[magellan]

Originally Posted by MichiganMovesSouth

Thanks again nessatar -
You are right - things come up and we might have to sell sooner than planned. That does worry me but that can happen to anyone at anytime, right?

If we buy now chances are we will pay below market. Renting is costing us about 10k per year - out the window, never to be seen again. On the flip side that is a small price to pay for the freedom to pick up and move anywhere we want at virtually anytime.

My question to everyone is this - Is it really only smart to buy a house when the market is booming and you are going to pay top dollar? If that's the case, the whole country is in BIG trouble! (which goes without saying)

Does everyone really think that in 10 years a house worth 200k now will only be worth 130k? It's got to come back sometime and analysts are saying they are seeing signs of the bottom. I believe this - we house hunted all summer - lost a condo due to other offers, tried to see 5+ houses but they were all pending, and we had other parties walking through a handful of houses the same time we were - it sure felt like it was an ok market when everything we liked was sold or had a lot of interest.

PS - we did make an offer on a condo in hopes that if we had to move we could rent it out. We did not get it because of multiple offers. The downside to the condo was the $230/month association fee and HIGH taxes. Even if was paid off in ten years we would be paying about $600-$700 per month for taxes and association fees!

No, don't buy in a housing boom either. There are plenty of times throughout Michigan's history where we were neither in a housing boom or bust. Now through 2011 - 2012 will be a bust overrall. You might find a good deal here and there, and West of Lansing will rebound sooner than East of it. The multiple offers that you're finding and analysts saying they sense we've hit bottom are all lightning strikes. Definitely there is no trend being seen that things are improving. I'll believe we've hit bottom today if a year from now we've had 12 solid months of year over year sales volume increases (and not 50% of the home sales foreclosure sales). Only crackpot analysts and crooked real estate "experts" call a "bottom" when we're in one.

You mention that you pay $10,000 a year for rent and it is gone. Are you going to buy a house with cash? Because otherwise, if you have a standard mortgage, most of your house payment goes toward interest right to the bank, never to be seen again. Sure it's tax deductible, but that's like throwing out $1 so that you can get 30 cents back. So your payment on a $200,000 house is $1200/month, with $100 or so a month going toward principle. That's a whopping $1200/year that you're gaining. Add in your tax deduction and you're at about $2000/year. You will lose more than $2000 a year for at least three years. If you have to sell in three years, you will be out WAY more than $6000 just in real estate commissions. Put your money in a money market account and it will do better.

I know you won't take my advice, but just wanted to paint a true picture for you. We got the same advice 10 years ago, ignored it, and got lucky. Not a lot of people are as lucky as we were.

Or I'd do nessatar recommends, and buy a multi-family and live in one of the units. I'd shoot for Holt personally, as I graduated from there years ago.

[nessatar]

Originally Posted by MichiganMovesSouth

My question to everyone is this - Is it really only smart to buy a house when the market is booming and you are going to pay top dollar? If that's the case, the whole country is in BIG trouble! (which goes without saying)

No. I think the best time to buy is when home values are going up at a modest, sustainable rate.

Some areas of Michigan are doing better than others and are still in demand. It sounds like you may have found one of them and that's great. I would still be careful about over-improving your place if you buy until things get better. Also keep in mind that when you buy a house, very little of your mortgage payment is applied to your principle every month for the first few years- much of it is lost on interest.

You said you are looking to own for 7-10 years. Consider what you will actually owe at the end of that period and add Realtor fees and closing costs (about 10%) and that is what you will need to sell for to come out even. You will need to sell for more if you want to get back some of that monthly interest payment and any improvements you have made. Of course this is possible. I just want to make the point that yes, you are "throwing away" thousands a year in rent, but you won't necessary get back every dollar you pay in your monthly mortgage either. A lot of people think "If I pay $1000 a month on a house, I'll get all that back when I sell, so it's better than renting." They don't realize that of that $1000, $600 is interest. Your down payment will help you in that regard, of course.

Just playing devils advocate, that's all.

