many shoes. Household
net worth was shattered because too many idiots bought too much home, and we're paying for it.

The typical foreclosure costs the banks about $50,000, which is passed on to the consumer.

The Fannie Mae bailout was $116 billion. The Freddie Mac bailout was $76 billion. The TARP bailout was $700 billion. Then there was HAMP, then HARP, now HARP II. It never ends. Oh, and everyone's home is worth 40% less.

So, yeah, I think people have the right to question the exact same behavior that nearly brought down our economy a few years back.

[iheartthed]

Totally false analogy. Americans didn't see their lifetime accumulated savings destroyed because someone downloaded too many songs. The global economy wasn't brought to its knees because some folks bought too many shoes. Household
net worth was shattered because too many idiots bought too much home, and we're paying for it.

The typical foreclosure costs the banks about $50,000, which is passed on to the consumer.

The Fannie Mae bailout was $116 billion. The Freddie Mac bailout was $76 billion. The TARP bailout was $700 billion. Then there was HAMP, then HARP, now HARP II. It never ends. Oh, and everyone's home is worth 40% less.

So, yeah, I think people have the right to question the exact same behavior that nearly brought down our economy a few years back.

You didn't even mention the best part. Wait until these townships that fronted all of the money for that infrastructure to build these McMansions start to go belly-up because the property tax receipts never materialized to pay for that crap. What type of chain reaction will a city of Detroit bankruptcy set off in the ex-urbs when the ratings agencies start downgrading that debt out there?

[Det_ard]

It's hardly a strawman. This is the most isolated, least developed far corner of W. Bloomfield. It's heavily dirt roads and well water. And W. Bloomfield schools are generally worse than all the surrounding school districts.

Except it's not WB schools, its Walled Lake schools, which are generally well regarded. Its not isolated, its very close to shopping and M-5. It has municipal sewers and city water not well water, and while there are some dirt roads [[like Royal Oak), the majority are paved. Its listed at $1.29 million, not $2 million. There are no cows or trailer parks anywhere nearby. So what the hell are you talking about? A strawman.

The point is "they" obviously can't afford it. Ever heard of the real estate crash? Too many people bought too much home, and everyone else pays for it.

Who is "they"? If you're talking about 2006, you're right in many cases, although the vast majority of houses that were foreclosed on were not expensive houses. Today however the qualifications required for a jumbo mortgage are pretty stringent. 720 credit, 20% down minimum with some lenders requiring up to 40% down, debt-to-income no greater than 36% - 38%, liquid reserves equal to 10% of the total loan amount. There are no more stated income loans, no more liar loans, no negative am loans, it's 2012, not 2006. The idea you put forth that the people buying $1MM+ homes today can't afford them is simply wrong. In fact 1/3 of all $1MM+ home buyers this year in metro Detroit paid all cash. The rest had to exceed fairly tough underwriting standards.

Totally false analogy. Americans didn't see their lifetime accumulated savings destroyed because someone downloaded too many songs. The global economy wasn't brought to its knees because some folks bought too many shoes. Household
net worth was shattered because too many idiots bought too much home, and we're paying for it.

The typical foreclosure costs the banks about $50,000, which is passed on to the consumer.

The Fannie Mae bailout was $116 billion. The Freddie Mac bailout was $76 billion. The TARP bailout was $700 billion. Then there was HAMP, then HARP, now HARP II. It never ends. Oh, and everyone's home is worth 40% less.

So, yeah, I think people have the right to question the exact same behavior that nearly brought down our economy a few years back.

I'm with you on the outrage about the cost to taxpayers of the bailouts and the government's role in backstopping mortgage loans. You seem to have an issue with someone you know that you think is in over their head and bought in an area you don't like. Don't let that cloud your assessment of the overall market today.

[Bham1982]

Except it's not WB schools, its Walled Lake schools, which are generally well regarded.

WB and Walled Lake Schools both have test scores below their neighbors [[Bloomfield, Birmingham, Novi, Northville), so I would disagree. These buyers can live anywhere, and I assume you aren't comparing to Pontiac.

Its not isolated, its very close to shopping and M-5. It has municipal sewers and city water not well water, and while there are some dirt roads [[like Royal Oak), the majority are paved. Its listed at $1.29 million, not $2 million. There are no cows or trailer parks anywhere nearby. So what the hell are you talking about? A strawman.

