Will home prices go up in the next 2-3 years in Metro Detroit? (Warren: real estate, foreclosures)

[Wolverine607]

I plan on buying a house somewhere in Metro Detroit in the next 2-3 years. I currently live with my parents and am not ready yet to move out, but likely will be in the next 2-3 years sometime once I get a slightly higher paying and more stable job.

So my question is, what is the likelihood of home prices going up in the next 2-3 years in Metro Detroit? I plan on paying cash, so any rise in interest rates is no concern to me. The only thing that matters is prices.

I have done some research on this and have found many conflicting views, so I am not sure what to believe or think.

Some articles have indicated that prices may actually increase while some say things will be flat and some say things will fall.

Does anyone with expertise in real estate in this area have any predictions on where home prices are headed in the next 2-3 years in Metro Detroit?

Is there any significant chance of big price increases in the next 2-3 years.


Now here is some information on the type of home I will be looking to buy and my price range when the time comes when I move out.

*Price range: $100K to $130K

*900-1200 square foot brick home on a small lot in good condition

*Area doesn't have to be great, but is has to be safe and reasonable. Schools will not matter as I will be living on my own without children.

[porchpickup]

Do you want to buy a house so you can enjoy it, or are you buying one so you can sell it when you leave thus saving money that would have been spent on rent?

Because it might be a good idea to consider NOT buying a house as a form of investment.

[us66]

We're at or near the price floor. I don't know if prices will go up in two years' time. The places where people actually want to be (GP, Bhm, Roch, Ply, N'ville) I think are at bottom and a GP Realtor told me demand was rising there, but places nobody cares about where prices are at throwaway housing levels (Roseville, Eastpointe, south Warren) aren't going to get any more desirable. I actually kind of hope they don't. My tax assessment sinks like a stone every year and my taxes are hundreds of dollars less a year because of it.

[RingWalk]

I doubt it. SE MI is inextricably tied to the auto industry, period. Even though it's doing better now, the movement is still in exporting jobs. Michigan in general hemorraghes young people. And from what I've heard the housing market took such an incredible hit in the recession that it's not going to be a six month bounce back, year bounce back.

Many educated people feel the recession was not just a recession but a more substantial readjustment of the American economy.

Maybe they'll go up a little but I don't think we'll get back to 2007 rates of growth, etc., for decades.

[Wolverine607]

Originally Posted by porchpickup

Do you want to buy a house so you can enjoy it, or are you buying one so you can sell it when you leave thus saving money that would have been spent on rent?

Because it might be a good idea to consider NOT buying a house as a form of investment.

No, I DO NOT want to buy a house as an investment so I can count on appreciation to make money. In fact, I hate rising home prices as I think they make housing less affordable for people.

I view a home as a place to live in, and not as an investment to make money. Having said that, here is the reason I am asking this question.

I currently live with my parents. I am not yet ready to move out, but will likely be in 2-3 years. When I move out, I plan to buy a house for cash so I have a place of my own I can live in. Currently I have about $102,000 saved up (mostly in cash with some stock and bond mutual funds), so I barely have enough to pay cash for a small starter home at current market prices. I will have more saved up after the next 2-3 years though.


Basically, the reason I am asking this question is I want to ensure that my money I have is able to buy the the same quality or size of house in 2-3 years that it can now. Another words, I do not my money to lose purchasing power in relation to home prices.

If home prices are flat and do not go up, there is not a problem at all.

However if they do go up, then my money would lose purchasing power in relation to home values which would not be good.

If there is a threat of home prices going up, then I would need to find some type of investment so my money could keep up with home prices so it would not lose purchasing power in relation to home values between now and the time when I am ready to buy a house. Do you think it is necessary to look into it, or is it unlikely that home prices will go up at all in the next 2-3 years here in Metro Detroit?

Thanks for an advice.

[RingWalk]

LOL. If you have $100K in the bank you'll be fine. I assume you have a job with that kind of savings. You will in all likelihood qualify for a very good interest rate mortgage.

You sound a tad neurotic. In any event, I don't think you have to worry about housing prices skyrocketing over the next two years.

I don't know why you want to buy your house outright with cash, but you are not going to be able to get much of a house for that amount of money.

[SadieMirsade]

Sit on your cash, and study the market movement. Watch out for deals and gentrification.
Watch out for urban pockets experiencing renewal.

If you find a deal, buy it and rent it out.
Continue living at your parents' as long as you can, and keep stashing your $$$ while it's coming your way.
I know I sound very European, but there's nothing wrong with getting rich while living in your parents' basement.
In the end, you'll be able to provide for them AND for your own family.
And, at the end of the day you'll have a house AND savings.

[MaryleeII]

Originally Posted by Wolverine607

I plan on buying a house somewhere in Metro Detroit in the next 2-3 years. I currently live with my parents and am not ready yet to move out, but likely will be in the next 2-3 years sometime once I get a slightly higher paying and more stable job.

So my question is, what is the likelihood of home prices going up in the next 2-3 years in Metro Detroit? I plan on paying cash, so any rise in interest rates is no concern to me. The only thing that matters is prices.

I have done some research on this and have found many conflicting views, so I am not sure what to believe or think.

Some articles have indicated that prices may actually increase while some say things will be flat and some say things will fall.

Does anyone with expertise in real estate in this area have any predictions on where home prices are headed in the next 2-3 years in Metro Detroit?

Is there any significant chance of big price increases in the next 2-3 years.


Now here is some information on the type of home I will be looking to buy and my price range when the time comes when I move out.

*Price range: $100K to $130K

*900-1200 square foot brick home on a small lot in good condition

*Area doesn't have to be great, but is has to be safe and reasonable. Schools will not matter as I will be living on my own without children.

Regardless of whether you have children or not, its always a good idea to consider the schools for your resale value.

[magellan]

Originally Posted by MaryleeII

Regardless of whether you have children or not, its always a good idea to consider the schools for your resale value.

Depends on what and where you're buying. A condo or townhouse? Schools probably don't matter as much.

To the OP, I think prices will hold steady. I don't foresee prices going up any time soon, as foreclosures will take at least 2 - 3 years to slow down and clear out. And it really depends a lot on what areas you're looking at.

[hiphopcr]

I bought a home last month and read as much as I could about the situation.

I believe 2-3 years from now home prices will not be any higher, and probably 25% lower. Don't listen to "we're at the bottom now" talk. Look back on these boards when people were saying that in 2008.

Home prices won't go up until employment does. For as many foreclosures are on the market now, there are another 5 million home in severe delinquency which will be hitting the market in the next two years. We're not anywhere near out of this.