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

[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.

[Richard]

^ It would have been just easier to ask me what my renovation costs were,and I would have said nominal because I buy vintage houses and put them back to period correctness,which is quite economical useing salvaged materials.

In Fl you can pull a homeowners permit which allows you to pull permits for the electrical,plumbing etc but you have to live in the house for a year.

I will not get into a debate on real estate values or perceived values when purchase and sales prices are public information,people must be buying at inflated prices in Detroit because they are selling,just as they are in other cities.

The loft prices are crazy and are the easiest in renovations because you can throw a toilet in one and call it a loft.

Do you think even after renovation costs Mr Gilbert’s purchases are valued the same as they were 7 years ago?

7 to 10 years ago it was easy in Detroit from a strictly investment aspect to see which neighborhoods would have increased in value rapidly,mostly because the metrics have been repeated in countless cities across the country.

[mwilbert]

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.

I don't doubt that it's somewhat overblown, but I've seen a lot of examples in that general range. Note that Richard did say "after rehab". A house on my block which sold under 50K resold at 379K. That one was a massive rehab. Or look at the equity prices at 1300 Lafayette--I've seen a number of units that were listed for single/very low double digits now listed for well over 100K.

A specific house I was looking at on E. Boston, listed for 38K in Jan 2011 [[i have my notes) sold for 315K this March. It wasn't in terrible shape in 2011, and it doesn't look like any rehab was very substantial.

Note that rehab only happens in areas where the prices are high enough to make it worth doing rehab. There weren't very many places like that in 2010. Now there are lots.

But let's be clear, this is still a small number of areas in the city. You are seeing it spread out a bit now, like into Bagley, but there are vast areas where housing values are still way too low to get significant rehab.

[Richard]

^ at this time,but that is what makes those areas good choices for somebody looking to relocate,they can still get into them cheap enough and with the abundance of YouTube how to,10 years from now they should also see a increase.

Its the labor costs that drive up renovation costs,if somebody does not mind getting thier hands dirty there is still a lot of opportunities in the city.

[mwilbert]

I agree, but ten years ago you could get real bargains in the better parts of the city. Now you can get bargains, but they are mostly in parts of the city that are more speculative. But there are definitely opportunities.

[Seven&wyo]

There aren't too many "deals" in Bagley anymore. I bought at a good time andthr value of my properties have either doubled or tripled even. I know one guy who bought his house for 14k in 2010 renovated it and sold it for 110,000.00 a few months ago

[Richard]

Yea,I seen the listings and that is a part of what drives the values.

In my case,I am not in a highly desirable location but because people are buying houses for $150k in order to tear down and build a house to sell for $450k it drives the prices up in the surrounding neighborhoods.

Outside of who can actually afford those prices,if somebody can only afford a $120k house that is what they will buy.

Weather ones feels it is inflated or a perceived value plays little bearing on it if they are selling.

Real estate and it’s ebbs and flows is probably one of the most documented thing in history and the basics have not changed in hundreds of years.

Detroit went through a dark time,outside of some catastrophic event I do not think it will be back there anytime soon,I think at this point something that sells today at its lowest price,no matter what, it will never sell again at that price in the future,like what happened in the past.

[ABetterDetroit]

Good points have been made by a few posters with vastly different perspectives proving that the housing market in Detroit now offers the opportunity for a homeowner to build net worth via equity in the primary home.

Thank God because without that opportunity Detroit has zero chance to compete on the national or regional stage economically since building equity is a main driver for a majority of home owners in America. Without a possibility of building equity in a home, keeping existing or attracting new residents will not happen. We are not or ever will be NYC.

It also is a proven fact that exactly what created this new opportunity in the Detroit housing market was NEZ property tax abatements. The evidence is now in.

If Michigan really wants to leave its rust belt history behind, we must bring the tax code into the 21st century and flatten the property taxes on occupied property and replace the lost revenue with diversified, modern, less corruptible and bureaucratic tax vehicles. High property tax rates have been devastating to Detroit in the past and are now damaging many other communities in this state.

The economy in Michigan will never diversify sufficiently without major changes on this front. High property tax states are getting their asses kicked and handed to them by the rest with only a couple exceptions of which are either a very high income per capita or a plethora of valuable natural resources in the ground of which Michigan as a whole has neither.

