Here’s How Much Real Estate $1 Million Buys You in Major US Cities

**Lowell** · March-23-14, 10:49 AM

Tired of a cramped living in San Francisco where $1 mil only gets you 1500 sq. feet? Try Detroit where you get 83,000. [That's 4 time runner-up Cleveland by the way.]

Check out this interesting graphic and comparisons.

Does that mean Detroit is best or worst?

**DetroitPlanner** · March-23-14, 11:01 AM

This is a median price not an absolute one. The value of real estate is market driven. I doubt that you can buy an 83,000 sq ft mansion in the Berry Sub for a million [[don't exist anyway) for $1 million. Yes Detroit has a lot of empty real estate, much more than most places but geography is a funny thing.

If you read towards the bottom the article looks at NYC as a whole, then Manhattan.

**Bham1982** · March-23-14, 11:26 AM

I don't like these "City A is cheaper than City B" articles because they fail to take into account that homebuying, at its core, is nothing more than an investment.

Yes, SF and NYC are damn expensive, and yes, Detroit and Cleveland are cheap. BUT, where is the smarter place to park your money? If you invested 50k in Metro Detroit real estate 20 years ago your return would be minimal [[perhaps negative in city proper and some inner suburbs), if you invested 100k in Bay Area or NYC area real estate during the same time period your return would be stunning.

So which area is "cheaper"? If "cheap" is defined as saving you in the pocketbook over the course of your investment, it could well be SF or NYC. An investment with negative return isn't "cheap".

**Wesley Mouch** · March-23-14, 11:26 AM

Detroit housing is 'affordable'.

I find it funny that we complain about the low prices. The rest of the world [[except Vegas, Phoenix, and Tampa) complain about high prices.

In Detroit anyone with a job can afford a home. Go anywhere west of the Rockies and try that.

We got it good. [[And yes, my mortgage is worth more than my house -- but my mortgage is affordable.)

**DetroitPlanner** · March-23-14, 11:37 AM

Originally Posted by Wesley Mouch

Go anywhere west of the Rockies and try that.

Anywhere? http://www.realtor.com/realestateand...ex=MT559888595

This town draws a lot of similarities to Detroit, only on a much smaller scale.

**313WX** · March-23-14, 11:40 AM

Originally Posted by Wesley Mouch

Detroit housing is 'affordable'.

I find it funny that we complain about the low prices. The rest of the world [[except Vegas, Phoenix, and Tampa) complain about high prices.

In Detroit anyone with a job can afford a home. Go anywhere west of the Rockies and try that.

We got it good. [[And yes, my mortgage is worth more than my house -- but my mortgage is affordable.)

It's not the low prices that's the problem, but what you get for the low prices.

Many people prefer NOT to merely settle for what DEtroit has to offer simply because of the low prices at face value.

**Detroitus** · March-23-14, 11:57 AM

I live and own a landscaping business in San Francisco and let me tell you to many of us higher home values do not necessarily make for a better city. For one it makes for a mentality where everything is about how it effect your property values.

God forbid your neighbors use a laundry line [[like us and our 91 year old neighbor) because that's ghetto and might bring down your property value. And better chop down that big mature tree becasue it might block your "million dollar view" and that might bring down your property value. And make sure to remodel your little Victorian cottage doubling and tripling the size becasue you need at least one bathroom for every bedroom because that really good for your property value. And don't really bother with landscaping because it will take at least 5-10 years for the plants to mature, at which time your have flipped the house for another with a higher propety value.

Our rag of a newpaper, the S.F. Chronicle, has become obsessed with list like the one posted and exposies about 'dream homes' but to me if it's all about the property value and you're planning to flip it in a few years is your house really ever a home?

**DetroiterOnTheWestCoast** · March-23-14, 12:28 PM

Greetings from Diamond Heights, Detroitus.

**rb336** · March-23-14, 12:32 PM

Originally Posted by Bham1982

I don't like these "City A is cheaper than City B" articles because they fail to take into account that homebuying, at its core, is nothing more than an investment.

Yes, SF and NYC are damn expensive, and yes, Detroit and Cleveland are cheap. BUT, where is the smarter place to park your money? If you invested 50k in Metro Detroit real estate 20 years ago your return would be minimal [[perhaps negative in city proper and some inner suburbs), if you invested 100k in Bay Area or NYC area real estate during the same time period your return would be stunning.

So which area is "cheaper"? If "cheap" is defined as saving you in the pocketbook over the course of your investment, it could well be SF or NYC. An investment with negative return isn't "cheap".

