Will home prices go up in the next 2-3 years in Metro Detroit? (Warren: short sales, 2013)

[fmax]

Pontiac, Romulus and Grand Rapids going after casino business -

Proposal would add 8 casinos to Michigan lineup


"Among the locations that would get new casinos through the proposal are Detroit, Pontiac, Grand Rapids and Romulus."

From The Detroit News: Proposal would add 8 casinos to Michigan lineup | The Detroit News | detroitnews.com (http://www.detroitnews.com/article/20120403/BIZ/204030377#ixzz1qzQ6GFVp - broken link)

[animatedmartian]

Geez, why don't we just move Las Vegas to Michigan?

[us66]

Originally Posted by animatedmartian

Geez, why don't we just move Las Vegas to Michigan?

Las Vegas+Detroit=Atlantic City

Most of the appeal of Vegas in my mind is the desert. Take out the desert and add mid-latitude deciduous forest, and the place loses a lot of its muster. A large part of the Vegas mystique is the fact that the place is completely based on man's conquering of an uninviting land, from the pioneers' early settlement to the (somewhat) amazing metropolis it is today.

[gameguy56]

Let's get back on topic for a minute. What about Berkley? Royal Oak? Huntington Woods? Are forclosures hitting these areas hard?

[detshen]

Originally Posted by gameguy56

Let's get back on topic for a minute. What about Berkley? Royal Oak? Huntington Woods? Are forclosures hitting these areas hard?

Definitely not in Huntington Woods, the foreclosure rate is much lower than average, houses are keeping their value, and selling quickly for higher than average prices. I think Berkely is pretty good too, in Royal Oak it seems to depend on the area somewhat. In general Oakland county is in better shape than Wayne county

[Wolverine607]

I am the OP of this thread started a long time ago. And thanks to someone for bumping it up. I have kind of felt ok and been watching the market closely and am a little nervous, but was feeling relatively ok about prices not going up that much if at all the next 1.5 to 2 years until I read these articles dated TODAY!


Metro Detroit home prices jump 18.7% from March 2011 | Detroit Free Press | freep.com (http://www.freep.com/article/20120416/BUSINESS04/120416027/Metro-Detroit-home-sales-March - broken link)

Metro Detroit home prices jump 19% in March | MLive.com




It says that home prices have gone up 18 or so percent since March 2011 which is slightly over 1 year ago. That is scary and does that likely mean prices will continue to go up that fast year over year which would take me out of my $100K to $130K price range for a starter home in a decent neighborhood? Or is it a seasonal fluke due to a relatively warm winter compared to last year?

What is your opinions on the articles? Should I rush out and buy a starter house for $100K and rent it out so I can lock in the price and move into the house when the time comes I am ready to live in a place of my own while being rent or mortgage free? Or do you believe I don't have to sweat it as a future buyer and prices will not move much if at all in the next 2 years?

[animatedmartian]

Still hard to say.

The prices are likely related to the slow improvement in the economy. However, I suspect they may come back down within the near future. A lot of homes are still not selling because the prices are too high for most buyers with wages now being lower. People aren't getting loans to pay for a house that's $130K. So homes at that price range aren't really selling unless they dip closer to $120K or $110K.

Have you actually starting looking at any particular areas?

I've been seeing homes in Warren and Southfield for just under $100K that are in pretty good shape, although most of them did need a little bit of TLC (usually something like roofing or siding but nothing major). The ones closer and past $130K were homes that didn't really need any work but of course, as I mentioned above, they were too expensive for most people to get with today's wages.

[Wolverine607]

Originally Posted by animatedmartian

Still hard to say.

The prices are likely related to the slow improvement in the economy. However, I suspect they may come back down within the near future. A lot of homes are still not selling because the prices are too high for most buyers with wages now being lower. People aren't getting loans to pay for a house that's $130K. So homes at that price range aren't really selling unless they dip closer to $120K or $110K.

Have you actually starting looking at any particular areas?

