Certain neighborhoods in Detroit are almost impossible to buy in!

**Artistic** · December-03-12, 08:40 PM

Sherwood Forest....As we are writing an offer the listing agent calls to say its sold.
Boston Blvd.....Put in an offer 25k over list price...sold to a higher bidder.
Palmer Woods.....walking through a home for sale - and really liking it, listing agent walks in with the people who put in an offer 20 minutes earler and it was accepted.
Called my broker on 2 homes that hit the market on the same day to schedule a showing.....to late under contract within 2 hours of posting.

This has all happened within the last couple months, I'm glad that Detroit is selling....anyone else have this experience?

**southen** · December-03-12, 08:44 PM

there was a post on the lafayette park neighborhood forum that I belong to regarding this. people can't recall a time when there were so few town homes on the market, it's great to see.

**Cincinnati_Kid** · December-03-12, 10:22 PM

It's hard for me to imagine that houses are selling like that, especially with the economy still in flux regardless to location. So all of a sudden, people are opening up their coffers to buy a home?

**313WX** · December-03-12, 10:33 PM

Actually, it doesn't surprise me. Tons of people are purchasing these dirt cheap homes around Detroit in the hopes that they'll profit big time if the city rebounds and the housing industry recovers.

That said, just because people are buying these properties doesn't actually mean they're moving into them,

**detroitsgwenivere** · December-03-12, 10:54 PM

^^ I agree. I've seen houses listed for 25k 6-8 months ago that are now listed for 80k+. Looks to me like carpetbagging is in full swing. Anyone seen the tourbuses full of asians lately?

Oh yeah, I forgot to mention the online bidding for tax foreclosures. I haven't heard of anyone lately who has been able to pick up a house in a half decent area, they are being outbid by investment companies. Hell, one of my best friends just lost her Hamtown house to some company from Florida.

**Dexlin** · December-03-12, 11:42 PM

Just look at at housing data over the last year. This isn't a matter of belief or something to have a debate on; it's a fact. The housing market is up, and moreso in Detroit than most places if only for the simple fact of how deep the market cratered in the region. The market hit the bottom, last year. Doesn't mean that the local housing market is going to be normal [[i.e. 2000 levels) soon, but it's going to recover every year from here on out.

**Johnnny5** · December-04-12, 12:09 AM

Originally Posted by Artistic

Sherwood Forest....As we are writing an offer the listing agent calls to say its sold.
Boston Blvd.....Put in an offer 25k over list price...sold to a higher bidder.
Palmer Woods.....walking through a home for sale - and really liking it, listing agent walks in with the people who put in an offer 20 minutes earler and it was accepted.
Called my broker on 2 homes that hit the market on the same day to schedule a showing.....to late under contract within 2 hours of posting.

This has all happened within the last couple months, I'm glad that Detroit is selling....anyone else have this experience?

Is it just me or does this sound eerily similar to what was happening in some areas at the peak of the housing bubble?

**mwilbert** · December-04-12, 12:27 AM

The similarities are superficial. The bubble sales were driven by low underwriting standards and people ignoring underlying value because they expected to be able to sell at a profit regardless. I doubt either of those things is happening now in Detroit.

However, some of this is certainly being driven by the very low mortgage rates available, and although I expect those to last for quite a while, if rates went up quickly I'm sure there would be a visible effect on sales and prices.

Also, inventory is usually quite thin this time of year; no one sensible puts their house on the market between mid-November and New Year's unless they have to.

**davewindsor** · December-04-12, 02:54 AM

Originally Posted by Artistic

Sherwood Forest....As we are writing an offer the listing agent calls to say its sold.
Boston Blvd.....Put in an offer 25k over list price...sold to a higher bidder.
Palmer Woods.....walking through a home for sale - and really liking it, listing agent walks in with the people who put in an offer 20 minutes earler and it was accepted.
Called my broker on 2 homes that hit the market on the same day to schedule a showing.....to late under contract within 2 hours of posting.

This has all happened within the last couple months, I'm glad that Detroit is selling....anyone else have this experience?

Just curious. At what price range is it impossible to buy in these neighborhoods?

