  Cocoabee Member Username: Cocoabee Post Number: 9 Registered: 03-2008 |
Has Detroit and metro home prices hit bottom? Do you think this is the worst it is going to get? Can it get any worse? With investors supposedly "flocking" to Detroit and "shoveling up diamonds" Do you think it's safe to respond "fools rush in"? Personally, on a national level, I think its going to get much worse. You? | ||
Rid0617 Member Username: Rid0617 Post Number: 18 Registered: 03-2008 |
I believe on a national level it will get much worse because too many people have been living beyond their means courtesy of credit. Then there are people who are in bad shape through no fault of their own. My mother lives in Florida and says they are foreclosing homes right and left. I question the investors who are buying blocks of homes, I can see how Detroit will recover by people like me who are poverty level looking for the opportunity to own a paid for home. Us poor folks may not bring much money but will spend money in Detroit. | ||
Cocoabee Member Username: Cocoabee Post Number: 10 Registered: 03-2008 |
I cancelled my 401k today. Just can't afford it anymore. I'm NOT going to charge up my credit cards. How can they keep telling us to save for retirement through IRA's and 401k's when it cost $30 bucks for two cans beefaroni, 1 loaf bread, 1 gal milk, 2 pounds 80% hamburg, two day old pies. and then $45. at the gas pump? Whats happened to Detroit will play out the same in other US cities. | ||
Nainrouge Member Username: Nainrouge Post Number: 1318 Registered: 05-2006 |
I think that it will get worse. People seem to be holding on to their houses hoping that they will make the sale instead of coming down in price. Eventually, many will probably be forced to sell. I am not an expert in the field, however, I am just basing this on my personal observations. | ||
Mrsjdaniels Member Username: Mrsjdaniels Post Number: 786 Registered: 08-2005 |
I think one more year - i wouldnt be surprised if you can buy a crib for 5K at an auction | ||
Bobj Member Username: Bobj Post Number: 4317 Registered: 11-2003 |
Couple thoughts - A non scientific view, my friend, a real estate agent, told me last weekend that the buyer activity in her office has shot through the roof in the last month or so compared to the last couple of years. She said they had 5 walk ins, in one day, looking for an agent to show them houses. They haven't had a single walk in during the last year. All the agents in her office are reporting many more buyers than they have had in the last year or so. They believe that people waiting in the wings are starting to think that if this is not the bottom, it is close enough to swoop in and get a deal. Personally, my wife and I are moving to the Canton/Plymouth/Northville area due to a corporate relo. We have been looking for a year off and on. The prices in that area have dropped at least 20% from 18 months ago. But, houses we looked at and were considering have been snapped up. We have decided it is time for us to do the same. We are making an offer today on a house. | ||
Cocoabee Member Username: Cocoabee Post Number: 11 Registered: 03-2008 |
The American Dream by Cocoabee Noticed that my house needs a paint job, she's got psoriasis. One of the shutters is missing as it flew off in a windstorm. The heat doesn't work upstairs (it let go in February I have a nice electric blanket). The sink still isn't hooked up upstairs. Bumper cover missing on my car as I pocketed the insurance $$ after the elderly lady hit me last winter and used it to pay my heating bill. (I think the insurance co screwed up and sent it to me instead of the bank oh well). Zillow says I owe more than my house is worth. My next door neighbors are in foreclosure, but have two nice new Cadillacs and a beautiful swimming pool. Found out today I have a 752 FICO score. $66k in available credit compliments of Visa Master and Amex. Zero revolving, I tease those bastards as I never give them a nickel in finance charges. Although its tempting. $8k left to pay on my ugly car. I've got two cans of beefaroni and a day old pie to look forward to. Today, I guess I am doing ok. I saw Detroit firsthand not too long ago. I predict this will happen here too. | ||
Iheartthed Member Username: Iheartthed Post Number: 2947 Registered: 04-2006 |
I think Detroit is in a bad place right now that will probably get worse. There is too much real estate couple with too many people leaving and not being replaced. | ||
Livernoisyard Member Username: Livernoisyard Post Number: 5719 Registered: 10-2004 |
There's probably enough houses in current inventory to last for four or five years to bring down to a low enough level to justify building more. That means that the construction, mortgage, and real estate industries will be negative/flat until around 2012/2013 or later. | ||
Sknutson Member Username: Sknutson Post Number: 1101 Registered: 03-2004 |
Cocoabee: Pie? Sounds like a luxury item to me. | ||
