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Old 07-24-2017, 09:22 AM
 
Location: Metro Detroit
1,786 posts, read 1,938,995 times
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The only newer construction in this range is often in the form of townhomes, and some people don't really like townhomes. I don't mind them, but I couldn't sell my wife on one for anything. "I will NOT share a wall.. yada, yada, college apartments, blah, blah, private ownership.." and okay, yeah, those ARE valid concerns, but this is unfortunately where the market has gone. If you want new construction under 350k, you're probably looking at either a townhome in a desirable area, or a large SFH in a working class community like Warren or Westland. I wanted more walkable streets than provided there, so like many people in our demographic, we got outbid on small bungalows before one seller picked us because we, "didn't seem like you're going to tear it down".

For better or worse (mostly worse) the market is driven by where people can score a profit. As DTWFlyer pointed out, if you're buying a plot in a desirable community many of the costs are the same whether you build a 3,000 square foot luxury home or a 1,500 square foot entry-level home, so obviously the builder is going to build what nets the most profit. This is why 1920's Birmingham bungalows have nearly all been replaced with newer colonials and it's why Royal Oak and Berkley are undergoing similar transformations today. This creates added competition for the 200k homes from both entry-level buyers and prospective developers, and generally speaking, cash wins.

There is a solution to all of this. It simply requires a well-funded developer taking a risk on (Non-Downtown) Detroit neighborhoods and building a large development of modest SFHs. The land is practically free, the infrastructure is there, and I think if the development fit in nicely and were in an abandoned part of Detroit, near a stable location, (think Core City, Chaldean Town, or North Jefferson Chalmers) it would do quite well.
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Old 07-24-2017, 10:27 AM
 
2,173 posts, read 2,823,819 times
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Quote:
Originally Posted by DTWflyer View Post
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.
I agree with this, and I think the two go hand in hand. After all, skilled tradespeople provide the supply.

All of my skilled trades friends are working 6-7 days a week and making big bucks on side projects. It's extremely lucrative right now if you have the aptitude.
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Old 07-24-2017, 04:07 PM
 
1,686 posts, read 1,998,265 times
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Originally Posted by Wolverine607 View Post
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.
I have no idea what the point of this post is..... What does personal property have to do with real estate?
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Old 07-24-2017, 08:08 PM
 
169 posts, read 131,975 times
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Quote:
Originally Posted by Wolverine607 View Post
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.

Let's see. Paying rent for 60 years which will likely quadruple in those 60 years and not owning anything at the end of those 60 years... VS paying a mortgage for 15-30 years, owning the property while still paying $200-$300 per month in taxes.. and owning an asset which is likely to greatly increase in value over the course of 60 years depending on the area it's in, that can be sold for cash... I think everyone understands that taxes are guaranteed in life.
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Old 07-24-2017, 08:18 PM
 
169 posts, read 131,975 times
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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 100%. I could be wrong, but I think people are trending toward smaller homes and away from the 3000 SF Mcmansions. Just an observation I've seen with the smaller homes is that small 1200-1500 mid century ranches are super hot right now. It seems as though the large homes are sitting on the market for months while the smaller ones are selling, sometimes within days.
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Old 07-24-2017, 09:49 PM
 
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Well, take my opinion/observation for what its worth, but I see some interesting trends at play here.

The big $400k+ houses in Metro Detroit aren't really obtainable unless you have a high-income professionals, or dual-income professionals (medical, legal, business/executive, etc.)
For the average family in their late-20s to late 30's, a $400k+ house requires 2 solid incomes. I'm seeming that many of my peers where previously the mother may have had a full-time job, are leaving the workforce for part-time or to be a stay-at-home mom, unlike the previous generation. The cost of childcare are so high and with the fact that you have others raising your children, it seem that there has been an increase in a stay-at-home parent at least until the children are of school age. This directly impacts the size/price of house people are buying.

It seems that the rampant consumerism, biggest possible house, and dual-income household with kids in daycare are falling out of favor with the current thirtysomethings versus generations prior.
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Old 07-25-2017, 08:36 AM
 
153 posts, read 121,938 times
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I agree that prices will continue to increase given the circumstances. Is it a good thing. Heck no. But it is an unfortunate reality.

But I own a home now I intend to stay in forever so I no longer have to worry about it.

But man the ones looking to save to pay cash for a house must not ticked off and that is not good.
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Old 07-25-2017, 08:48 AM
 
2,173 posts, read 2,823,819 times
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Originally Posted by Wolverine607 View Post
I agree that prices will continue to increase given the circumstances. Is it a good thing. Heck no. But it is an unfortunate reality.

But I own a home now I intend to stay in forever so I no longer have to worry about it.

But man the ones looking to save to pay cash for a house must not ticked off and that is not good.
It's certainly a good thing if you own a home.
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