Certain neighborhoods in Detroit are almost impossible to buy in!

[Goose]

when these 3,000 to 4,000 sq. ft. homes in these neighborhoods go cheap, unfortunately neither the purchaser or the bank factor in the cost to maintain and heat these older homes, eventually straining the owner, with a decline in maintenance to follow and likely loss of value.........

just because you can afford a $100,000 old school tudor with 5 bedrooms and 3000 sq. ft., doesn't mean you can maintain it....

[corktownyuppie]

To me, this casts doubt on the claim that it's "almost impossible" to buy in the nice parts of Detroit.

Hyperbole aside, my interpretation of the OP was not that it was impossible because people are getting "priced out". It's impossible because of a combination of low supply and artificially low asking prices.

It's frustrating as place offers on 6 homes and lose all of them because someone bid $10-20k over asking price or because buyers are making offers within 30 minutes of an open house.

A more accurate description is not that buying homes is impossible...rather that "asking prices on Detroit prices are unreasonably low".

[Bham1982]

A more accurate description is not that buying homes is impossible...rather that "asking prices on Detroit prices are unreasonably low".

Sometimes sellers low-ball to spark a bidding war, so maybe this is what is happening. Or values in transitional areas are so difficult to establish, so prices are all wacky.

If this is the case, probably come to the showings with check in hand, ready to put down a cash offer.

I do know someone bought a home sight unseen on my street not too long. It was sold on the day it was listed. Sounds foolish to me, but it may be a teardown.

In my area, generally speaking, I would say that asking prices are generally too high and the opposite is occuring from what you're describing in Sherwood Forest. Sellers are asking high prices, homes are lingering [[sometimes for years) and owners are stubbornly not lowering.

I think if someone has cash though, they can buy much cheaper. The closings are all below asking.

[Eber Brock Ward]

I think no one is appreciating how different two houses can be in one neighborhood.

Take my neighborhood, Woodbridge, for example. A move-in ready house in very good shape and updated [[forced air heat, updated electrical, etc.) is going to cost you around or north of $100k nowadays, and the last one a month or two ago went over ask at $105k, after asking $97.5k.

You can get one that needs a LOT of work and updating for like $40-60k, but a lot of people would not move into one of those houses.

The market for the former type of house is extremely tight in a lot of the top-tier neighborhoods, and it is quite difficult to buy in. Even this spring my wife and I got outbid on two properties before we finally scored. OTOH, it is VERY easy to buy in to the latter type of house.

I would wager that the OP is looking at nicer houses while Bham is, intentionally or not, pushing to rescope the discussion to all houses in these neighborhoods instead of the good ones.

[corktownyuppie]

Sometimes sellers low-ball to spark a bidding war, so maybe this is what is happening. Or values in transitional areas are so difficult to establish, so prices are all wacky.

If this is the case, probably come to the showings with check in hand, ready to put down a cash offer.

I do know someone bought a home sight unseen on my street not too long. It was sold on the day it was listed. Sounds foolish to me, but it may be a teardown.

In my area, generally speaking, I would say that asking prices are generally too high and the opposite is occuring from what you're describing in Sherwood Forest. Sellers are asking high prices, homes are lingering [[sometimes for years) and owners are stubbornly not lowering.

I think if someone has cash though, they can buy much cheaper. The closings are all below asking.

It's a tale of two worlds...and it's complicated by bank-owned property. My 3 offers were for all cash. All got turned down. But I do hear you about stubbornly high prices. Willy's Overland Lofts have been priced at $1.50 a square foot, and Westin Book Cadillac has been even higher. Those units are moving now, albeit a little more slowly.

You're right re: transitional areas. It's wacky alright.

[JVB]

Either way, a recovery of the housing market is much needed and welcomed. But please, please, please don't loosen up credit too much again. It's nice to say "Everyone should own a home", but everyone can't afford to own a home and we don't need to go through that shit again.

[jt1]

Either way, a recovery of the housing market is much needed and welcomed. But please, please, please don't loosen up credit too much again. It's nice to say "Everyone should own a home", but everyone can't afford to own a home and we don't need to go through that shit again.

It's also nice to say that banks require an appraisal to ensure the investment is safe. Hopefully, the appraisal process will become something more than an extension of a banks lending arm

[DetroitPlanner]

If you want to buy the home offer cash, not $25k over. It won't be impossible to buy it then. If you offer too much then the bank won't give you a loan, you're out your deposit and the current owner may need to put the house back on the market.

