Housing cras threatens michigan economy (mortgage, good credit, loans)

[somelikeithot]

The housing market crash that is running thought the whole country is threatening to destroy Michigan's economy or what is left of it.
With the gov. Fan, may and Frediemac denying high risk loans the banks are tightening up restrictions on loans. This puts a strain on a already bad market, then the speculators are opting out of the game. and this puts another hit on a bad market.
Homes adjusted for inflation are about at where they were 40 years ago, When granny says they bought the little house that is now worth 90k for 8k 50 years ago, just ask what her and grandpa made, you will get something like 60 a week.
Home prices have a long way to fall, the average home owner should pay 3 to 4 times his annual income on a home, but with many at or above 10 times it is no wonder that people are loosing homes left and right. The country is headed for a rescission, but Michigan is already there. The news about how bad Michigan is doing, is running across the nation.
I had a friend who was trying to sell his home, could not get 75% of its value, he told a realtor in another state what he had and the realtor jumped at it, but when he told him it was in Michigan, the realtor stopped and said, if it were any other state but Michigan I would have been very interested, but Michigan's real estate market is dropping like a rock and is not a good place to invest money.
He then told me that people who think that they can wait it out, should look at what happened to the bay area SF in the early 90s when real estate dropped 21% in a year.
It took over 10 years for people to break even, this includes buying at a reduced rate. So if you are buying in Michigan you need to be in it for the very long run. I would sug. putting your money in to T bills, the rate of return is much better and no risk.
If you want to move to MI. and need a home, offer a very low buying price and remember there are very few buyers so CASH is king. You are in charge, and if some idiot will not deal the guy down the st. will. People are hurting and will do anything to get out of a home. Try buying with out an agent, also if you do use an agent try using the listing agent, they will be more apt to work with you on a deal to get both sides of the sale.
And don't expect to make any money on a home in MI for at least 7 to 10 years if that.
Renting may save you money in a bad Mi economy. With rentals open you may be able to have your landlord sub. your home. If you can get it right you may pay less than the interest you would be paying and not have to worry about Insurance and upkeep taxes ect.

[Frankawitz]

The thing about paying rent in the price of rent you pay,It includes all Taxes and Insurances also a Maintenance Fee plus Management Fee. The kicker is You don't own anything after paying rent. It would be better to find away to get out from under the ARM Mortgage, But with the way the market is changing to tighter practises when it comes to Home Loans you have to have real good credit and some money on hand. You would be better off praying for a storm to Blow the Problem away. But the Governor Warned everyone that they would be BLOWN AWAY in her fifth year. Welcome to the Fifth Year.

[somelikeithot]

In this economy in michigan,, Renting may be a cheaper way to go then to own. Realty agents have worked hard over the years to make people think that owning is the only way to go, you are buying something for your money. but in some economys renting is cheaper. lets say you are going for a 100k loan, the intersts payments alone are appx 500 a month, and for this 500 you are "renting the banks money" you have lets say 600 a year property tax. for this you get nothing. lol
now you have 600 a year that is for your insurance, and you may say I have it if I rent, true but not as much. A 150$ polocy will covery most peoples contence. so you have another 300 a year extra to own. so you have a total of 650 a month that you are spending on nothing but recipets even though you are buying to own. "great country"
In this economy with people flooding out of michigan, remember a rental is a apple on the shelf if not used or sold on a date is waisted. Landlords are willing to rent cheaper and lease cheaper in these times to get something rather than nothing. This does not even include the "water heater going bad"
or something more expensive.

[Br1234]

Renting is cheaper than buying. IF the renter saves/invests the money that would otherwise be spent on interest and prop. taxes. If you are just going to blow the money on junk then you are saving nothing.

That being said, there is nothing that will improve the average joes quality of life than owning his/her own home. I love living in a house. I hate being "stuck" in said house but I do love the house life. I can rivet on my airplane all night long if I want and with my 6" of insul. the neighbors can't hear a thing.

[midlander008]

Gas is also included in the rent price in my city. Michigan's winter is so cold, i can leave the heating on all I want and it is free, rooms are warm. If you own your own house. The monthly heating bill alone could be 1/3 to 1/2 of my rent price.

[ByeByeMI]

We sold our home and now rent and we could not be happier. To be honest I have to laugh every time I hear another "we need to raise taxes" cry me a river story coming from the local goverments" BOO HOOO we need another library our 10 year old library is no longer big enough, BOO HOO we need to fund our local zoo, BOO HOO we need to remodel the goverment offices, BOO HOO our City Bus system that runs around town empty (no passengers) more than half the time does not have enough money to run around empty......need I say more. Why buy a home when more than $400 a month goes to wasteful goverment spending. No thank you!!!!! Did it and will NEVER do it again, at least not in Michigan.

[somelikeithot]

The way things are shaping up MI is has not hit the the bottom of the hole yet. Many good people are getting hurt bad and the luck ones are able to sell and move to a state that has not thrown its economy to the dogs.
With the government not backing up high risk loans any more there is a large protion of the population that can not get the loans they need. Take this along with the speculators that over built and we have a bust housing market. You may say this does not affect me, It will believe me it will. couple this with 90 a bbl oil and climbing. a war that has not end, and we are looking at the big R word.

[ByeByeMI]

And they are still building! The housing market is bust and yet new houses are still going up even though there are new builds sitting there empty not being sold. It really makes no sense.

[Ozark Nana]

Originally Posted by ByeByeMI

We sold our home and now rent and we could not be happier. To be honest I have to laugh every time I hear another "we need to raise taxes" cry me a river story coming from the local goverments" BOO HOOO we need another library our 10 year old library is no longer big enough, BOO HOO we need to fund our local zoo, BOO HOO we need to remodel the goverment offices, BOO HOO our City Bus system that runs around town empty (no passengers) more than half the time does not have enough money to run around empty......need I say more. Why buy a home when more than $400 a month goes to wasteful goverment spending. No thank you!!!!! Did it and will NEVER do it again, at least not in Michigan.

But you ARE still "paying" those taxes....it's rolled into your rent, and when your lease is up and the taxes have gone up to the owner/investment company your RENT will go up accordingly. It is a false sense of "security" renters feel....YOU are paying the taxes on that place. Every time you buy something, your taxed on it, so you haven't traded anything out here...except the paperwork involved at the end of the year. You don't get to reap the benefits of the tax break at the end of the year either. My feeling is you should own, not rent....I do, however, see your point.

This same problem is playing itself out across the country....I wish you the best.

O.Nana

[ByeByeMI]

Yes but people are being taxed out of their homes and not out of their apartments. We went from $1500 a month in house payment including taxes to $808 per month for an apartment that is only 100 sq smaller than our house. Do the math, we are no longer paying the $400 ever increasing tax burden the State of MI puts on its home owners. No thank you!!!!!!!!!!