I've been seeing homes in Warren and Southfield for just under $100K that are in pretty good shape, although most of them did need a little bit of TLC (usually something like roofing or siding but nothing major). The ones closer and past $130K were homes that didn't really need any work but of course, as I mentioned above, they were too expensive for most people to get with today's wages.

When did you see those homes in Warren and Southfield for those prices. Have you been seeing them within the last month or so? And also, yes I have been looking at particular areas. It seems as if Madison Heights and Warren are dirt cheap and you can possibly buy a nice home in move-in condition for like well under $100K in those areas. Although I do not know for sure, as I have just checked various relator sites and have not gone through a tour of the homes themselves. It seems as if Clarkston has been going up perhaps by a lot. It seems as if Troy and Rochester Hills are like 7% higher than 1 year ago (as of March 2011- March 2012), but about the same as were they were 2 years ago.

And also, you say that the prices of homes close to $130K were too high for most people to buy with today's wages. Are wages here in Metro Detroit much lower than they were back in like 1999-2004 in nominal dollar terms? Or is it just that home prices were super inflated back in 2001-2005 in Metro Detroit where it seemed you could not get any starter home in good shape in any ok/decent or better neighborhood for less than $170K which was an outrageously high price IMHO.

[animatedmartian]

Originally Posted by Wolverine607

When did you see those homes in Warren and Southfield for those prices. Have you been seeing them within the last month or so? And also, yes I have been looking at particular areas. It seems as if Madison Heights and Warren are dirt cheap and you can possibly buy a nice home in move-in condition for like well under $100K in those areas. Although I do not know for sure, as I have just checked various relator sites and have not gone through a tour of the homes themselves. It seems as if Clarkston has been going up perhaps by a lot. It seems as if Troy and Rochester Hills are like 7% higher than 1 year ago (as of March 2011- March 2012), but about the same as were they were 2 years ago.

Yep, within the last couple of months. Except lately, banks have started to want people to get pre-approvals before looking at a house, which doesn't make a whole lotta sense. So now I'm just limited to open houses.

I haven't looked in Troy, but in Sterling Heights the prices are still pretty high unless it's a house that needs a lot of fixing. I don't know why that is considering Sterling Heights isn't that different from Warren, at least north of 696.

Troy and Rochester I think will stay expensive as they're still pretty affluent for the most part and a lot of the housing is around 20 years old or less.

And also, you say that the prices of homes close to $130K were too high for most people to buy with today's wages. Are wages here in Metro Detroit much lower than they were back in like 1999-2004 in nominal dollar terms? Or is it just that home prices were super inflated back in 2001-2005 in Metro Detroit where it seemed you could not get any starter home in good shape in any ok/decent or better neighborhood for less than $170K which was an outrageously high price IMHO.

I think a little bit of both.

We moved into Sterling Heights in '04 and the price we bought it around that time was close to $200K. In 2010, new buyers bought the same house for $114K.

A lot of the car companies have reduced wages for new employees and have been slowly coming down on the current workers. When my parents worked for Chrysler, they were making close to $30/hour. Now, most people are lucky to be making $18/hour.

And it's not just the car companies, my mom changed over to becoming a cook and she current works at a hospital. Cooks in there have been saying that wages have fallen about the same rate as the car companies' wages. I forget the exact numbers, but I think most new cooks start out around $10/hour now? And it used to be closer to $15-$17/hour or something like that.

People are very lucky if they find a job that has similar pay rates to pre-2009.

[MIEng]

Sterling Heights is divided by two schools districs, so that may affect the price. I have not seen prices move that much for that last 2 years in my area ( North SH). My house I bought for 350k in 2006, identical houses has been selling for about 238k to 230k during the past 2 years, so I think prices are pretty stable right now.
Unless something catastrophic happens I don't see prices going down as much, but they are not going up either, not as long as MI unemployment stays high.
As I metioned in another thread my husband and I have been buying houses in the metro area for investment, and houses in the 50k and less range, if priced right, they are going fast. In the last two weeks we have lost two bids. I have seen houses selling within hours of been on the market, I'm not kidding. Thats why is so hard to find something dirt cheap that is move in ready, they go fast.