This is just flat depressing

Post by **mr tibbs** » Thu Mar 19, 2009 7:47 am

Median Home Price in Detroit = $7,500

According to the Chicago Tribune, the median price for a home sold in the month of December 2008 in Motor City is Seven Thousand, Five Hundred dollars.

I had to write it out that way because I simply couldn’t wrap my head around the numeral $7,500 for a home.

Granted, its in one of the most economically devastated regions of the country, but still — that data point is amazing.

Linky #1
Linky #2

Wow, just wow. How depressing is that?? How is the housing market doing in your guys' area?? Around here house prices have dropped a little, but nothing like that. I would say that a house that was worth $250,000 a year ago is now closer to $200,000 or maybe a little lower.

Post by **fuzzysnuggleduck** » Thu Mar 19, 2009 7:55 am

Average price of a home in BC is still just under $400,000 CAD... and that's after a 13% price drop from this time last year.

OldSchoolFool · Post by **OldSchoolFool** » Thu Mar 19, 2009 9:28 am

In most places what they report as "dramatic home value drop" is just a reduction in the bubble price. Example: you bought your house in 1999 for $165k. By 2006 the value is $320k. Now it's worth $249k. The media breathlessly reports a 22% drop in value for your +50% investment!

"the job of the media is to sell fear to the public, and them old ladies love to buy that fear."- Manson.

Another media phenomenon is the reporting of "troubled mortgages" vs. the overall market. I am a little fuzzier on the numbers but it goes basically like this: of all homeowners something like a third to half have no mortgage. Of the rest, most are current, not upsidedown and solvent (for now). The plans the government shoves down our throats to "save homeowners" are really only for 2-3% of actual mortgages!

As for Detroit- what did the $7.5k house start at during the 2005-06 peak? For them, it's still a disaster. Unless you make more than $38 bucks a month.

joyride · Post by **joyride** » Thu Mar 19, 2009 9:34 am

obviously you guys need a trip to detroit I still wouldnt pay 7.7k for a place! Although, 'investors' have been buying up a ton of these cheap houses and plan on holding them. thats all the city needs, a bunch of poeple owning the homes, but letting them rot. On the other end of things, West Bloomfield (wealthy suburb area) houses have gone from 700k to under 500k. 500 is still a lot of money, but losing 300 in less than a year is pretty bad.

And you can go to the public auctions and buy a home for $25. Just have to beat the bums and bears out of it.

OldSchoolFool · Post by **OldSchoolFool** » Thu Mar 19, 2009 9:49 am

Does any one in Detroit rent apartments? What's the going rent? Probably not $38 a month. Minimum wage earners should be buying up the extra houses and living like kings. But then they'd have to fix stuff, care about where they live, pay for garbage service, taxes... nah, responsibility is a big responsibility, even for $38 a month.

Post by **fuzzysnuggleduck** » Thu Mar 19, 2009 9:54 am

OldSchoolFool wrote:In most places what they report as "dramatic home value drop" is just a reduction in the bubble price. Example: you bought your house in 1999 for $165k. By 2006 the value is $320k. Now it's worth $249k. The media breathlessly reports a 22% drop in value for your +50% investment!

I've often felt that the housing market in 2006-2008 was a huge, unsustainable bubble. At least up here in western Canada. And everyone that bought during the bubble (especially investors

), thinking it could somehow continue to grow are having a really tough time trying to dump their place without taking serious loss.

But the fact is that short term buyers and home flippers are experiencing a drop. The people who buy homes to actually live in them (and bought them before the bubble was enormous) aren't experiencing some massive devaluation because they didn't buy at the peak of the bubble.

While I respect the legality, rights and even the benefits of investors and the so-called free market, I'm not happy with how all the short term buying and trading of property as investments was making it harder for people who legitimately want a home to live in, to actually get one. While I really don't know jack about how the real estate market really works, all this treating homes like stocks seems to almost be profiteering (I think that's actually an incorrect usage of the term, but you know what I mean).

I guess I'm happy to see it cool off a bit, maybe that will attract new home buyers and scare off the flippers.

Post by **smgreen20** » Fri Mar 20, 2009 2:51 am

On top of that $38, escrow (insurance, property tax) will need to be added. Though I would'nt see it being that much.

If you did pay w/a CC, then no insurance would be needed.

OldSchoolFool · Post by **OldSchoolFool** » Fri Mar 20, 2009 2:11 pm

hahaha that's the kicker.
The closing costs are probably double the price of the house!!!

Me-262 · Post by **Me-262** » Fri Mar 20, 2009 3:29 pm

I"ve been through DEE-troit back in the later 80's. It was crap then. While that's a wild number, what was the value 5 years ago before this ship hit the fan ?

Here in Ottawa a townhouse is easily $200k, a reasonable single home $350. Values haven't really dropped all that much locally. We sold our townhouse for $185k about 4 years ago, bought it for $165k two years before and the original owners paid $110k 4 years before that.

My sister lives Calif near Newport. A crack house is worth $1 million because of the land. Both her and her husband are laywers who make waaaaaaaay more than I do and they can only afford a townhouse, those are worth about $750k.

rlockwood · Post by **rlockwood** » Fri Mar 20, 2009 7:55 pm

OldSchoolFool wrote:Does any one in Detroit rent apartments? What's the going rent? Probably not $38 a month. Minimum wage earners should be buying up the extra houses and living like kings. But then they'd have to fix stuff, care about where they live, pay for garbage service, taxes... nah, responsibility is a big responsibility, even for $38 a month.

when your first house breaks, just buy a new one!