U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > U.S. Forums > Michigan > Detroit
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-12-2017, 08:18 PM
 
169 posts, read 131,366 times
Reputation: 150

Advertisements

Quote:
Originally Posted by intoodeep06 View Post
Maybe I can give some perspective here.

I know I can't rely on social security or the stock market.
The stock markets are at record highs. The only way anyone lost money in the stock market (assuming they were well diversified) during the recession was if they cashed out at the bottom. If they rode the wave, they experienced substantial gains.

Quote:
Originally Posted by intoodeep06 View Post
The smart millennial is looking to live cheaply and spending 30% of your income on something that is largely now understood to NOT be an asset is ridiculous.
To me, perpetually renting over the course of 60 years seems much more ridiculous. Rent increases consistently and never gets paid off. The current rent payment will likely quadruple over the course of 60 years. Fixed mortgages remain the same and can be paid off in 15-30 years. And you own an asset when it is paid off.
Reply With Quote Quick reply to this message

 
Old 07-13-2017, 08:32 AM
 
2,173 posts, read 2,816,354 times
Reputation: 2099
Quote:
Originally Posted by pojack View Post
The stock markets are at record highs. The only way anyone lost money in the stock market (assuming they were well diversified) during the recession was if they cashed out at the bottom. If they rode the wave, they experienced substantial gains.



To me, perpetually renting over the course of 60 years seems much more ridiculous. Rent increases consistently and never gets paid off. The current rent payment will likely quadruple over the course of 60 years. Fixed mortgages remain the same and can be paid off in 15-30 years. And you own an asset when it is paid off.
Don't forget the mortgage interest deduction.
Reply With Quote Quick reply to this message
 
Old 07-23-2017, 08:23 AM
 
142 posts, read 118,009 times
Reputation: 191
Its not a good thing to see a shortage of homes on the market. Never is a good problem to have except for the greedy ones who want to treat houses like ATMs instead of a place to live.

Society here in Metro Detroit would be so much better off with home prices at 2009-2011 levels but with interest rates at like 10% insted of the stupid low 3.7% or whatever.

That way the ones who want to save to pay cash for a home by living with their parents for a while can do so without stupid runaway home prices.

I was that person back in 2005 all the way through the end of 2012 and even the first 2 months of 2013. Especially from 2010 all the way through 2012 when I finally got a full time job and could put every penny away into the bank. And me and my brother inherited my Grandmother's house and she wanted it to go to us and we had sold it and split the money in Spring 2010. All experts thought there was no way I had to worry about home prices starting to rebound anytime soon and it would take at least 4 years for it to start happening. And they all seemed right going all the way through the end of 2011 a s I had a work from home job putting every penny away to add to the savings already from the sale of my Grandmother's house after she passed on to pay cash for my own house.

Then when the late Spring early Summer 2012 hit, there was news of prices rebounding and it practically made me panic and could never understand why Metro Detroit was so hot as a real estate market. Well I made it, but had to spend probably $20K more when I finally got my house paid for in cash in March 2013 as I pushed the date up as I could not take the news of prices rising and bididng wars any longer and had enough money even though I wanted some extra for a cusion in the bank, but just delat with less int he bank at the time and it worked out fine.

I have my home now paid for and do not have to worry and still got it well below peak level prices. But I pity for someone now who is in the same boat I was in who wants to save to pay cash for a house. Not only our home prices back to the peaks before the crash, in some if not many areas, they are higher than ever which is sad for those people. I know most people do not think like I did and have to pay cash, but still. Better to have that ability or at lest a smaller mortgage with much higher interest then a big mortgage with low interest that makes it harder to pay off faster.

Out of curiosity and of course we will never know, but had interest rates been at like 8 to 12% and stayed in that range since 2009 and were like that today, do you think home prices here in SE Michigan would still be at 2009-2011 levels? Or would they be higher but not as high as they are now? Or impossible to tell as greedy rich cash buyers would buy up inventory and drive up prices that way by turning them into rentals with increased money supply in the economy even though the average person never saw it but the rich people seemingly did?
Reply With Quote Quick reply to this message
 
Old 07-23-2017, 11:29 AM
 
142 posts, read 118,009 times
Reputation: 191
Quote:
To me, perpetually renting over the course of 60 years seems much more ridiculous. Rent increases consistently and never gets paid off. The current rent payment will likely quadruple over the course of 60 years. Fixed mortgages remain the same and can be paid off in 15-30 years. And you own an asset when it is paid off.
Well if you pay cash for a house or it had a mortgage and it is paid off, you are very close to owning it free and clear, but not quite because property taxes which never go away and always exist. And if you do not pay property taxes for a few years you can have your home foreclosed on by the county or local city government and lose it so you never truly own it the same way you own your car, your computer, couch or lawn mower etc... And before you mention you do not really own your car either because of the annual vehicle registration fee, that fee is only required to drive it on public roads which are state owned. If you anted to drive it on your own property you could do so forever without paying anything except maintenance and gas and still it could never be taken from you. I know that is pretty much useless unless you had a huge amount of land with a road, but still.