There's a trailer park to the east [[Orchard Lake) and at least one to the west [[Pontiac Lake). There's very little retail except along Orchard Lake, and you have to fight traffic along two-lane, winding, Pontiac Lake to get there. The whole area is a traffic nightmare, because of the lakes.

And no, Royal Oak doesn't have dirt roads like Commerce-WB has dirt roads. That's just absurd. We should be preserving open space and promoting infill, rather than subsidizing construction on virgin land, especially in a shrinking region.

Who is "they"? If you're talking about 2006, you're right in many cases, although the vast majority of houses that were foreclosed on were not expensive houses. Today however the qualifications required for a jumbo mortgage are pretty stringent. 720 credit, 20% down minimum with some lenders requiring up to 40% down,

I don't think these are stringent terms. You're talking jumbo mortgages here. 20% is nothing, 720 is unimpressive and you can qualify for far less. IMO, almost anyone buying a million dollar home with 200k in liquid assets is a fool.

I can qualify for a million dollar home with my salary and assets; that doesn't mean I should buy one. The standards are incredibly lenient, even if they're a bit tougher than a few years back [[like they actually check to see if you're working).

And cash buying is so common because of fear of low home appraisals. The sellers don't want the deal to blow up when the appraisal comes in too low. This does not, however, lessen the risk of paying too much, nor does it remove the potential external costs borne by the taxpayer.

But the larger point is that the benefits to buying are isolated to the buyer, while the risks to buying are borne by society. This is why the public has a right to question this type of development.

[Honky Tonk]

"across from cows"

What do you have against cows?

[DetroitPlanner]

These are almost as big and as ugly as the ones they are building in Detroit on the East Riverfront.

[Lowell]

The housing market is recovering. Detroit-based Pulte Homes stock [PHM] has tripled in the past year to be one of the biggest gainers of the past 12 months. Pulte is the largest home builder in the US although, as that market is highly localized, it only has about 2% of the national share.

Let's not forget that while the economy and employment are slowly and fitfully improving, stock portfolios are zooming by comparison. So those with securities holdings are seeing their fortunes increasing and their consuming habits are responding.

As for buying luxury homes, the same could be asked about buying luxury cars. Who cares? I'm sure the economy and those whose jobs result from them don't mind. And we all know big dogs eat first, so seeing them chowing down bodes well for everybody else. That's the cold hard facts of American capitalism.

[bailey]

As for buying luxury homes, the same could be asked about buying luxury cars. Who cares? I'm sure the economy and those whose jobs result from them don't mind. And we all know big dogs eat first, so seeing them chowing down bodes well for everybody else.

It's not the "buying of luxury homes" that is the problem. It's the "buying of crappily built, mcmansions in ex-ex-urban cornfields in unsustainable developments all subsidized by state, county, and townships pro sprawl agenda".

Did we learn nothing from the last 5 years? These developments and the houses in them should be totally worthless....not merely selling at a discount.

[Bham1982]

Yeah, I'm not anti-luxury home construction.

I just don't personally understand the "mansion in farmland" phenomenon. It's not like these areas have good services, good schools, or really anything appealing outside of low taxes. They have horrible traffic, no stores or restaurants, and are a million miles from anything.

I have friends that bought in the Milford area, and to me, it's just awful. The schools aren't really good [[Wixom schools), there are no services [[good luck when it snows), traffic on I-96 is horrendous, and all the homes look like cardboard boxes. Their home is huge, but they can't afford to furnish all the rooms. It's supposedly "luxury living" but there are trailer parks and junkyards everywhere. Oh, well.

[bailey]

Yeah, I'm not anti-luxury home construction.

I just don't personally understand the "mansion in farmland" phenomenon. It's not like these areas have good services, good schools, or really anything appealing outside of low taxes. They have horrible traffic, no stores or restaurants, and are a million miles from anything.

I have friends that bought in the Milford area, and to me, it's just awful. The schools aren't really good [[Wixom schools), there are no services [[good luck when it snows), traffic on I-96 is horrendous, and all the homes look like cardboard boxes. Their home is huge, but they can't afford to furnish all the rooms. It's supposedly "luxury living" but there are trailer parks and junkyards everywhere. Oh, well.

And that is precisely why whenever gas goes up a nickle and our local media hacks go running to a gas station on m59 to interview some exurban housefrau or joe lunch box about how outraged they are about how expensive it is to fill up the Yukon XL, I just laugh. Choices have consequences. How's that 4500 square feet in the middle of nowhere working out for you?