Thnk2mch Member Username: Thnk2mch Post Number: 1143 Registered: 02-2006 |
Pie is absolutely a necessity. | ||
Cocoabee Member Username: Cocoabee Post Number: 12 Registered: 03-2008 |
yes, but it was day old pie. half price. you know they put a big black mark through the bar code. | ||
Charlottepaul Member Username: Charlottepaul Post Number: 2429 Registered: 10-2006 |
My thought is that Detroit could be one of the first to rebound as it was one of the first to hit a slump with the economy. Similarly I think that this housing issue hasn't even reached peak down here in Charlotte. Currently Charlotte is one of the brightest spots in terms of housing. That has attracted quite a bit of new development and builders. Therefore, it is likely that the housing market will be overbuilt here, and that that may not be realised for several more years, leading to a collapse. | ||
Livernoisyard Member Username: Livernoisyard Post Number: 5722 Registered: 10-2004 |
quote:Apparently, you seem to view Detroit as being a trendsetter, instead of being very weak and, thus, being more susceptible to adverse conditions. Based on the weakness assumption, Detroit should lag the national economy during recovery. | ||
Kevgoblu Member Username: Kevgoblu Post Number: 75 Registered: 02-2007 |
Our problem is exacerbated by the fact that in addition to the forclosures we have hoards of people losing their jobs or taking buyouts. I heard the peak of the mortgage re-adjustments should occur in May or June (nationally). OK... 100 people have their mortgage adjust in June to a level they can't afford and lose thier house several months later. In July, only 90 people experience this phenomenon. Its still 90 more homes on the market in a region thats economic base is contracting. Short of some miraculous economic turnaround, I couldn't see the Detroit market bottoming out for at least another couple years. Just my opinion. | ||
Ray1936 Member Username: Ray1936 Post Number: 2954 Registered: 01-2005 |
I suspect you ain't seen NOTHIN' yet. And the Fed Chief says we MAY be heading for a Recession. Talk about a guy with his head up his ass. We're IN a serious recession, and quickly heading for a depression. My thoughts. | ||
Ladyinabag Member Username: Ladyinabag Post Number: 542 Registered: 03-2007 |
Not yet. You think that it's bad now? Wait until John McCain gets into office. (Message edited by Ladyinabag on April 03, 2008) | ||
Livernoisyard Member Username: Livernoisyard Post Number: 5725 Registered: 10-2004 |
Ray1936, you seem to redefining the economic concept of a recession... How could the economy be in recession if the previous quarter still had positive growth? Well, it can't because it's not possible, as any economist would know. However, Detroit has been in an economic depression for a few years already, but few mention that. The term recession keeps being used, but it's possible to be in recession and in a depression at the same time. Those supporters who keep gushing at how nice Detroit looks and such never mention that Detroit is indeed in a depression. But Ray, the US economy is not now in a recession, although a few quarters from now, it very well may be. | ||
Nainrouge Member Username: Nainrouge Post Number: 1329 Registered: 05-2006 |
Bobj, Welcome to the neighborhood. I know that my neighbor in Plymouth is desperate to sell, so you should be able to find some deals here. | ||
Titancub Member Username: Titancub Post Number: 113 Registered: 08-2006 |
Sadly, the bottom is not yet here. Subprime and credit market fallout hasn't completely worked itself out yet. And as pointed out, metro Detroit economics otherwise are not favorable. | ||
Cocoabee Member Username: Cocoabee Post Number: 13 Registered: 03-2008 |
Is it correct to assume Detroit has fallen into a full blown depression like the nation did in the 20's and 30's? Seems like it to me with all of the vacant commercial buildings and homes, and has other posters have pointed out that more home foreclosures are eminent. This is exactly what my grandparents spoke of..This is exactly why they were so friggen' cheap. (Message edited by cocoabee on April 03, 2008) | ||
Zrx_doug Member Username: Zrx_doug Post Number: 83 Registered: 03-2008 |
I'm of the opinion that we've got another year on the skids before we hit bottom..and that we're gonna sit on the bottom for a while before things turn upwards. We'll have to wait for the rest of the nation to drop to our level before a rising trend can start, you see.. All of which is completely unscientific..just a gut feeling. FWIW, to the guy shopping for a home in Northville, my sister's got a very nice place out there that's been listed for going on two years and has dropped over forty grand on the asking price. For my sis's sake I hope I'm wrong about the market not bottoming yet, but that gut feeling won't go away.. And now I have this craving for pie.. | ||
Nainrouge Member Username: Nainrouge Post Number: 1344 Registered: 05-2006 |
quote: In Detroit? You can now. Maybe not in the best condition: http://www.waynecounty.com/WCA uctions/Auction/ | ||
