A sellers market is now a "near-crisis". (Detroit: sale, real estate)

[Geo-Aggie]

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?

[zthatzmanz28]

#140,000 is entry level>>??

[mjlo]

Originally Posted by Geo-Aggie

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 article addresses the crisis in the state as a whole, not just SE Michigan. I can't speak to the housing market in Metro Detroit, but I can tell you it's very real out here in the Grand Rapids area. Rental vacancies are at lows that lead the nation, and most houses turn around on the market within a couple days. We've been discussing the need for more home builders and skilled trades since about 2012. Construction jobs lead the job market in growth. There's got to be something to it.

[Arthur Digby Sellers]

Originally Posted by Geo-Aggie

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?

Yes, and 99% of those homes are not on the market. There are far more buyers than available home inventory. Hence a shortage and bidding wars. That's how a market works.

But I'm sure a young family getting priced out of a small home would appreciate your hipster lecture that they're evil for wanting to own their own home wherever suits their fancy.

[Jomz]

I knid of agree with this. A friends' house in Sterling heights - with a completely trashed yard and needed repairs was listed for 190k and sold for 205k last week.

House is off dequindre in Sterling heights.

[DTWflyer]

Here's my take on the matter:

The National Homebuilders Association is an advocacy group that is pro-new home construction. Their members all gain financial benefits from the home builder-develop-realtor industrial military complex.

Right now with land use policies, land prices, labor costs, material costs, current lending practices, and the threshold for a return on investment/profit margin for all stakeholders it is not economically feasible to build new-construction for first time home buyers. It most areas it is impossible to build a house and sell it for under $300k, if not $400-500k.

A decade ago, with free and loose lending practices, first time home buyers could buy houses in this price range, but a lot got burned for this during the downturn.

I read this article as a platform to attempt to address the issues that are causing home builders to be unable to build homes that target one of the bigger opportunities of first-time home buyers, primarily millennials coming of age.

The NHBA is advocating for changes in land use policies, increased people going into the trades to change demand-supply equation for labor that impacts costs, and trying to alarm municipal governments of a crisis that doesn't appear to exist.

There are a lot of houses in inner-ring suburbs that regularly turn-over. Yes they go off the market fast. I can't tell if perhaps some first-time home buyers have unrealistic expectations. Unless dual-income white collar couples, you really aren't in the market for a new construction. Are people afraid of maintaining an existing home?
To say there is a shortage of supply and a looming crisis, seems a bit premature, especially considering the amount of boomers who are going to retire, age-out of their homes, or relocate over the next decade.

[jaynarie]

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.

[Geo-Aggie]

Originally Posted by zthatzmanz28

#140,000 is entry level>>??

Yes. In fact I bought my first house, in 2013, for $180,000. It was a 1,000 sq.ft. ranch in a working class suburb. Welcome to a world run by banks, investors, and shady sales professionals

Originally Posted by Arthur Digby Sellers

Yes, and 99% of those homes are not on the market. There are far more buyers than available home inventory. Hence a shortage and bidding wars. That's how a market works.

But I'm sure a young family getting priced out of a small home would appreciate your hipster lecture that they're evil for wanting to own their own home wherever suits their fancy.

It's interesting how often I get called a hipster on here. I'm starting to believe hipster is code word for "I disagree with you." I'm really quite a terrible hipster.

My family and I just bought a house this winter in an inner-ring suburb. No doubt that there is competition, but when we made a strong offer with a 10% down payment we were under contract within 24 hours. Also, there are a myriad of decent homes for sale that aren't selling right away. If one is looking seriously they can find a home. The best ones may end up being bid on, but is this not a good thing?

[brodie734]

Anecdotally, I have three co-workers looking right now. They all have had their expectations shift from Ferndale (always unrealistic) to Livonia and beyond and still aren't finding any luck. When you are struggling to get into Woodhaven, you know there are issues.

[zthatzmanz28]

Originally Posted by zthatzmanz28

#140,000 is entry level>>??

Originally Posted by Geo-Aggie

Yes. In fact I bought my first house, in 2013, for $180,000. It was a 1,000 sq.ft. ranch in a working class suburb. Welcome to a world run by banks, investors, and shady sales professionals



snipped

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????