Discuss Detroit Archives - Beginning January 2007 New housing market collapse Previous Next
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Mackinaw
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Username: Mackinaw

Post Number: 2833
Registered: 02-2005
Posted on Wednesday, May 30, 2007 - 10:25 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

...except for the laid-off construction workers, I'm not too angry about this:

http://www.detnews.com/apps/pb cs.dll/article?AID=/20070530/B IZ/705300406&theme=Biz-Metro-r eal-estate&imw=Y

http://www.detnews.com/apps/pb cs.dll/article?AID=/20070515/B IZ03/705150328
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Irish_mafia
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Username: Irish_mafia

Post Number: 910
Registered: 10-2003
Posted on Wednesday, May 30, 2007 - 10:31 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

I am.

The economic impact goes well beyond the laid off workers noted.

Nothing good about this.
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Fareastsider
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Username: Fareastsider

Post Number: 398
Registered: 08-2006
Posted on Wednesday, May 30, 2007 - 10:34 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

as Mackinaw said about the workers I agree, to bad we are going to not see as many of those architectural wonders built to the high pulte standards though!
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Danny
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Username: Danny

Post Number: 5945
Registered: 02-2004
Posted on Wednesday, May 30, 2007 - 10:35 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

It's time to auction off your home. You would be making more money than the real estate price.
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Mackinaw
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Username: Mackinaw

Post Number: 2834
Registered: 02-2005
Posted on Wednesday, May 30, 2007 - 10:49 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

For the Detroit area, this is good news. Gotta reel in the building of new structures. Investment in existing structures will strengthen the real estate market and help prices stabilize sooner, and of course this will be good because it means less sprawl.

I have never understood why new home building is placed so high on the list of indicators of a robust economy. I study economics and can think of many more important indicators. Furthermore, at a deeper level, I've never understood why building new houses is seen as a reflection of our well-being and success as a country.
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Professorscott
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Username: Professorscott

Post Number: 396
Registered: 12-2006
Posted on Wednesday, May 30, 2007 - 11:27 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Mackinaw,

Home building is an indicator of a locally robust economy because, in regions where sanity prevails, the building of houses means people are choosing to live in your region. (There aren't enough houses, so you have to build more.)

Here, for quite some time, the building of new houses has meant more people are abandoning older neighborhoods. But that's more of a metro Detroit thing than it is a phenomenon on Earth.

Prof
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Mikeg
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Username: Mikeg

Post Number: 899
Registered: 12-2005
Posted on Wednesday, May 30, 2007 - 11:43 pm: Edit PostDelete PostMove Post (Moderator/Admin Only)

Mackinaw, if I were your economics teacher, I would flunk you. Those who are not buying new housing in SE MI are not going to invest anywhere right now. They are sitting tight in their current place until they see whether they still have a job.

The founder of Pulte Homes is a descendant of Anton Pulte, who was an early German immigrant who came to Detroit from the Sauerland region of Westphalia. Anton was a prosperous grocer whose shop was originally located at Monroe and Farmer (circa 1869) and later on St. Aubin just south of Gratiot (circa 1884).

Anton Pulte


Pulte Grocery Ad
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Futurecity
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Username: Futurecity

Post Number: 541
Registered: 05-2005
Posted on Thursday, May 31, 2007 - 12:02 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Hard to feel any sympathy for the snake-oil peddlers of sprawl.

When gas hits five bucks a gallon next year, the poor chumps that bought those Pulte homes on 26 Mile Road will be selling them for fire wood.
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Lmichigan
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Username: Lmichigan

Post Number: 5554
Registered: 10-2003
Posted on Thursday, May 31, 2007 - 12:09 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

The market is finally correcting itself. Good. we've been largely playing a game of musical houses for years now, and it's great that the metro is being brought back down from its dream-world back to reality.
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Detourdetroit
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Username: Detourdetroit

Post Number: 307
Registered: 10-2003
Posted on Thursday, May 31, 2007 - 12:19 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

profscott, I understand what you're saying but it would be nice (as Mackinaw alludes) to have a sprawl index parlay into a region's economic health stats.
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Mackinaw
Member
Username: Mackinaw

Post Number: 2835
Registered: 02-2005
Posted on Thursday, May 31, 2007 - 12:59 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

"Those who are not buying new housing in SE MI are not going to invest anywhere right now. They are sitting tight in their current place until they see whether they still have a job."

ARE NOT GOING TO INVEST ANYWHERE?