Kevgoblu Member Username: Kevgoblu Post Number: 76 Registered: 02-2007 |
The declining regional population is an important piece. Between the retirees leaving and the working age seeking greener pastures, we are continuing to see a net decline in residents. If people were staying here, but just facing dire financial times they would still need a place to stay. I would imagine the city would see an upswing in residency as displaced people looked for affordable housing. Bringing new industry to the region is absolutely vital to the possibility of a revival and stabilization of the housing market in the area. | ||
Mwilbert Member Username: Mwilbert Post Number: 172 Registered: 11-2007 |
"How could the economy be in recession if the previous quarter still had positive growth? " All the statistics are subject to revision, but just because you weren't in a recession in one quarter doesn't mean you can't be in a recession the next--if that were true a recession could never start. It might be true that you wouldn't be sure you in a recession yet--the NBER doesn't usually date a recession until 6-9 months after it starts, because it takes that long for all the data to show up. However, we already know that per-capita real GDP started falling last year, and that unemployment claims have risen substantially. We also know that real GDI is falling. In all probability, we entered a recession in December, but maybe not. We probably won't be sure when (or less likely, if) the recession started until sometime in the summer. And I doubt the housing market has bottomed. | ||
Livernoisyard Member Username: Livernoisyard Post Number: 5730 Registered: 10-2004 |
It's not very likely that two past quarters would be revised that much to turn a small positive growth for both of them into the red, although it might have were the unrevised growth closer to being flat. However, certain industries are in recession (or worse). The Tiers reportedly went into recession near Q1 1998 and had never rebounded. So, for the automotive sector, there's a clear depression where some 6000 or more Tier companies since either merged or disappeared as going concerns. | ||
Iheartthed Member Username: Iheartthed Post Number: 2949 Registered: 04-2006 |
A NY Times article featuring a Detroit resident trying to sell his house. Unsold Homes Tie Down Would-Be Transplants | ||
Sirrealone Member Username: Sirrealone Post Number: 123 Registered: 01-2007 |
Our state is ripe to see a turnaround or stabilization, but I fear that might not occur. I'll start with why it is ripe. Because prices here didn't 'run up' to the degree that they did in most other parts of the country. They rose, yes, but basically at a steady climb, not with the leaps and bounds that they did in other parts of the country. Yet the percentage drops were dramatic, outpacing the national average. So, that means that we're eventually going to be considered 'affordable'. That's the upside. Now, the downside, and what I'm afraid of is this. In order for what I said to work, we need people to fill those houses. And the only way we get people is by adding jobs. Our biggest problem right now is that we have a clueless governor and legislation that do not seem interested in trying to make our state attractive to businesses. They're more concerned with.....I'm not sure, but it sure isn't trying to keep jobs and add new ones, that much is obvious. The way they solved the budget 'crisis' last year was to....raise taxes on business. Brilliant. People need to elect politicians in this state that are focused on bringing in new business to Michigan. I don't care if they're Republican or Democrat, it doesn't matter at this point. Those that represent us must be focused on attracting new business to this state. Business as usual is killing us, and that's all we're getting out of our elected officials, in Lansing and in Washington. | ||
Dsmith Member Username: Dsmith Post Number: 161 Registered: 07-2005 |
We'll be near a bottom when rental rates make residential RE a wise investment. We're getting closer on the very low end of the market, while the median and 75th percentile areas still have a way to go. www.housingtracker.net Remember the macro (Federal Reserve induced) easy money bubble that fueled RE prices on the upside generally raise prices across the board. We didn't really participate on the upside based on local issues but we definitely have seen and will continue to see the pain associated with the downside. | ||
Iheartthed Member Username: Iheartthed Post Number: 2950 Registered: 04-2006 |
^Wow, Detroit is the lowest priced market on that list. It also has the third highest inventory, only exceeded by Miami and Atlanta. Detroit is in trouble! | ||
Dabirch Member Username: Dabirch Post Number: 2535 Registered: 06-2004 |
quote: Actually, we will not know if we are now in a recession until the future. Your statement shows that we were not in a recession 2 quarters ago - but lends nothing for or against the argument that we are in recession at the moment. | ||
