Detroit [[metro) is Most Affordable Market for Middle-Class Families

[313WX]

https://www.housingwire.com/articles...class-families

Rounding out the top 5 are Rochester [[NY), Dayton, Buffalo and Pittsburgh, PA.

[Canadian Visitor]

https://www.housingwire.com/articles...class-families

Rounding out the top 5 are Rochester [[NY), Dayton, Buffalo and Pittsburgh, PA.

While not enough, on its own, affordability is indeed an attractant/advantage.

Living in a city, as I do, where a 1bdrm apt of no particular appeal can run you over 2k per month; and a entry-level 1bdrm condo can set you back 600k USD.........

The community that can offer splendid, large home for 1/2 that price has something going for it.

The key, of course is having the employment quality and quantity as well.

[313WX]

While not enough, on its own, affordability is indeed an attractant/advantage.

Living in a city, as I do, where a 1bdrm apt of no particular appeal can run you over 2k per month; and a entry-level 1bdrm condo can set you back 600k USD.........

The community that can offer splendid, large home for 1/2 that price has something going for it.

The key, of course is having the employment quality and quantity as well.

Bingo to the bolded.

I believe a lot of Detroit's problems would solve themselves if there was an abundant supply of good-paying jobs and a healthy diversity of growing industries.

It's one city that can really use another Henry Ford or Jeff Bezos right now.

[401don]

Bingo to the bolded.

I believe a lot of Detroit's problems would solve themselves if there was an abundant supply of good-paying jobs and a healthy diversity of growing industries.

It's one city that can really use another Henry Ford or Jeff Bezos right now.

Don't forget the educated workforce.

[313WX]

Don't forget the educated workforce.

It has [[or at least produces) that.

It just offers nothing to keep it.

[Chicago48]

I read a stat some years ago that 1/2 Detroit's population is on fixed income [[SSI, unemployment, pension)

[Onthe405]

This is understandable, given RE prices are largely driven by supply & demand. This metric will keep Metro Detroit RE "affordable" into the foreseeable future. Geographic land limitations drive up values in locales like the Bay Area, Seattle, SoCal, Manhattan, and Miami Beach. This limitation doesn't exist in SE Michigan. Land is easily build-able & plentiful, so the Metro area could expand up to The Thumb or Lansing with no obstacles.


In other locales like Chicago, Toronto, Minneapolis, and Atlanta, there isn't necessarily a geographic limitation. However, there tends to be a higher density concentration of quality jobs, education, & desirable housing in select geographic areas [[sometimes, but not always, a "downtown"). The proximity to those areas drives up the RE values. This is true on some scale in Oakland County, which is the closest thing in the Detroit area in terms of job opportunity, housing stock, and concurrent RE values.


"Affordable" and "good investment" shouldn't be misconstrued as interchangeable terms, either. Unlike high-demand areas, buying a house in Metro Detroit is more like buying an automobile than an investment. You own the asset and don't have to pay rent [[good), you can create a larger cocoon exactly to your own liking to live in [[good). The downside is that [[even when holding the asset for several years) the appreciation is historically minimal. The lack of RE appreciation is especially problematic when considering a job opportunity in a high housing demand city.


A colleague, who relocated from Vancouver to London to San Antonio said his fellow transplants from expensive urban areas dub this the "Texas Trap". It's a great trip to cheap bang-for-the-buck housing, but that trip is also one-way. It all but closes the door to any opportunities in expensive metro areas in the future.

[313WX]

This is understandable, given RE prices are largely driven by supply & demand. This metric will keep Metro Detroit RE "affordable" into the foreseeable future. Geographic land limitations drive up values in locales like the Bay Area, Seattle, SoCal, Manhattan, and Miami Beach. This limitation doesn't exist in SE Michigan. Land is easily build-able & plentiful, so the Metro area could expand up to The Thumb or Lansing with no obstacles.


In other locales like Chicago, Toronto, Minneapolis, and Atlanta, there isn't necessarily a geographic limitation. However, there tends to be a higher density concentration of quality jobs, education, & desirable housing in select geographic areas [[sometimes, but not always, a "downtown"). The proximity to those areas drives up the RE values. This is true on some scale in Oakland County, which is the closest thing in the Detroit area in terms of job opportunity, housing stock, and concurrent RE values.


"Affordable" and "good investment" shouldn't be misconstrued as interchangeable terms, either. Unlike high-demand areas, buying a house in Metro Detroit is more like buying an automobile than an investment. You own the asset and don't have to pay rent [[good), you can create a larger cocoon exactly to your own liking to live in [[good). The downside is that [[even when holding the asset for several years) the appreciation is historically minimal. The lack of RE appreciation is especially problematic when considering a job opportunity in a high housing demand city.