[nessatar]

LOL. Magellan beat me to it. Sorry for the redundancy.

[MichiganMovesSouth]

Ok - I will try to answer all of your questions because I appreciate this feedback and want more! By the way - how do you quote people in the shaded blue instead of this way????

Buying a home in Canton, in my opinion, is a horrible investment. That said, it is good that you're looking in East Lansing and Ann Arbor- I think property and home uniqueness/maturity in those two cities will be a better (or not as bad) investment.

Are you only considering Chelsea or Holt/Mason, or would you live in Ann Arbor or East Lansing proper?

I have to ask - why is buying in Canton a horrible investment? Canton has great schools (Plymouth/Canton schools) is close to places like Ann Arbor and Plymouth which both get good reviews on this forum and in other places. Also, we can't consider buying IN AA b/c that would be a hike to Jackson. We would also stay away from downtown EL b/c it is over run by college students - I used to be one of them!

If he has to stay working in Monroe then our best option is Canton - I work in Farmington Hills so it's sort of in the middle. If we move further away there is a chance I can work from home - in case you're wondering why we would consider AA or EL area if he works from Jackson.

I know you won't take my advice, but just wanted to paint a true picture for you. We got the same advice 10 years ago, ignored it, and got lucky. Not a lot of people are as lucky as we were.

This will give away my age but 10 years ago I was 16 living up north - no clue what was going on in the market - can you shed some light as to what "advice" you were given that you ignored??

[magellan]

Originally Posted by MichiganMovesSouth

Ok - I will try to answer all of your questions because I appreciate this feedback and want more! By the way - how do you quote people in the shaded blue instead of this way????



I have to ask - why is buying in Canton a horrible investment? Canton has great schools (Plymouth/Canton schools) is close to places like Ann Arbor and Plymouth which both get good reviews on this forum and in other places. Also, we can't consider buying IN AA b/c that would be a hike to Jackson. We would also stay away from downtown EL b/c it is over run by college students - I used to be one of them!

If he has to stay working in Monroe then our best option is Canton - I work in Farmington Hills so it's sort of in the middle. If we move further away there is a chance I can work from home - in case you're wondering why we would consider AA or EL area if he works from Jackson.



This will give away my age but 10 years ago I was 16 living up north - no clue what was going on in the market - can you shed some light as to what "advice" you were given that you ignored??

We were told by both sets of our parents to wait another five years. This was back around 1999. And it was even a pretty decent market back then. We got lucky and sold for a small profit (after fees) about 3 years later. We thought we would be there for 10 years, but we didn't like the neighborhood or the area so we moved.

[MichiganMovesSouth]

By the way - how do you quote people in the shaded blue instead of this way????

I suppose this means I figured out how to quote in shaded blue, huh?

[Ann_Arbor]

Originally Posted by MichiganMovesSouth

I have to ask - why is buying in Canton a horrible investment? Canton has great schools (Plymouth/Canton schools) is close to places like Ann Arbor and Plymouth which both get good reviews on this forum and in other places.

I predict that suburbs are going be out of favor and lose to small and large cities when it comes to attracting college grads/ professionals. Canton, and suburbs like it, are going to suffer in the future- young home buyers aren't flocking to the suburbs like they once did, the housing stock and other development is generic and not build to last, crime and other ills of the city are moving outwards as cities are gentrifying, the infastructure and density is built for the car and not mass transit, and lastly, there is still more terrain to the west that can be built from scratch that will look better/ be more desirable than Canton in a few years. On top of it, Canton is directly related to the problems of Detroit and SE Michigan, which is also suffering from educated-people migration. I could go on and on, as other theorists/speculators could, but simply put, the future of the prototypical suburb, like Canton, isn't as predictable and safe is it once was.

It's great if you want to move there/ promote Canton if you think it's safe, has good schools and is convenient to big box stores; but to say it would be a good investment- I wouldn't bet on it.


--
^ I hope that wasn't too rantingly put, but I just wanted to be helpful and provide a different/marginally discussed angle.