There are an awful lot of analysts who don't think the mega-prices in NY,SF and DC are at all sustainable - they are mini-bubbles waiting to burst

**Bham1982** · March-23-14, 12:46 PM

Originally Posted by rb336

There are an awful lot of analysts who don't think the mega-prices in NY,SF and DC are at all sustainable - they are mini-bubbles waiting to burst

But there are even more investors who disagree, hence the high real estate prices. No one has lost money investing long-term in SF or NYC or DC.

What's a more realistic long term scenario- on the one hand tech abandons the Bay Area, NYC ceases to be the world capital, DC loses its govt/military/contracting base, or on the other hand Detroit and Cleveland become hot boomtowns for urban living?

**wolverine** · March-23-14, 01:50 PM

The houses are worth a little something the location is almost worth EVERYTHING.

**Meddle** · March-23-14, 02:08 PM

With a million dollars, one could probably buy a significant percentage of all properties in some Zip Codes in town.

**rex** · March-23-14, 02:26 PM

Originally Posted by Bham1982

I don't like these "City A is cheaper than City B" articles because they fail to take into account that homebuying, at its core, is nothing more than an investment.

Thats 1 way of looking at it. I rather consider a home a place to live than an investment.

**MikeyinBrooklyn** · March-23-14, 02:55 PM

Home prices in C of D, except in very "hot" neighborhoods, are astoundingly cheap. Yes, there are some properties not worth having even at the pennies they cost. But there are nice houses in decent neighborhoods that go for a fraction of their actual value. But all throughout Metro Detroit prices are incredibly reasonable. My brother's nice suburban house cost him $225k 2-3 years ago. That house, on the same sized lot, would be over $1M in suburban NY, or $800-900K in Northern Virginia. For all the problems we have in the area, there is more than ample opportunity for owning a very good home at a price that isn't achievable by people in many areas of the country with the equivalent income. And that affordability runs throughout Michigan. Rural homes are affordable. $1M luxury vacation properties up North would cost many multiples if located in the Hamptons [[and your neighbors would certainly not be as friendly!).

**YounginDetroit** · March-23-14, 06:25 PM

I don't think most people realize the opportunity Detroit has to offer. Im 20 and am buying a house in either East English Village or 7 mile Livernois area and I only make $11.00, name a city you can do that. In a few years I will rent it out and make money on that house and, hopefully, more after that. The prices are so low theycan only grow and make a profit. I know Im being optimistic, but that's my nature.

**313WX** · March-23-14, 06:28 PM

Originally Posted by YounginDetroit

Im 20 and am buying a house in either East English Village or 7 mile Livernois area and I only make $11.00,

Being able to afford a house [[not just the mortgage payment/deed, but the expenses to maintain the home as well) while only making $11/hr?

Well bless your heart...

**Scottathew** · March-23-14, 06:56 PM

I think it would have been more meaningful if the question was something like "How much does 1,500 square feet of house cost in a city?".

**Bham1982** · March-23-14, 08:43 PM

Originally Posted by rex

Thats 1 way of looking at it. I rather consider a home a place to live than an investment.

Well a home, yes, but we are talking for-sale properties. If you don't care about investment potential, why not rent [[unless we are talking dirt-cheap properties where the value is irrelevant).

**Bham1982** · March-23-14, 08:45 PM

Originally Posted by YounginDetroit

The prices are so low theycan only grow and make a profit.

I wonder how many investors have uttered such words.

The prices are so low, and that's exactly why you won't make a profit.

**Scottathew** · March-23-14, 08:58 PM

Detroit at this point is filled with opportunity.

Downtown is coming back, it is back. Midtown is booming.

The final and most important piece of the puzzle are the neighborhoods. If Duggans delivers on current promises, the bleeding will stop. After he makes some progress on currently goals, I imagine he'll set forth even goals that are aggressive.

Once crime is addressed investment will start flowing in. We don't even need to fix DPS if there are alternatives, but DPS will improve with time as stable families that are actively involved with raising their children are in Detroit.

**MikeyinBrooklyn** · March-23-14, 10:34 PM

Originally Posted by 48307

Once crime is addressed investment will start flowing in. We don't even need to fix DPS if there are alternatives, but DPS will improve with time as stable families that are actively involved with raising their children are in Detroit.

48307, you are right on with most of your post. But I think with education we should not be fooled by statistics. As new families move in [[and thus, it is not mostly families moving in), literacy and graduation rates will improve. But that will not decrease the number of kids who don't graduate or the graduates who are functionally illiterate. It will just change percentages, because more kids will be in the system, not fewer kids doing poorly.