No, allow me to flunk you, for you seem to be forgetting that people have choices. Are you suggesting that the only residential investment people can/should make is the purchase of a newly constructed home? Have you forgot that an equally important component of residential investment in GDP is the purchase and renovation of existing homes. My parents have never built a house, but you can't tell me that they have merely sat tight and not spent any money in the residential investment category of GDP. Building an addition and rebuilding a kitchen/finishing a basement is residential investment. Furthermore, they entertained the possibility of moving to a different house in the same city, but never did so. They looked into purchasing an existing home, yet, somehow, they never looked into purchasing something new in a subdivision. How can that be? Are there, perhaps, choices in this economy?

Detour, it would be nice to have a sprawl index. I think it should be based on population growth. If your population is growing to a level for which extant housing cannot handle the load (i.e. Detroit in the 1940s), then one should expect new house building. A reasonable amount of sprawl might be 2,000 new homes in a year if a county's population increases by 6,000 in a year, based on the typical density in terms of humans per house. So, if a region, like ours, is stagnant--no population growth, certainly no job growth (so less overall wealth)-- then how could the construction of thousands of new homes be warranted? Seems to me the only effect could be excess supply creation and thus a decline in region-wide home prices. Seems to me this is exactly what we've seen.
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Gannon
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Username: Gannon

Post Number: 9353
Registered: 12-2003
Posted on Thursday, May 31, 2007 - 1:01 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Really?

Pulte, et al, ONLY do their sprawlicious behavior in Michigan, huh? heh


I'd say new home construction is held in such high esteem because we are a disposable society...even down to our discarded, used property. Instead of a landfill, it is 'fill land' or houses in decay on their way back to farmland...if we're lucky.

PLUS, it shows the powers-that-be that we are properly performing sheepsumers...grabbing the most of what we can to impress our neighbors and friends.


Gotta live that American dream...and our generation's version of that dream always has to top our parents...even IF just for closet space and moving the porch out back where we can hide from our neighbors.


Now THAT is more an American phenomenon than anywhere else on Earth.
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Mackinaw
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Username: Mackinaw

Post Number: 2837
Registered: 02-2005
Posted on Thursday, May 31, 2007 - 1:11 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

^^Pretty much.
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Gistok
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Username: Gistok

Post Number: 4431
Registered: 08-2004
Posted on Thursday, May 31, 2007 - 1:51 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I know a lot of folks in the building trades (electricians, roofers, rough carpentry) who are temporarily relocating to elsewhere (such as Utah, Arizona and Nevada), while the wife and kids stay back in Michigan. This is so that they can pay the monthly mortgage on a house that they cannot otherwise sell because of the current market conditions here in Michigan.

This is causing a lot of people dispair. And I'm just talking about folks generally doing remodelling and home additions, not new home construction.
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Udmphikapbob
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Username: Udmphikapbob

Post Number: 352
Registered: 07-2004
Posted on Thursday, May 31, 2007 - 8:47 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Thanks, MikeG for the historical factoid - I worked for Pulte for two years, and didn't know that about his ancestry. Bill Pulte is a pretty good guy, and it's a good place to work - if you can get over that whole "selling your soul to the Sprawl Devil" thing.

I couldn't. My dream there was to ultimately head up a "Detroit Division", and take Pulte into the mid-rise market in the City. Don't think it's going to happen any time in the next 20 years though.
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Johnlodge
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Username: Johnlodge

Post Number: 500
Registered: 10-2003
Posted on Thursday, May 31, 2007 - 10:55 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

I heard recently on NPR that while new home sales are down, and to a lesser degree, existing home sales are down, home remodeling is up some 13%. I wish I could find a link to the story to get more exact details on it.

I think real estate needed a correction. Lots of bad bad choices going on all over that industry for some time. Too many young couples buying McMansions they can't afford as their first home because lenders tell them they can, overvalued properties, etc. Thats no good for anybody, and has to have a correction now and then just like the stock market does.

If this has the effect of people choosing to fix up their older homes rather than buying new homes at 26 Mile Rd, I say it's a good thing for this area specifically.
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Gannon
Member
Username: Gannon

Post Number: 9356
Registered: 12-2003
Posted on Thursday, May 31, 2007 - 11:00 am: Edit PostDelete PostMove Post (Moderator/Admin Only)

Good luck with that Udmphikabob, you should try selling them on returning to their roots...it would spin the company into a very different light for many of us (judgemental maniacs) here.


I include myself in that group, a little because of the sprawl thing...but mostly because of the quality problems that plagued so many of my customers in the early 90s when I was very active installing home entertainment systems in all these new suburbs.

Plus, a high school nemesis went to work for Pulte in land acquisition, so I didn't like the firm by association!

Cheers!

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