[JVB]

It's also nice to say that banks require an appraisal to ensure the investment is safe. Hopefully, the appraisal process will become something more than an extension of a banks lending arm

A lot of people at fault - banks with lending standards too low thanks to government-backed [[ie guaranteed bail outs) insurance, manipulated appraisal processes, people deluding themselves into thinking house prices can only go up and $0 down mortgages to name a few.

[swiburn]

well,how about the car and home insurance? Even if you have a good house deal, wouldn't the insurance rates kind of put everything out of reach unless you make serious money? I don't know how much car insurance and home insurance is, however. I just remember growing up on Boston Blvd. and everything related to "the house" i.e., upkeep, money, etc.

[DZanke]

A lot of people at fault - banks with lending standards too low thanks to government-backed [[ie guaranteed bail outs) insurance, manipulated appraisal processes, people deluding themselves into thinking house prices can only go up and $0 down mortgages to name a few.

I don't think we have to worry about due diligence on the bank's part, the pedulum has swung the other way. I won a bid on a house in Grosse Pointe Park in 2009, and since it was a foreclosure, the buyer is responsible for city certs. I thought the city was picky, it was nothing compared to the bank! Anything the appraiser even mentioned, the bank freaked out! The mortgage co. wanted me to gets 3 bids for painting the interior, and set up an escrow account for the painting because the walls in the house had a "less than satisfactory aesthetic appearance" not due to cracks or holes, but because it hadn't been painted in years. That was just one of many, many hoops I had to jump through to purchase the house. I was about to have a nervous breakdown, my bid had been accepted, I had to have water and electric turned on, I had a $2000 deposit, and my financing didn't get approved until a week before closing. I had given notice to my apt. manager, rented a truck, had money and work invested in the property, and I didn't know for sure if I could get financing not because of my credit, but because the bank didn't want to write loans!

[Cincinnati_Kid]

when these 3,000 to 4,000 sq. ft. homes in these neighborhoods go cheap, unfortunately neither the purchaser or the bank factor in the cost to maintain and heat these older homes, eventually straining the owner, with a decline in maintenance to follow and likely loss of value.........

just because you can afford a $100,000 old school tudor with 5 bedrooms and 3000 sq. ft., doesn't mean you can maintain it....

Truer words have never been spoken. Affordability vs Maintenance. Just because you can pay the mortgage and taxes doesn't mean it's affordable. You better have a rainy day fund or consistent cash flow established to pay for a new roof, new windows or a new boiler or whatever else needs to be repaired or replaced on those old large homes. This is where most get into trouble.

[Cincinnati_Kid]

A lot of people at fault - banks with lending standards too low thanks to government-backed [[ie guaranteed bail outs) insurance, manipulated appraisal processes, people deluding themselves into thinking house prices can only go up and $0 down mortgages to name a few.

After the banks got bailed out, they still should have done their due dilligence in helping families secure loans, instead of making it more difficult to achieve them. They caused the problem to begin with.

[JVB]

After the banks got bailed out, they still should have done their due dilligence in helping families secure loans, instead of making it more difficult to achieve them. They caused the problem to begin with.

Your timeline is a wee bit off. The housing bubble began in the mid-90's when the Riegle-Neal Act was passed which forced banks to loan money to borrowers that shouldn't have qualified for loans. Then in the late-90's HUD ensured that Fannie Mae and Freddie Mac were backing subprime loans which essentially removed all incentive for banks to watch who they loaned money too since all losses would be covered by the govt, a situation referred to as "Moral Hazzard".



This began the inflation of the bubble which eventually began to burst in late 2005. The banks were not bailed out until 2008, which I was very much against but Bush and Obama both took so much money from Wall Street that the bailout was inevitable. Since then, getting a mortgage is much more difficult as it should be, and that's why prices are no longer rising out of control. However, since the banks didn't learn their lesson, and they know Obama [[or whoever the next president is) will always be there to bail them out, don't be surprised with more bubbles in the future.

[jolla]

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?

Yup, I'm feeling it!

A foreclosed house in Boston Edison [[east of the Lodge) with a list of $50k went for $82k cash. A house in Sherwood Forest got two offers before my [[slow-ass, ex-) agent could get me a showing. I looked at a house in Indian Village less than a week old and it already had two offers over the ask [[at least one of them was a cash offer).

[TexasT]

well,how about the car and home insurance? Even if you have a good house deal, wouldn't the insurance rates kind of put everything out of reach unless you make serious money? I don't know how much car insurance and home insurance is, however. I just remember growing up on Boston Blvd. and everything related to "the house" i.e., upkeep, money, etc.

We pay less than $300 for insurance for our house and about $40K worth of car. Combined with the ridiculously low mortgage, it's not bad at all.

And for the OP, it took 4 houses before we were able to buy. Outbid on three, finally got the 4th.