**corktownyuppie** · December-04-12, 05:23 AM

Originally Posted by Artistic

Sherwood Forest....As we are writing an offer the listing agent calls to say its sold.
Boston Blvd.....Put in an offer 25k over list price...sold to a higher bidder.
Palmer Woods.....walking through a home for sale - and really liking it, listing agent walks in with the people who put in an offer 20 minutes earler and it was accepted.
Called my broker on 2 homes that hit the market on the same day to schedule a showing.....to late under contract within 2 hours of posting.

This has all happened within the last couple months, I'm glad that Detroit is selling....anyone else have this experience?

You've just summed up the last 6 weeks of my life. I can't speak for Sherwood Forest and Boston Blvd, but at least in Corktown, the people aren't just buying. The moving trucks are coming with them.

**corktownyuppie** · December-04-12, 05:29 AM

Originally Posted by davewindsor

Just curious. At what price range is it impossible to buy in these neighborhoods?

One easy comp is to look at rental rates vs. monthly payments. Right now, prices are at a point where the cost to rent is actually $300-$500/mo. higher than if you were just to buy it yourself. If monthly rent is a stable number, and it's less than cost to own, then intuitively speaking, properties have room to grow.

There's a duplex behind the Mercury Bar in Corktown. 4 total bedrooms could probably rent for $2,000/mo. in revenue. But the monthly expenses come out to $1300-1400/mo.

I'm not one to speculate on the direction of house prices because those are based on so many unpredictable factors on any given day. But I do know that if I can rent out a house for $2,000/mo. and buy it for $1400/mo....I'd do it as many times as I can.

**corktownyuppie** · December-04-12, 05:31 AM

Originally Posted by Cincinnati_Kid

It's hard for me to imagine that houses are selling like that, especially with the economy still in flux regardless to location. So all of a sudden, people are opening up their coffers to buy a home?

The problem is that there are two economies. For 30-40% of the country, generally those at the highest education levels, there hasn't been any economic stress for over 3 years.

The good news is that Detroit is finally benefiting from that interest, whereas in the past, those people didn't want to come anywhere near here.

**poobert** · December-04-12, 08:00 AM

Good news. Don't get discouraged though. I'm not surprised you're having a hard time in those areas. As I mentioned in another thread, the housing market seemed to be palpably picking up.

I bought at the low ebb of the crisis...so it is also nice to be living in something that's worth more than I paid! In Detroit, no less!

**Bham1982** · December-04-12, 08:26 AM

I too notice few homes on the market, but I think it's for totally different reasons.

The vast majority of homeowners are underwater, and prices are still too low for sales to make any economic sense. Americans are eternal optimists, and always think higher prices are just around the corner, so they'll wait until the market improves, I guess.

I assume the initial comments are from someone with a vested interest in the real estate market. The neighborhoods mentioned have tons of listings, with the average asking price about the same as a new car. I'm pretty sure one can find a home.

**Artistic** · December-04-12, 08:32 AM

The price point in each neighborhood is slightly different, due to location, size and strength of neighborhood. The Sherwood Forest home was in the 120k range, Boston Blvd 100k, Palmer Woods [[this particuliar house) was in the 150k range. This is just my story of how things have worked [[or not worked) out. I'm just curious if there are others with similiar stories.

**Bham1982** · December-04-12, 08:37 AM

Originally Posted by Artistic

The price point in each neighborhood is slightly different, due to location, size and strength of neighborhood. The Sherwood Forest home was in the 120k range, Boston Blvd 100k, Palmer Woods [[this particuliar house) was in the 150k range. This is just my story of how things have worked [[or not worked) out. I'm just curious if there are others with similiar stories.

I see listings in those neighborhoods for less. You do realize that 100k for a huge mansion isn't exactly strong evidence of a robust market?

When Detroit has 800k bungalows like in the Bay Area and NYC area, then I'll worry. Heck, there are 600k [[very upgraded) bungalows in Birmingham. I think Detroit's nicer neighborhoods are still very, very accessible for regular folks.

**corktownyuppie** · December-04-12, 08:42 AM

Originally Posted by Bham1982

I assume the initial comments are from someone with a vested interest in the real estate market. The neighborhoods mentioned have tons of listings, with the average asking price about the same as a new car. I'm pretty sure one can find a home.

I accept your argument about houses being underwater, artificially decreasing supply. Comps are very odd. In Boston Edison you'll see a home that got sold for $100k next to one listed for $20,000. Forget about Sherwood Forest. Tough to find deals there. And Palmer Woods homes are going for about the price of a new car if by "new car" you really mean a brand new Bentley.