A colleague, who relocated from Vancouver to London to San Antonio said his fellow transplants from expensive urban areas dub this the "Texas Trap". It's a great trip to cheap bang-for-the-buck housing, but that trip is also one-way. It all but closes the door to any opportunities in expensive metro areas in the future.

Out of curiosity, why would one be concerned about that door closing if they moved to a city for the cheaper COL in the first place?

IMO, the perfect balance is living in a place that has a diverse economy, big city amenities and is also affordable. Such places still exist.

[Onthe405]

Out of curiosity, why would one be concerned about that door closing if they moved to a city for the cheaper COL in the first place?

As is the case with this guy, many people are driven by seeking ever-improving career opportunities, which is an entirely different motivation than looking for a place with the intent of reducing the cost of living. While this may not be true for you or me, career comes first to these folks, locale second.

Because lower COL is usually accompanied by lower salaries, the longer the career-motivated types spend in a cheaper place, the more difficult it becomes to negotiate the ever-increasing salary gap to jump back.

The key to side-stepping the "Trap" in his case might be to resist the temptation to spend the entire windfall of the Vancouver proceeds on a more extravagant residence in TX, and invest a portion elsewhere [[there might be capital gains penalty associated with that strategy, though).

Ultimately, "quality of life" is an extremely subjective & personal phrase. To each his/her own.

[313WX]

As is the case with this guy, many people are driven by seeking ever-improving career opportunities, which is an entirely different motivation than looking for a place with the intent of reducing the cost of living. While this may not be true for you or me, career comes first to these folks, locale second.

Because lower COL is usually accompanied by lower salaries, the longer the career-motivated types spend in a cheaper place, the more difficult it becomes to negotiate the ever-increasing salary gap to jump back.

The key to side-stepping the "Trap" in his case might be to resist the temptation to spend the entire windfall of the Vancouver proceeds on a more extravagant residence in TX, and invest a portion elsewhere [[there might be capital gains penalty associated with that strategy, though).

Ultimately, "quality of life" is an extremely subjective & personal phrase. To each his/her own.

I understand that everyone has their own preference, but it's unusual for one to move from a high COL place to a low COL and then yearn to move back to the high COL place. Even though the salaries may be lower [[not always the case, if you internally transfer in companies, they sometimes let you keep your high COL salary), the idea is that you'll have more disposable income to take trips more frequently, own more expensive cars, own bigger homes, etc.

Still, it's interesting to hear more about that perspective.

As far as career growth, this can be achieved in any large city with a sizeable/diverse corporate presence as long as you're not in a niche area of tech or finance.

[iheartthed]

In other locales like Chicago, Toronto, Minneapolis, and Atlanta, there isn't necessarily a geographic limitation. However, there tends to be a higher density concentration of quality jobs, education, & desirable housing in select geographic areas [[sometimes, but not always, a "downtown"). The proximity to those areas drives up the RE values. This is true on some scale in Oakland County, which is the closest thing in the Detroit area in terms of job opportunity, housing stock, and concurrent RE values.

Toronto has a development green belt. That is the biggest factor in the cost there. It is one of the most expensive places in North America, but the median income in Toronto isn't much higher than Metro Detroit. The other expensive places on the list also have strong anti-sprawl controls to keep the value of land high.

Chicago is actually more similar to Detroit, in that it is a city that you would expect to be more expensive based on its size. But, like Detroit, it has a ton of abandoned and under-utilized property within the central city. Inertia has helped there a little, but the city still suffered massive population losses last decade due to people flowing to new suburban developments.

[DeLemur]

Thanks for posting.

The U.S. is in a serious housing crisis and Detroit's living affordability really shines. We would do well to tout that.

[Chicago48]

Thanks for posting.

The U.S. is in a serious housing crisis and Detroit's living affordability really shines. We would do well to tout that.

I was in the city a few weeks ago and went down I-94/Michigan and Cass and Mack Streets. Over half of those stretches were boarded up buildings and vacant land. I kept wondering, why don't the city build parks or landscape on the vacant land; what about putting murals on the buildings. There's a lot of beautification the city can do while waiting for development.

[401don]

I was in the city a few weeks ago and went down I-94/Michigan and Cass and Mack Streets. Over half of those stretches were boarded up buildings and vacant land. I kept wondering, why don't the city build parks or landscape on the vacant land; what about putting murals on the buildings. There's a lot of beautification the city can do while waiting for development.