I have long since advocated completely abolishing DPS. All taxpayer dollars for K-12 education should follow the kids in the form of vouchers. The better schools in the current system with the same staff and leadership could incorporate as not-for-profit schools, with parents and teachers forming the school's board of directors. And all kids could take their money to those schools, charters, private, or suburban schools. The system matters not, so long as kids are getting an education. Schools that are not successful in educating kids would close; who would voluntarily send their kids to a school that doesn't educate their kid? Also, with so many different schools and kinds of schools out there, kids could go to schools that meet their specific needs or concentrates on their specific talents and interests.

Allowing the education money to follow the kids, rather than the other way around, I think would lead to an influx of parents [[or young people who plan to later be parents) to move into the city. School vouchers would be a boon to city read estate; it would be even better for the kids.

**Richard** · March-24-14, 01:20 AM

Originally Posted by Wesley Mouch

Detroit housing is 'affordable'.

I find it funny that we complain about the low prices. The rest of the world [[except Vegas, Phoenix, and Tampa) complain about high prices.

In Detroit anyone with a job can afford a home. Go anywhere west of the Rockies and try that.

We got it good. [[And yes, my mortgage is worth more than my house -- but my mortgage is affordable.)

Tampa is really no different,you can pick up a foreclosed fixer upper in the hood for less then $6k taxes $400 per year verses a nice area for $60k taxes $1200 per year,it is hard to judge each city against because every city is its own micro.Location,location,location is the same anywhere and you can make prudent monies anywhere,but real estate is long term not flipping.

Long term I would say Detroit real estate is a good investment,it has been shown that even in the turmoil of the past many still came out ahead.

**Gistok** · March-24-14, 01:55 AM

Originally Posted by Richard

Long term I would say Detroit real estate is a good investment,it has been shown that even in the turmoil of the past many still came out ahead.

Yeah... OK.... My late parents bought their house [[near Balduck Park on the far east side) for $14,400 back in 1960. When we sold it in 2011... we got $15,000 for it...
51 years later!!

**MikeyinBrooklyn** · March-24-14, 02:44 AM

Originally Posted by Gistok

Yeah... OK.... My late parents bought their house [[near Balduck Park on the far east side) for $14,400 back in 1960. When we sold it in 2011... we got $15,000 for it...
51 years later!!

G, I have to agree. Detroit is one of the few places where over the last number of decades the value of property didn't hold up. Sure, a lot of places had dips, and most industrial cities certainly didn't hold property value relative to inflation, but Detroit is the only place where the bottom fell out entirely and for so long. Of course, we are seeing real growth in the central city now. I think most property in the city has hit bottom and will just go up. But that is cold comfort to people who invested in their homes only to find they couldn't really cash out. A lot of people held on for far too long, hoping the values would go back. When they didn't, people left and abandoned their property. All those empty and decaying buildings we have? For the most part, the owners didn't die leaving them empty. They moved, with not enough value left behind to be worth maintaining, renting or caring. I have an aunt and uncle who retired more than a decade later than planned because their house on Muirland was going to be the money they used to buy their retirement condo. They eventually sold it for a fraction of it's anticipated worth and moved to Oakland County. They are angry to this day that they didn't sell in the '70s [[they sold in the '90s).

**EL Jimbo** · March-24-14, 08:14 AM

Originally Posted by Bham1982

But there are even more investors who disagree, hence the high real estate prices. No one has lost money investing long-term in SF or NYC or DC.

What's a more realistic long term scenario- on the one hand tech abandons the Bay Area, NYC ceases to be the world capital, DC loses its govt/military/contracting base, or on the other hand Detroit and Cleveland become hot boomtowns for urban living?

High property values only last as long as demand on housing exceeds supply of housing. If anything messes with that demand then the bubbles will burst.

In the short-term, it is hard to see anything impacting the bubbles in DC and New York, but there is one overarching issue that could affect every bubble market west of the Rockies be it San Francisco, LA, or Phoenix. That issue is water.

While we've "enjoyed" a very cold, wet winter, the West [[California specifically) have had a very warm, dry winter that has exacerbated already growing drought conditions in the area. If this continues for an extended period of time it will impact the property market.

Water is an essential requirement of life as we know it. If an area lacks the water necessary to support continued population growth or possibly be unable to support the current population, then this will have a negative impact on demand. Without that demand pushing on supply, property values will plummet sharply.

If I were a Southern Californian, I'd have my property up on the market yesterday and look at either moving or renting instead. You don't want to be the one holding the bag when the bubble bursts.