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

[iheartthed]

Don't mean to sound naive, but why wouldn't it qualify? Because of the area it's located in?

To over simplify it... The only way you can borrow money to repair a house is to borrow money against the house. If the house is only worth $50,000 then that's the very max you can borrow, assuming you own the home outright. If you have a mortgage for more than your house is deemed to be worth by the bank then you will not be allowed to borrow anything, no matter how good your credit. Upgrades to old houses like those in B-E can easily approach $50,000...

[Detroitnerd]

Nov 2, 2012: September 2012 housing data. In September, housing starts in the US achieved a four year high. Starts are currently 40% of what they were at the 2005-2006 peak and are at about 60% of the 50-year average, so there is plenty of room to grow.

Inventories of existing houses remain lean and sales are up. The elephant in the room is when the banks dump their foreclosure backlog into the housing inventory.

Thanks for posting this Hermod. This is an excellent example of the sort of happy talk I mean.

In September, [after five years of almost no new building due to a mortgage meltdown that left the residential real estate business swimming in inventory with no buyers and absolutely no reason to sink money into building any new single-family homes,] housing starts [which include single-family homes, condos, apartment buildings, basically any sort of housing unit] in the US achieved a four-year high [see above]. Starts are currently 40 percent of what they were at the 2005-2006 peak [although data will definitely show a shift from single-family homes to apartments and condos, which produce bigger numbers but less economic activity] and are at about 60 percent of the 50-year average, [a range that includes a time when housing starts weren't vital economic statistics because the country actually made things for export, instead of pinning its economy on consumption and such data as 'housing starts,' giving us the impression] ... there is plenty of room to grow.

Inventories of existing houses remain lean [thanks to banks keeping distressed homes piled up in shadow inventories] and sales are up [because they couldn't go down].

[Det_ard]

While it's true that there is always happy talk coming out of the Realtor groups [["Now is a GREAT time to buy!"), it's also true that home prices in metro Detroit have firmed up this year. It's also true there's less supply of both foreclosures and privately-owned houses for sale. Nice houses in desirable areas are selling quickly and often with multiple offers submitted. Investors are seeing much more competition for the ugly houses. Building is up, both infill and fringe.

If you don't think things have changed, look at Royal Oak within a mile of 11/Main. There are dozens of new homes going up, and selling for $150/sqft - $175/sqft. That's $300K - $500K+ for a house in RO. It wasn't like this a year or two ago.

[Detroitnerd]

While it's true that there is always happy talk coming out of the Realtor groups [["Now is a GREAT time to buy!"), it's also true that home prices in metro Detroit have firmed up this year.

Or is it just the appearance that home prices have firmed up so the banks and real estate agencies and lenders can start building up another bubble?

Oh, sure. Prices are up a bit. But what's behind all this? The prices you're quoting have all been propped up -- by historically, record-setting low interest rates, manipulation of distressed inventory [[the banks are sitting on a massive stockpile of at least 5 million distressed homes that will eventually have to go to auction), and the very industry-generated propaganda I'm criticizing.

Some of the activity you're seeing is for the very rich, the top 10 percent can afford to level a Royal Oak house and rebuild it so they can have more space and still walk to the theater. For the enormously wealthy, they can still bid for those spectacular homes and properties -- sites perched over Lake Michigan, or 20,000-square-foot palaces in the sticks -- because most of them are richer than ever.

But for the average shmoe who's being suckered into buying a huge exurban house when the fundamentals of this economy are going to keep squeezing him for the next 30 years, when gas could be $20 a gallon and everything is miles away, when -- 30 years hence -- people will look at these McMansions the same way we look at, say, a gas-guzzling, all-steel car from the 1950s with tailfins: impressive to look at but obsolete as a daily driver.

[p69rrh51]

I don't think the B-E homes qualify as "McMansions"

You missed McMansion of its day! Time has a way of civilzing everything. Back when the homes in B-E were being built it was the noveau riche area of the city pretty much like what is being discussed in this thread.

[bailey]

You missed McMansion of its day! Time has a way of civilzing everything. Back when the homes in B-E were being built it was the noveau riche area of the city pretty much like what is being discussed in this thread.

Well, of course, at that time, the population growth supported the expansion. There has never been a case for M-59 and the ex urban developments.