But yeah it is pretty close as property taxes are far less than rent or mortgage for the same dwelling unless you live in most parts of New Jersey or some parts of Pennsylvania or New York where property taxes are as bad as a mortgage or rent.
Reply With Quote Quick reply to this message
 
Old 07-24-2017, 07:33 AM
 
4 posts, read 3,193 times
Reputation: 14
my 2nd post on this forum called out this trend of rising prices back in October, you can go read it..

This rise in prices is a strong combination of : demographic demand growth (Millenials) + improving local economy (automotive) + inventory shortage (dearth of homebuilding after 2008) + prices adjusting to modern levels (finally passing ~2006 levels)

And I don't see it slowing down that much.
Reply With Quote Quick reply to this message
 
Old 07-24-2017, 08:26 AM
 
Location: Metro Detroit
1,786 posts, read 1,930,929 times
Reputation: 3554
Quote:
Originally Posted by mimoo30 View Post
my 2nd post on this forum called out this trend of rising prices back in October, you can go read it..

This rise in prices is a strong combination of : demographic demand growth (Millenials) + improving local economy (automotive) + inventory shortage (dearth of homebuilding after 2008) + prices adjusting to modern levels (finally passing ~2006 levels)

And I don't see it slowing down that much.
I agree that prices are not inflated, but rather reflect an increased demand with a limited supply in desirable areas, partially due to market trends shifting as many younger buyers are taking preference to established neighborhoods over new construction. I don't see prices rising at the absurd 10-15% YoY rates they have in the past few of years, but this isn't 2007 and I don't believe a massive 50% price drop is coming any time soon either. There simply aren't as many people selling as there are people settling down, and Metro Detroit isn't a major out-migration metro any longer. An automotive slow-down may impact this, but we should all hope the economy has diversified enough and the changes made by the Big 3 are significant enough to keep inevitable recessions minor.

I predict 2-3 more years of more modest price increases (~3-5% YoY) followed by a minor correction of maybe 5-10%. The mid-2000s were out of control when it came to market speculation and lack of lending regulation. This won't happen again in the immediate future.
Reply With Quote Quick reply to this message
 
Old 07-24-2017, 08:47 AM
 
979 posts, read 1,115,708 times
Reputation: 1089
Its interesting what I've seen though is that its really a much more split market that depends as much on location and on price-point.

Houses under $300k are where its really hot, basically getting offers within a day or two of listing, if in a reasonable area and in decent condition. Far more interested buyers than inventory.

Houses over $400k there seems to be sitting out there a bit longer, and are taking weeks and price-drops to sell. There isn't a ton of inventory but there aren't a ton of buyers in this range either. Also, it seems that once you get in this range you start to debate old vs. new built.
Reply With Quote Quick reply to this message
 
Old 07-24-2017, 08:51 AM
 
2,173 posts, read 2,816,354 times
Reputation: 2099
Quote:
Originally Posted by DTWflyer View Post
Its interesting what I've seen though is that its really a much more split market that depends as much on location and on price-point.

Houses under $300k are where its really hot, basically getting offers within a day or two of listing, if in a reasonable area and in decent condition. Far more interested buyers than inventory.

Houses over $400k there seems to be sitting out there a bit longer, and are taking weeks and price-drops to sell. There isn't a ton of inventory but there aren't a ton of buyers in this range either. Also, it seems that once you get in this range you start to debate old vs. new built.
I agree. I think the biggest part of the problem is that builders don't build houses in the sub-$400 category anymore. So if there aren't enough people selling houses in that range you have a massive shortage because there is no new supply coming on the market. I'm surprised there aren't any builders trying to take advantage of this. Are the margins on sub $400K homes that bad?
Reply With Quote Quick reply to this message
 
Old 07-24-2017, 08:52 AM
 
979 posts, read 1,115,708 times
Reputation: 1089
I'll add, I'm not so sure that there is a housing crisis as much as there is a "trades crisis".

It is impossible to get decent contractors these days to do any work. They are booked out MONTHS, let alone if you can actually get anyone to answer or return a phone call. On top of that most seem to be turning down the smaller jobs since they have full house renos, new construction, or really big projects.

I see this as a big problem looming with the aging housing stock around Metro Detroit and that younger people are no longer encouraged, no longer learning the trades and that so many either left the market or have aged-out of the business over the past decade.
Reply With Quote Quick reply to this message
 
Old 07-24-2017, 08:56 AM
 
979 posts, read 1,115,708 times
Reputation: 1089
Yes, the economics don't work in most cases for sub-$400K homes. You can find a few pockets of stuff around $350k, but only where land acquisition was cheap, the density is really high, the materials really cheap/low cost and without the bells & whistle. Labor and material prices have escalated significantly from the early-2000s.

The fixed-cost elements of many developments don't change whether its 100-$350k homes versus 75 - $500k homes.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Options
X
Data:
Loading data...
Based on 2000-2016 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Michigan > Detroit
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top