The answer is the same answer to most everything - money. The city has been putting its emphasis on demolishing vacant houses. It's just now getting on financial footing to be able to maintain its parks. Building more/landscaping requires initial $ plus more for upkeep. What new parks are getting built have been with corporate assistance.

[ndavies]

The answer is the same answer to most everything - money. The city has been putting its emphasis on demolishing vacant houses. It's just now getting on financial footing to be able to maintain its parks. Building more/landscaping requires initial $ plus more for upkeep. What new parks are getting built have been with corporate assistance.

And more importantly is the source of the funds to do the teardowns.

The city received money from the federal governments Hardest hit fund to do the tear downs. The Feds are not handing out that money to upgrade or make new parks. They are only handing it out to teardown houses.

That source of funding is about to run out. The city will have to find new sources of money to fund further demolitions.

Duggan's proposed a bond vote to continue to fund the demolitions.

[Richard]

Thanks for posting.

The U.S. is in a serious housing crisis and Detroit's living affordability really shines. We would do well to tout that.

Agreed

If we look at what drives movement and useing California as and example,there are two types.

One is homeowners that purchased long ago and are cash poor but house rich,they can sell locally but only purchase like for like,but the COL increases and taxes pushes them out.

The bigger group are the ones that are simply priced out with zero opportunity to ever dream of homeownership or spend a majority of thier income on housing which leaves little left to actually enjoy what the city has to offer,so the perks become non issue.

If I was going to relocate to Detroit for better opportunities,the near future of potential homeownership box could be checked off,it appears to provide the urban feel requirements,that box gets checked off.

The biggest motivator would be where would I work and would it be enough financially to improve my current situation.

That covers a diverse group of people on all wage levels and is probabley the million dollar question for any city.The only thing the city can do is work on providing and encouraging employment diversity.

Detroit has been on that uphill slow climb in doing that and is getting there.

So what does it take to encourage others to relocate there en mass like they are doing in Texas,Arizona,Florida and Portland.

One can say no snow but there are a lot of mid westerners also stuck in small towns etc.

So what would be the deciding factor in choosing Detroit over Cincinnati?

Which I personally think the two are comparable,verses comparing Detroit to New York or Chicago or Atlanta.

Those other cities had the jump many years ago.

I think the biggest deterrent to Detroit is a public image one that is based largely on negatives.

I see people posting negative stuff on the internet about Detroit that has not even applied for over 5 years,it is a quickly evolving city,that is not to say that things happening there are not real to the citizens,but a lot of what is happening is no different then any other urban situation in any other city.

It has been mentioned that the city has an uneven amount of a skilled labor force,that leaves two choices.

Train the workforce or import enough residents to overwhelm the math.

But there are programs that have been implemented concerning workforce training both public and private.

So that leaves getting people to move thier.

Honestly in the past Detroit was not on my radar,outside of the automotive and helping save the world aspect,I never gave it a second thought and all you heard was the negatives blasting in the news.

So how do you plant that seed in ones mind in order to put Detroit and what it has to offer on thier radar so they stop for a second and give it a serious look.

[ndavies]

Also, don't forget this survey is based on metropolitan markets. Detroit's market includes the city and all of the suburbs. The Region's average house cost is dragged down by the City. If you dropped the city out of the comparison, This market would not be near as affordable.

[Gistok]

I've lived in my house in St. Clair Shores since 1990. One of the nice things about the 1994 passed Headley Amendment to the Michigan constitution was the reduction of the property taxes, and increase of the sales tax [[only non food, non medicine) from 4% to 6%. Locked into this amendment was that annual property taxes could only increase by the home value increase, or 5%... whichever is lower.

The drawback [[or in my case good fortune) about this taxation level is that people who stay put and don't move keep lower taxes. It's those folks who move around within the state that pay a significant increase in taxes. For example, I pay about $2000 in annual property taxes. If my neighbor [[similar home value) were to sell his house, the new owner would probably pay closer to $3000 annually.

[Richard]

^ we have the same or similar in Fl,adding a reduction in school taxes after a certain age,I think that was a part of the whole neighborhood stability thing.Encouraging long term homeowners to stay put.

It does not work very well down here though,neighborhoods have a 10 year or less cycle,you can buy a new house in a nice neighborhood but in 10 years or less it becomes a crappy neighborhood.

The reverse of that is to buy a house in a crappy neighborhood by timeing the cycles,but most want it now in regards to new housing,which brings unchecked sprawl.