Iheartthed Member Username: Iheartthed Post Number: 2951 Registered: 04-2006 |
We couldn't possibly know whether or not the U.S. economy is in a recession yet. The definition of a recession is two consecutive quarters of negative growth. The economy grew positively (albeit minimally) in the fourth quarter of 2007. The 1st quarter of 2008 just ended on Monday and the forecasts are that GDP growth will be flat at best. If the official growth estimates of Q1 show a decline when they are released at the end of the month, then this will only be the first quarter of negative economic growth. We won't know if this is truly a recession until at least July. That said, I'd be very surprised if the first quarter did not show a decline. | ||
Screamingfit Member Username: Screamingfit Post Number: 42 Registered: 03-2006 |
From a friend who works in the county offices, for the first time in recorded history last year showed the most residents leaving Oakland County. Sort of grim as I remember the last exodus in the early 80's and thought THAT was bad. Did a local move last week and had problems getting a hold of a moving truck. From all the proprietors I spoke to, they are finding it impossible to keep trucks as all of them are one way, out of state with popular destinations being Virginia, Montana, Arizona and North Carolina. The writing has been on the wall for awhile now, you just needed to piece things together and be as pessimistic as I am. I don't expect a recession - I'm waiting for this country to explode all over itself and China to pick up the pieces. I'd say now would be a good time to learn how to be self-sustainable and purchase a few guns. | ||
Mwilbert Member Username: Mwilbert Post Number: 173 Registered: 11-2007 |
Lots of people believe a recession is defined as two consecutive quarters of negative growth, but that isn't correct. This is from the NBER website. NBER is the group that officially dates recessions: Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dating procedure? A:: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. According to current data for 2001, the present recession falls into the general pattern, with three consecutive quarters of decline. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in economic activity." Second, we use a broader array of indicators than just real GDP. One reason for this is that the GDP data are subject to considerable revision. Third, we use monthly indicators to arrive at a monthly chronology. | ||
Dabirch Member Username: Dabirch Post Number: 2536 Registered: 06-2004 |
Brilliant insight there Iheartthed. I wish I had said that. Oh wait, I did. | ||
Iheartthed Member Username: Iheartthed Post Number: 2958 Registered: 04-2006 |
quote: Do you want me to bake you a cookie? You didn't explain why these recession calls are premature. That is why I commented. | ||
Iheartthed Member Username: Iheartthed Post Number: 2959 Registered: 04-2006 |
quote: The take away point is that "recession" is a term erroneously used to describe the current state of the economy. Instead, the term recession should be used to describe a phase of the economy. It should be used in the past tense. We all know that the economy right now is not as good as it has been in recent years. Whether we are currently in a "recession" or not does not change that fact. The national economy is in an economic slowdown. | ||
Cocoabee Member Username: Cocoabee Post Number: 15 Registered: 03-2008 |
I think the true barometer of determining how our economy is doing is observing Main street, not Wall street. Consumers simply aren't spending. I was fortunate, and considered myself to have been well heeled over the past few years, now as a small business owner. My heels are worn down, and almost worn through, so to speak. I've cut my personal and business spending to the bone. Although I really never lived or pretended to live the high life, I'm watching all that I had managed to save over the past few years is slipping through my fingers. Things that I took for granted, as going out to dinner once or twice a week are out. I used to think nothing of running my car through the car wash, not any more. Dry cleaning? no more. I couldn't tell you the last time that I went to the movies, which was quite frequent at one time. I even chopped down my cable TV to basic, sorry HBO and Showtime. I also would never would find myself buying dented cans and day old bakery items at the grocery store. According to most of you folks, you seem to also believe that its gonna get worse. | ||
Gazhekwe Member Username: Gazhekwe Post Number: 1837 Registered: 08-2007 |
If you just isolate Michigan from the US, we have had more than three quarters of decline. The US as a whole might not be in a defined recession, but Michigan is. I saw an article recently that defined several states as being in recession, including California, Nevada, Arizona and Michigan. I will see if I can find the article and post the cite. | ||
