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Old 06-07-2017, 05:56 AM
 
Location: Back in the Mitten. Formerly NC
3,819 posts, read 5,465,919 times
Reputation: 5266

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Quote:
Originally Posted by zthatzmanz28 View Post
We bought our first home for $108,000 in 2003. That was a 1600 sq ft cape cod in Redford.

Looking at this article there is no way we could buy into an entry level home at $140K...and we make over $50K a year...

How does a couple making less than $15 an hour afford a $140K home????
You can get a mortgage for that, with 3% down as long as your credit is good (and other debts don't mess up the debt to income ratio). For me personally, the budget would be too tight for my comfort. I learned my lesson.

In 2007, I was approved for $150K with 0 down. I made $30,000. I took out $113,000 and that was tight. Something needed an expensive repair, it went on a credit card, I couldn't afford the credit card payment along with my other bills, so hello part time job. I spent the next 6 years working 25-30 hours retail on top of teaching. I can't even imagine what would have happen had I taken out $150K I played it smart this time- my mortgage is only 114% of last year's income.
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Old 06-07-2017, 06:49 AM
 
Location: Metro Detroit
1,786 posts, read 1,933,206 times
Reputation: 3554
Yeahhh, but in 2007 one could get approved for a $450,000 jumbo ARM on paying interest only, if they had a pulse and a bank account... so that's probably not a great example.

That being said, $140,000 is not an unrealistic price for a home in a middle class neighborhood. Run that number by anyone in the west or the northeast and they'll about hit the floor with shock at how affordable that is. If you're putting $15k down you're looking at a payment of about $600 a month, with a 4% interest rate. Throw in taxes and insurance and you're at what? $900? $1000? That's less than rent on a 2 bedroom place for most.

Regarding no homes in Ferndale, there are currently 23 homes for sale between $100,000 and $200,000, according to Zillow. There's even a decent looking 2 BR one for $116,000 that has been on the market for over 100 days. That's an extreme example and I have no idea what's wrong with it, but don't tell me there are no homes to be bought. More realistically there are a number of nice 3 bedroom ones that have been on the market for 4-5 weeks, some have even seen price drops, but for the most part homes are under contract within 2-3 weeks. That's... a healthy housing market... the idea that the sky is falling because people can sell their homes so therefore we need more planned developments in Milford is nothing but real estate developer propaganda.
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Old 06-07-2017, 07:09 AM
 
979 posts, read 1,117,715 times
Reputation: 1099
And in Milford the residents are fighting back and challenging the fly-by-night developers trying to push in high-density residential developments in areas that were zoned as rural residential.

If you went back 7-8 years ago, no one could sell their house in the inner-ring suburbs without taking a significant loss.

I'm not sure I buy all this hysteria about a sellers market across the board, in my parents neighborhood in Troy, plenty of $350-400k houses that hit the market in May are still sitting out there for sale and price-dropping.
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Old 06-07-2017, 08:05 AM
 
Location: Chicago
939 posts, read 844,314 times
Reputation: 1102
A dual-income family should be able to easily afford a home pushing $200,000 provided both make over $30,000 and they can put down their 3% for an FHA loan. A good rule is to triple your household gross income, meaning that a family where both income earners makes around $15 an hour could afford up to $180,000.
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Old 06-07-2017, 08:38 AM
 
3,004 posts, read 3,150,776 times
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The above article focused on Michigan, generally, and mentioned Metro Detroit, but not the City itself. I'm not totally familiar with the Detroit market. Despite the progress of increasing downtown rentals with the extensive office building retrofits as well as rehabs and some new apt/townhome building in University/New Center area, obviously there's still tons of residential decay and empty lots in many close-in neighborhoods with many existing structures too far gone to try and rehab/rebuild. What's the local banking posture toward new construction lending? I know even over here in Cleveland, where despite some similar decay in a number of Cleveland neighborhoods there is a somewhat more robust situation, bank lending for large-scale new construction is a tough sell, even though there are a number of projects downtown and in certain spot "hot" neighborhoods, like Ohio City, Tremont and University Circle. Are there echoes of this in Detroit?
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Old 06-07-2017, 11:06 AM
 