I've never been to Chelsea, but nearby Dexter seems like really pleasant with recreational opportunities (Huron River), a small, active downtown and proximity to Ann Arbor.

[magellan]

Originally Posted by Ann_Arbor

I predict that suburbs are going be out of favor and lose to small and large cities when it comes to attracting college grads/ professionals. Canton, and suburbs like it, are going to suffer in the future- young home buyers aren't flocking to the suburbs like they once did, the housing stock and other development is generic and not build to last, crime and other ills of the city are moving outwards as cities are gentrifying, the infastructure and density is built for the car and not mass transit, and lastly, there is still more terrain to the west that can be built from scratch that will look better/ be more desirable than Canton in a few years. On top of it, Canton is directly related to the problems of Detroit and SE Michigan, which is also suffering from educated-people migration. I could go on and on, as other theorists/speculators could, but simply put, the future of the prototypical suburb, like Canton, isn't as predictable and safe is it once was.

It's great if you want to move there/ promote Canton if you think it's safe, has good schools and is convenient to big box stores; but to say it would be a good investment- I wouldn't bet on it.


--
^ I hope that wasn't too rantingly put, but I just wanted to be helpful and provide a different/marginally discussed angle.

I've never been to Chelsea, but nearby Dexter seems like really pleasant with recreational opportunities (Huron River), a small, active downtown and proximity to Ann Arbor.

Plus those b*stards in Canton turned all the intersections on Ford Rd near Ikea into "no turn on red" intersections, yet they placed the signs about 30 yards before the intersection. So you're at the traffic light, trying to turn right at the stoplight, don't really know the area that well if you're visiting, and have no idea whether you can turn on red or not. No sign that says "no turn on red" ahead of you or above you next to the traffic light (like most places in Normalville, Michigan), so you proceed. They then pull you over and give you a ticket for "impeading traffic", no points but $200 later. Pure money making machine, and the judges never know the police department and traffic department have gamed the system. What a joke.

Canton gets a no vote from me too. And Ann_Arbor is right. The outlying exurbs like Canton are going to be replaced by more new ones in Livingston County, and Canton will fall out of favor.

[snoopygirlmi]

Have you considered how much commuting is going to cost you?

Extra gas/miles on the car(s). Then, the spouse that travels the farthest is always tired and cranky because their day is super-long because of prep time/drive time/traffic...everything starts revolving around work/going to work/just wanting to rest after work...

After awhile, you won't want to live like that.

We finally moved closer to my husband's work because his commute cost him 2/hours a day - more if traffic was horrible. We finally decided to move after he ended up getting a hotel room near work during a bad snow storm because traffic wasn't moving and it wouldn't be worth the drive home just to turn around and go back out the next day. Now we live 10 minutes from his work/school and the quality of life we have is so much better

Also, I don't agree with the idea that suburbs are going to fall out of favor. Look at Ferndale/Royal Oak. They just put up a high scale mall in Clinton Township. Also, we are in the midwest - once you get out of the city - you need a car to get anywhere the bus doesn't go.

Also, when you think about having kids - would one of you be a stay at home? My DH and I decided way before we ever had kids that I would stay home with the kids in the early years, so we focused on building his career so he/we could afford for me to stay at home.

Also, are you the type of people who like to travel around or can really see yourselves living in the same house forever? Is being close to family important?

When you have the answers to the lifestyle questions, then you can figure out where or if to move - and if so, rent or buy.

These are just things for you to consider.

[Ann_Arbor]

^ You are right about the first-ring suburbs of Ferndale and Royal Oak- but they resemble the city (Detroit) more, at least, in its better days. They also act as the region's de-facto city in many ways- they have lively downtowns, unique homes/shops/neighborhoods and are home to many of the areas young professionals.

-
I was referring to Detroit's exurbs- the further out suburbs that are carving farm fields into large scale shopping and office plazas, big-box stores and developer friendly subdivisions full of taupe colored vinyl homes, e.g. Canton and Clinton Township.