[p69rrh51]

Well, of course, at that time, the population growth supported the expansion. There has never been a case for M-59 and the ex urban developments.

Possibly in 1906 B-E was a gamble there was plenty of good housing being built in the city inside Grand Boulevard! The lots in B-E are far larger than similar lots of the day especially West Boston Boulevard from Woodward to Hamilton. They have all the qualifications of the Suburban areas being discussed. Also the location of B-E would be equivalent to M-59, 23 0r 26 Mile Roads back then. 70 West Boston Boulevard is 4 acres and 150 West Boston Boulevard is 3.25 acres, how many lots urban or suburban are that large?

[iheartthed]

Possibly in 1906 B-E was a gamble there was plenty of good housing being built in the city inside Grand Boulevard! The lots in B-E are far larger than similar lots of the day especially West Boston Boulevard from Woodward to Hamilton. They have all the qualifications of the Suburban areas being discussed. Also the location of B-E would be equivalent to M-59, 23 0r 26 Mile Roads back then. 70 West Boston Boulevard is 4 acres and 150 West Boston Boulevard is 3.25 acres, how many lots urban or suburban are that large?

Detroit's population grew by over 60% between 1900 - 1910. Metro Detroit grew by less than 3% in the 1990s and shrank between 2000-2010. Sounds like the builders were operating on much more sound fundamentals in 1900 than they are in 2010.

[p69rrh51]

Detroit's population grew by over 60% between 1900 - 1910. Metro Detroit grew by less than 3% in the 1990s and shrank between 2000-2010. Sounds like the builders were operating on much more sound fundamentals in 1900 than they are in 2010.

You are correct, but the region[[not city) grew from approx, 600k to 760K an increase of 30%. There was still plenty of good land available inside Grand Boulevard at time. B-E was not necessary but I am glad they went ahead and developed the area anyway and they are the mcmansions of the their day just far better than what is being built today.


http://www.somacon.com/p469.php

[iheartthed]

You are correct, but the region[[not city) grew from approx, 600k to 760K an increase of 30%. There was still plenty of good land available inside Grand Boulevard at time. B-E was not necessary but I am glad they went ahead and developed the area anyway and they are the mcmansions of the their day just far better than what is being built today.


http://www.somacon.com/p469.php

Regional growth is irrelevant during that period of time. 100% of the net population growth from 1900-1910 was a result of Detroit growing by attracting immigrants from outside the region. The difference between then and now is these developments are just sucking population from one part of the metro area to another. Now there is no population growth to cover the costs of the new development. There is no population growth to cover the maintenance of the old infrastructure. So sooner or later the region is gonna have to figure out how to cover the costs of both.

[p69rrh51]

Regional growth is irrelevant during that period of time. 100% of the net population growth from 1900-1910 was a result of Detroit growing by attracting immigrants from outside the region. The difference between then and now is these developments are just sucking population from one part of the metro area to another. Now there is no population growth to cover the costs of the new development. There is no population growth to cover the maintenance of the old infrastructure. So sooner or later the region is gonna have to figure out how to cover the costs of both.

This does not matter! I like all the homes in B-E! But when its all said and done people do not change that much. The homes there and other areas of the city were looked upon just like we look down on the large homes today. B-E has all the earmarks of the large homes in the "exurbs" whether we like it or not. If anything you could point to B-E and I.V. as some of the starting points to movement toward the burbs!

[iheartthed]

This does not matter! I like all the homes in B-E! But when its all said and done people do not change that much. The homes there and other areas of the city were looked upon just like we look down on the large homes today. B-E has all the earmarks of the large homes in the "exurbs" whether we like it or not. If anything you could point to B-E and I.V. as some of the starting points to movement toward the burbs!

We're talking about two different things. I could give two shits about the size of house someone wants to build themselves. I'm talking about a declining population covering the costs of excess infrastructure when so much of what currently exists is so underutilized.

[p69rrh51]

We're talking about two different things. I could give two shits about the size of house someone wants to build themselves. I'm talking about a declining population covering the costs of excess infrastructure when so much of what currently exists is so underutilized.

Yes we are!! I do agree with you the city has a tremendous amount of land perfect for what is going on way out in the burbs. We need to figure a way to utilize it.