12,825 posts, read 20,829,605 times
Reputation: 10936
Quote:
Originally Posted by Arthur Digby Sellers View Post
Did you read the article? There is a serious shortage of entry level homes, and young buyers are completely priced out of the market. That's a problem. I sold an entry level investment property recently and had 17 offers in one day -- all significantly over asking price. While it was wonderful for me, there are buyers who normally wouldn't have a problem buying a home who are being crowded out of the market.
SE Michigan's obsession with new (typical huge, cookie cutter, inappropriate for Millennial starters) homes, out at the edge of the galaxy, is coming home to roost.
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Old 06-07-2017, 11:10 AM
 
12,825 posts, read 20,829,605 times
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Quote:
Originally Posted by Geo-Aggie View Post
Is this a joke? A serious shortage of entry level homes? Pretty much every single neighborhood south of 14 Mile and East of 275 is primarily made up of what most would call entry level homes. You have 1,000 square foot homes selling all over towns like Warren and Westland for prices in the range of $120,000-$150,000. You even have some rather desirable cities, with solid schools, like Clawson and Berkley which are made up almost entirely of entry level homes that are affordable off of one college-graduate's salary.

What is this article even going on about?

The reality is that Detroit is an established Metro of 4.5 million people with a stable population neither growing or shrinking and a forecast for decades of the same. Unless we want to further overdevelop the exurbs (Please, no!) there is no reason for large-scale construction in Metro Detroit beyond the teardown-rebuilds we're seeing so many of in our nicer inner-ring suburbs. Some infill will pop up, but the idea that we need massive exurban developments in Wixom and New Baltimore is entirely unreasonable. This isn't Los Angeles, and I'd estimate most of us are thankful for that. If anything the area would benefit from redevelopment of Detroit and the inner-ring burbs only. Let's stop spreading the population further and further toward Livingston and Lapeer counties, eh?
If anything, SE MI is already too much like the LA of a couple or three decades ago, before density increased. And, SE MI would do well to follow in the footsteps of LA in terms of pursuing close in developments instead of sprawl upon sprawl.

Last edited by BayAreaHillbilly; 06-07-2017 at 11:22 AM..
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Old 06-07-2017, 11:15 AM
 
12 posts, read 12,473 times
Reputation: 41
What do you think this will do to property values in "less desirable" inner-ring suburbs like Oak Park & Hazel Park? I bought a starter home in Oak Park in May 2016 for $88k and I've already had inquiries about whether I'm willing to sell. So, it seems like this seller's market and lack of inventory will bode well for communities like mine.
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Old 06-07-2017, 11:18 AM
 
12,825 posts, read 20,829,605 times
Reputation: 10936
Quote:
Originally Posted by jaynarie View Post
If you have been looking for a house recently, you know the market is tight. Really tight.

I have a co-worker who has been looking at houses in Hazel Park for about a year. She has bid on a couple dozen and went under contract twice. Both appraisals came back lower than her bid and the sellers won't budge. She doesn't have the cash to cover the difference, so she keeps losing out. The sellers are getting over asking and usually within a day or two of listing. One day she was excited because her realtor knew about a house that hadn't went live on the MLS yet. She ran into people coming and leaving who were looking at it. The sellers had multiple offers before it hit the MLS.

I recently purchased. I wanted to move back to my hometown (Flint suburb) but gave up after a few months. I kept my budget low because I want to own free and clear in under 10 years. Anyway, in 2015, per CD, the average home price in my hometown was $115K. There are about 32,000 residents. When I looked a couple weeks ago (to see if I should have waited) there were 19 active listings under $150K. Of the 19, six are in very poor shape and aren't eligible for financing. So that leaves your typical family with 13 houses to choose from. And 5 of the 13 are condos. So a whopping 8 single family homes. It was annoying as a buyer, but I'm glad values are heading back up. In the 90s, you couldn't touch a single family home for $115k.
Hazeltucky has arrived. The Hipsters have discovered it!

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Old 06-07-2017, 11:21 AM
 
12,825 posts, read 20,829,605 times
Reputation: 10936
Quote:
Originally Posted by MetroMetro View Post
What do you think this will do to property values in "less desirable" inner-ring suburbs like Oak Park & Hazel Park? I bought a starter home in Oak Park in May 2016 for $88k and I've already had inquiries about whether I'm willing to sell. So, it seems like this seller's market and lack of inventory will bode well for communities like mine.
See upthread. Hazel Park has been discovered. I have to reckon Oak Park is similar. Next .... Southfield?

Or even ... R.O. Township?
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