In metro Detroit, home prices lowest since '94; owners feel sting

[English]

I understand where you're coming from. I am also pretty thrifty, and... well, I'll just leave it at that. I'm already too self-disclosing on DYes.

We will see what comes of these long-term trends. For the sake of my friends who are invested in metro Detroit communities through home ownership, I hope that things turn around soon.

[cman710]

I think we will see markets all over the country [[and even within states) diverge widely. Where I currently live in Massachusetts, the market has been stable for the last 3 years, and is only now just starting to barely tick up. In some further out suburbs, the market took such a hit that it will take quite a while for a meaningful recovery to happen.

The problem in the Detroit real estate market is definitely a supply and demand problem. There is an oversupply of housing and low demand. The oversupply comes from the fact that the city lost 25% of its population in the past 10 years, and almost another million people in the decades before that. There is low demand because people are not moving to the city, because people do not want to buy a house that may decrease in value, and because risk-averse people are unlikely to buy houses in "transition" areas. All these things push down property values, and it is a major problem. For that reason, spurring demand in the long term is crucial, because that will naturally cause property values to rise. [[The oversupply will be taken care of by scrappers and firebirds, sadly.)

On the other hand, in other markets, like Ann Arbor, a recovery may be right around the corner in the next few years, if not already. According to zillow.com, property values have risen about 15% there in the past year.