Gazhekwe Member Username: Gazhekwe Post Number: 1838 Registered: 08-2007 |
Here it is, citing two U of AZ economists: Arizona is among five states in the nation either in recession or on the verge of it, Vest said. The others are Michigan, California, Florida and Nevada, he said. For most, the primary cause was likely a boom and bust in the housing market with heavy speculation and prolific use of risky mortgages, he said. [Marshall Vest, director of the Eller College of Management's Economic and Business Research Center] http://www.azstarnet.com/sn/me tro/215346.php | ||
Barnesfoto Member Username: Barnesfoto Post Number: 4939 Registered: 10-2003 |
Maricopa, Arizona: The End of Exurbia/The Boomtown Mirage http://www.nytimes.com/2008/04 /06/realestate/keymagazine/406 ariz-t.html?ref=keymagazine | ||
Iheartthed Member Username: Iheartthed Post Number: 2961 Registered: 04-2006 |
quote: Oh yeah, that is without question. Michigan might actually be in a depression. | ||
3rdworldcity Member Username: 3rdworldcity Post Number: 1080 Registered: 01-2005 |
Has the local housing market hit bottom? Based on quite a bit of real estate experience, I can unequivocally say "I have no idea." Are we in a recession? MI is. Except for 2 or 3 states, I think the whole country is. Maybe not "technically" according to the economists, but I think people who rely on economists to explain the obvious are the same kind of people who look out the window and see that's it's raining, but don't really believe it until the TV weatherman tells them it is. | ||
Warrenite84 Member Username: Warrenite84 Post Number: 292 Registered: 01-2007 |
Although this is a little off topic, why does the governor give tax breaks to select incoming businesses instead of lowering every businesses' taxes? Wouldn't lower taxes for all businesses make the state more attractive to do business in? You've probably heard this before: Businesses will come where invited and stay where it feels welcome. | ||
Mwilbert Member Username: Mwilbert Post Number: 179 Registered: 11-2007 |
There is a lot of controversy about how to use taxes to attract business, but I have seen two major arguments for targeted tax breaks. One is that you can get critical mass for a particular industry--for instance if you give tax breaks to the film industry, you may get enough films being made that ancillary businesses like catering and lighting will be established. The other is that you are trying to attract "strategic" industries that you think have a good future and for some reason you think would be a good fit for your state. For instance, Michigan might target wind turbine manufacture. Obviously, you can make a much more significant tax concession to a specific business or group of businesses than you can to businesses in general, which is why states very often do offer targeted tax breaks if they are interested in a particular business or class of business. (Message edited by mwilbert on April 05, 2008) | ||
Livernoisyard Member Username: Livernoisyard Post Number: 5775 Registered: 10-2004 |
The major problem for Detroit to attract any industry or even a single firm is to convince the decision makers that Detroit is a good fit for them--considering all its negatives. Just wanting business won't cut it because there will be dozens of other Rust Belt cities (and clean cities) wanting those very same firms to locate in those cities also. And industry probably won't locate in any large cities. Those Japanese auto plants south of here have largely avoided large communities. Other firms just might do likewise. Detroit really has little to offer. | ||
Mwilbert Member Username: Mwilbert Post Number: 181 Registered: 11-2007 |
One thing that Detroit can offer that other cities can't is very large tracts of conveniently located land. Of course if a company doesn't want to locate in a city at all, then they aren't going to want to locate in Detroit either. I don't so much care whether Detroit can attract industries or not, although that would be nice, but whether the region and to a lesser extent the state can attract them. Detroit provides services to people throughout the region, and workers from Detroit can get jobs elsewhere in the region if there aren't appropriate ones available in the city, but if the region doesn't have jobs, neither of those things is going to work very well. The city of Detroit has many problems, but with competent leadership those problems may be soluble, or at least tractable, if the region is doing well. If the region is failing, Detroit proper has little hope of improvement. | ||
Mikeg Member Username: Mikeg Post Number: 1559 Registered: 12-2005 |
If the mortgage lenders in this region start walking away from their foreclosed properties, it could be a long, long time before the local housing market rebounds: Consider this troubling question: Do mortgage lenders have any obligation to take over a property that has defaulted on its mortgage? |