I would not be sure if that is the answer for the actual city,the dependence of increasing population by encouraging in state movement or in essence robbing from Peter to pay Paul.

Not everybody is into the unique urban experiences,I guess in a perfect world the urban and suburban aspect should really be like one big happy family,but we know that is not the case anywhere.

[Gistok]

Richard, you can add a new item to neighborhood values in Florida... and that is thanks to the rising sea level and global warming. I've been reading that the poor part of Miami called Little Haiti is suddenly being bought up by developers at a rapid rate... reason? It's 9 ft. higher elevation than most of Miami.... new location for high rises should the polar ice melt faster than anticipated.

Here in Michigan we have no worry about that... 579 ft. above sea level is our lowest point!!

[Richard]

LMAO Gistok you may be on to something there.

Little Hati is and always has been what it implies and the city of Miami did not do what Detroit is doing now,which is taking steps while it progresses to insure an element of affordable housing in the future.

Progress is its demise.

Throw a shed in the back yard and you can get $700 rent from it,they are doing the same thing in San Francisco with tents.

I took a wrong turn in little hati back in the early 80s and landed in the middle of a riot,luckily I was in a rental so the damage was covered.

You cannot touch any property that touches or even views any kind of water front property in fla under the $600k minimum most tear downs are over a million.

Not many concerned about sea levels checkbook wise anyways.

Where I am at the houses I bought in what some refer to as the ghetto,and where I live,in 2010 for $6000 are now valued over $120,000 blocks away a vacant lot is $150k.

Soon it is time for me to cash out.

[bartocktoo]

Richard where did you live where in 2010 homes were valued at $6,000 and now valued at $120,000?? And yes I'm questioning you credibility especially after reading your bloviating and esoterical last post on this thread.

[Richard]

Richard where did you live where in 2010 homes were valued at $6,000 and now valued at $120,000?? And yes I'm questioning you credibility especially after reading your bloviating and esoterical last post on this thread.

So you are saying that I should have added a disclaimer to my post warning that it should not be considered a real estate investment advice,outside that it had no relevance to real estate investing?

Post 11 was spot on.

I live in Fl,it’s no secret,real estate is at or above the 2006 prices,no difference then many other cities.

I bought at the bottom when nobody was buying,most were still dumping.

It is no different in Detroit,I see properties that were listed in the city in that time frame in the 60 to 100k and now listed after rehab in the $400 to $600 range.

It is kinda hard to question ones credibility even more so when it comes to real estate or the trends of movement related to it,because it is well documented.

Maybe not so much towards how a city can attract those fleeing the high COL to other cities,

[313WX]

So you are saying that I should have added a disclaimer to my post warning that it should not be considered a real estate investment advice,outside that it had no relevance to real estate investing?

Post 11 was spot on.

I live in Fl,it’s no secret,real estate is at or above the 2006 prices,no difference then many other cities.

I bought at the bottom when nobody was buying,most were still dumping.

It is no different in Detroit,I see properties that were listed in the city in that time frame in the 60 to 100k and now listed after rehab in the $400 to $600 range.

It is kinda hard to question ones credibility even more so when it comes to real estate or the trends of movement related to it,because it is well documented.

Maybe not so much towards how a city can attract those fleeing the high COL to other cities,

I also curious to know now.

What part of FL was this where homes were only going for $6K

[bartocktoo]

So you are saying that I should have added a disclaimer to my post warning that it should not be considered a real estate investment advice,outside that it had no relevance to real estate investing?

Post 11 was spot on.

I live in Fl,itÂ’s no secret,real estate is at or above the 2006 prices,no difference then many other cities.

I bought at the bottom when nobody was buying,most were still dumping.

It is no different in Detroit,I see properties that were listed in the city in that time frame in the 60 to 100k and now listed after rehab in the $400 to $600 range.

It is kinda hard to question ones credibility even more so when it comes to real estate or the trends of movement related to it,because it is well documented.

Maybe not so much towards how a city can attract those fleeing the high COL to other cities,

It absolutely had relevance to the point you were trying to make or you wouldn't have made it. And I guess I missed the part where there were $60-100K homes in Detroit in 2006 turned into $400-600 now. Outside of I'm sure one or two examples, neither of those number ranges is right. Now, perhaps someone buying like a BE home or an IV home might have seen that sort of return in raw percentages not factoring in renovation costs, but the reality is that at least half of those increases into the homes [[which very few could have and have the capital to do) were paid for as renovations after the homes were bought. And the examples of that happening is far overblown in this town.