Tax the crap out of property owners who destroy neighborhoods with blight while speculating instead of growing families and people that spend capital improving their home.

We have been sitting around scratching our heads wondering how to diversify our economy for decades while sending all our skilled trade youth out of state permanently to build the home improvement economy elsewhere that has been booming everywhere but here because we ‘uncap the property taxes’ every time somebody pulls a permit. Duh. How stupid can we get?

[313WX]

Good points have been made by a few posters with vastly different perspectives proving that the housing market in Detroit now offers the opportunity for a homeowner to build net worth via equity in the primary home.

Thank God because without that opportunity Detroit has zero chance to compete on the national or regional stage economically since building equity is a main driver for a majority of home owners in America. Without a possibility of building equity in a home, keeping existing or attracting new residents will not happen. We are not or ever will be NYC.

It also is a proven fact that exactly what created this new opportunity in the Detroit housing market was NEZ property tax abatements. The evidence is now in.

If Michigan really wants to leave its rust belt history behind, we must bring the tax code into the 21st century and flatten the property taxes on occupied property and replace the lost revenue with diversified, modern, less corruptible and bureaucratic tax vehicles. High property tax rates have been devastating to Detroit in the past and are now damaging many other communities in this state.

The economy in Michigan will never diversify sufficiently without major changes on this front. High property tax states are getting their asses kicked and handed to them by the rest with only a couple exceptions of which are either a very high income per capita or a plethora of valuable natural resources in the ground of which Michigan as a whole has neither.

Tax the crap out of property owners who destroy neighborhoods with blight while speculating instead of growing families and people that spend capital improving their home.

We have been sitting around scratching our heads wondering how to diversify our economy for decades while sending all our skilled trade youth out of state permanently to build the home improvement economy elsewhere that has been booming everywhere but here because we ‘uncap the property taxes’ every time somebody pulls a permit. Duh. How stupid can we get?

"Detroit...Michigan...something...something...prop erty taxes!!!"

And there it is...

[Danny]

I have seen it coming. Parts of the West side Detroit ghetto had seen a spike of homes and vacant lots being bought by folks with money. The ghetto hoods north of the New Center Area, east of the Lodge FWY. and west of Woodward area is in the early stages of gentrification.

[Canadian Visitor]

I will certainly reiterate that affordability is an asset.

That said, the discussion now seems to have titled more towards property investors, who unto themselves will not bring population growth or significant employment growth.

I seriously considered investing in the Detroit market, strictly as a financial play. But while I've visited over the years, I don't consider my knowledge sufficient for me to be comfortable with that play.

Regardless, I only bring it up to point out that the low prices might bring in someone like me, who might imagine buying 5 homes on the same street at under 50k a pop, rehabbing them all, and trying to net double after investments.

That wouldn't be a bad thing for Detroit [[its clearly been happening); but it would really bring a few trades jobs and landscaping and maybe a real estate agent or two, for a couple of years.

Taken by itself, that isn't the turn-around story.

As pointed out elsewhere, that's tied up w/retaining and attracting more local and out-of-state [[but studied in Detroit area) students, to stay as employers, employees and residents.

That involves a host of interwoven issues.

Its the old story of good schools; public safety and perception of same, critical mass of certain types of employment etc. etc.

Affordability can absolutely be a key building block, but not in isolation.

[ABetterDetroit]

"Detroit...Michigan...something...something...prop erty taxes!!!"

And there it is...

Another big problem is there are a whole lot of really stupid people around here who do not want to change a thing but somehow keep expecting a different result even though the evidence of fucked up policy over decades is visible to the naked eye plain as day. It is the effect of a brain drain.

Listen to those idiots some more and the region will be trying to figure out how to tear down Inkster, Roseville, Lincoln Park, Redford, Warren etc... in another couple decades. They are the same Morons who let one of the greatest cities in the free world rot into the ground. That mistake would be the ultimate of stupidity.

[Detroit500]

I work in a somewhat specialized field, and rarely have the choice to choose what market I can work in, but have to rely on national agencies and searches for positions that open up at similar times that I am looking. I so wish that I could be back in Detroit, where renting and buying home prices are much more reasonable than where I am presently. But, without more of the jobs in my line of work being available in Detroit, there is no way I could afford to live there.

Quite the catch 22...