Detroit real estate is bizarre. Look at midtown. In one brand new building, rent goes for $1.00-$1.20 per square foot. In a decrepit building across the street, it goes for 40-50% less.

JVB · December-04-12, 09:18 AM

"Certain neighborhoods in Detroit are almost impossible to buy in!"

Hyperbole much?

**Artistic** · December-04-12, 09:25 AM

@JVB - one question - are you actually and physically looking right now at real estate for sale [[not tied up in bank papers) in Palmer Woods, Sherwood Forest or Boston Blvd between Woodward and the Lodge?
6 actual listings in Palmer Woods 225k - 699k
7 actual listing in Sherwood Forest 30k - 137k
2 actual listings on Boston Blvd

JVB · December-04-12, 09:38 AM

Originally Posted by Artistic

@JVB - one question - are you actually and physically looking right now at real estate for sale [[not tied up in bank papers) in Palmer Woods, Sherwood Forest or Boston Blvd between Woodward and the Lodge?
6 actual listings in Palmer Woods 225k - 699k
7 actual listing in Sherwood Forest 30k - 137k
2 actual listings on Boston Blvd

There are active listings in all of those neighborhoods so it's not "almost impossible" to buy there.

**Bham1982** · December-04-12, 09:51 AM

Originally Posted by Artistic

@JVB - one question - are you actually and physically looking right now at real estate for sale [[not tied up in bank papers) in Palmer Woods, Sherwood Forest or Boston Blvd between Woodward and the Lodge?
6 actual listings in Palmer Woods 225k - 699k
7 actual listing in Sherwood Forest 30k - 137k
2 actual listings on Boston Blvd

Artistic, these homes are extremely cheap.

The most expensive asking price in Sherwood Forest, a beautiful neighborhood of brick homes built for the upper class, is about one third the price of a piece of dirt [[a narrow vacant residential lot) in a nicer Birmingham neighborhood.

Crappy built new homes in exurbs can cost 300k-400k, or more. Family sized homes in established, upscale suburbs cost 500k+ [[really 700k+ if we're talking big brick homes in top neighborhoods).

A gorgeous brick home in a top-tier Detroit neighborhood, with stained glass windows and all the classic details, can cost 10% of a Wixom home. Does that sound like we're headed for a Detroit affordability crisis?

**Artistic** · December-04-12, 10:07 AM

@JVB and Bham1982.....I was just trying to create a discussion on some areas that I'm looking into...FOR ME....Birmingham, Rochester, Wixom, Plymouth etc etc etc....doesnt work, all nice, but not for me.
The style, size and price point in Detroit neighborhoods I like are the ones that seem to go very quickly. Having 6 or 7 homes for sale in an area of hundreds of homes is not alot. And on that note...I'm back to my search.

**Bham1982** · December-04-12, 10:11 AM

Artistic, inventory is way down everywhere. My brother is home-searching and there are like three homes in his [[very wide) price range in an Oakland County suburb. This is especially true in December, when no one lists unless they have to.

Also, keep in mind that the neighborhoods you list were built for the upper class. They were built for titans of industry, and nowadays, the price points are accessible for almost anyone with a job and decent credit score. So I don't think an affordability crisis is imminent.

**michimoby** · December-04-12, 10:20 AM

Originally Posted by Bham1982

A gorgeous brick home in a top-tier Detroit neighborhood, with stained glass windows and all the classic details, can cost 10% of a Wixom home. Does that sound like we're headed for a Detroit affordability crisis?

Likely not, but on the contrary, what could be implied is that real estate values are once again becoming grossly overinflated in places like Wixom, and Detroit may ironically the most cushioned from the inevitable double-dip that will occur sometime next year.

**Bham1982** · December-04-12, 10:25 AM

Originally Posted by michimoby

Likely not, but on the contrary, what could be implied is that real estate values are once again becoming grossly overinflated in places like Wixom, and Detroit may ironically the most cushioned from the inevitable double-dip that will occur sometime next year.

Prices haven't risen much in the suburbs. It's true they may drop again, but it's a regional, interconnected market, so any drop in Wixom will be felt in Detroit.

My point is that crap in the suburbs often costs more than beautiful upper-class homes in the city. To me, this casts doubt on the claim that it's "almost impossible" to buy in the nice parts of Detroit.