  Iheartthed Member Username: Iheartthed Post Number: 1472 Registered: 04-2006 |
Retail may be booming but housing is not... NEW YORK -- U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index in 1987, the research group said today. Detroit led the cities with the biggest price declines, with an 11 percent drop from June of last year. Other cities with falling prices included Tampa, Fla., San Diego and Washington, D.C., which all recorded drops of at least 7 percent. The decline in home prices around the nation shows no evidence of a market recovery anytime soon, one of the architects of the index said. Read the rest here: http://detnews.com/apps/pbcs.d ll/article?AID=/20070828/UPDAT E/708280408 | ||
Charlottepaul Member Username: Charlottepaul Post Number: 1551 Registered: 10-2006 |
"Seattle and Charlotte, N.C., were on the small list of cities that saw prices rise in the same period. Seattle prices rose 8 percent in June while Charlotte saw a 6.8 percent increase." It's really too bad that growth is occurring in places like Charlotte, when there is such a supply of homes already existing in other more established parts of the country like Detroit. I guess that is just the American way. Rape one area and then move to the next. | ||
Thejesus Member Username: Thejesus Post Number: 1962 Registered: 06-2006 |
nice...this was inevitable to anyone who has been paying attention to these ridiculously inflated home prices for the past 5 years or so... The sooner they come back to earth the sooner our economy will regain stability and we'll be able to move on.. | ||
Iheartthed Member Username: Iheartthed Post Number: 1479 Registered: 04-2006 |
^Yeah, but... Detroit metro has/had one of the cheapest, most "affordable" markets in the country, yet percentage wise, took the biggest fall. Seattle on the other hand is a fairly expensive market, yet they actually posted a rise in overall value. | ||
Novine Member Username: Novine Post Number: 74 Registered: 07-2007 |
Complete speculation but you have to wonder how the lack of mass transit fits into that picture. In NYC, DC, San Francisco, Portland and Seattle, you don't need a two-car household to function. Even in the burbs you can often get by with a single car or no car at all. All that money that Detroiters flush down the gas tank in transportation costs is money you can't spend on housing. | ||
Ccbatson Member Username: Ccbatson Post Number: 2825 Registered: 11-2006 |
A larger percentage of a smaller total amount translates to less dollars. | ||
Danny Member Username: Danny Post Number: 6414 Registered: 02-2004 |
If the media report this unreal estate social problems, the people MUST do something about it. Otherwise let it die. But we're human beings most of us never give up. | ||
Iheartthed Member Username: Iheartthed Post Number: 1480 Registered: 04-2006 |
A larger percentage of a smaller total amount translates to less dollars. Not necessarily. But anyway, that's beside the point because Detroit's property values are still near the bottom of the barrel. | ||
Iheartthed Member Username: Iheartthed Post Number: 1481 Registered: 04-2006 |
Complete speculation but you have to wonder how the lack of mass transit fits into that picture. In NYC, DC, San Francisco, Portland and Seattle, you don't need a two-car household to function. Even in the burbs you can often get by with a single car or no car at all. All that money that Detroiters flush down the gas tank in transportation costs is money you can't spend on housing. I speculate this as well. On top of that, if you look at areas with good transit systems, property values of a given area tend to be inversely proportional to the distance to the nearest transit station (i.e. the further you are from the station, the less your property is worth). | ||
Mrsjdaniels Member Username: Mrsjdaniels Post Number: 232 Registered: 08-2005 |
hence the reason I am moving to Charlotte...anyone want a house in OP? | ||
Accraghana Member Username: Accraghana Post Number: 70 Registered: 07-2007 |
Let’s keep in mind that some Metro areas regulate development in order to control urban sprawl. Thus, the constrained ability of developers to build further and further out away from existing infrastructure reduces supply relative to demand. As anyone who has had economics 101 knows, when supply is reduced relative to demand…..value or prices increase. Hence, I am pretty sure that Portland and Seattle both have regional bodies that attempt to control sprawl which bids up property values when there is healthy demand. I think the rise in value in places like Atlanta and Dallas, which are the epitome of urban sprawl with no restrictions, is due to strong population growth which might be outpacing the growth of housing units…..which leads to higher prices. Detroit has been experiencing a lot of sprawl development the last 20 years in far flung exurbia. Now that the areas economy is hard hit and the population growth of the region is likely negative, demanding for housing is very low relative to supply and hence the large price drop. | ||
Detroitplanner Member Username: Detroitplanner Post Number: 1389 Registered: 04-2006 |
I don't think transit has much of a relationship. Boston is showing poor numbers too (according to the article). Phoenix, while not mentioned, is sprawl king. Even much of Chicago's metro is poorly serviced by transit with a lot more (in terms of numbers) of people commuting by car every day to many more edge cities (Think Troy, Southfield) than we have in Metro Detroit. I have to say it all lies in supply vs demand. Places with less stable economies are losing folks and they are moving to more stable places. | ||
Bucho Member Username: Bucho Post Number: 345 Registered: 01-2004 |
Seattle is not to far behind... www.seattlebubble.com | ||
Iheartthed Member Username: Iheartthed Post Number: 1487 Registered: 04-2006 |
I don't think transit has much of a relationship. Boston is showing poor numbers too (according to the article). Phoenix, while not mentioned, is sprawl king. Even much of Chicago's metro is poorly serviced by transit with a lot more (in terms of numbers) of people commuting by car every day to many more edge cities (Think Troy, Southfield) than we have in Metro Detroit. But the truth of it is that even after Boston has taken such a hit, property there on average still has a much higher value than Detroit. I don't think anyone is saying that the transportation is being factored directly into the average property value of a metropolis, but the high value of property along transit lines seems to be playing a major factor. | ||
Gazhekwe Member Username: Gazhekwe Post Number: 215 Registered: 08-2007 |
The sprawl idea has some merit. Everyone likes new and fashionable. People love going somewhere "first" and getting "the best" so when new developments open, that marketing plays on this. At one time, Southfield was THE place to go, but soon was supplanted by Northville, then Novi, then Wixom. On the east side is no different, look at Macomb County. | ||
Vas Member Username: Vas Post Number: 786 Registered: 01-2004 |
Well this isn't the reason why we wanted people to remain in the Detroit area. | ||
Rooms222 Member Username: Rooms222 Post Number: 21 Registered: 04-2005 |
I think this theory may hold some truth: http://www.usnews.com/blogs/ba rone/2007/1/18/net-internal-mi gration.html?s_cid=rss:barone: net-internal-migration The last two charts are most important in this long blog. Detroit is suffering because it is suffering a big out migration of current residents from the metro area without any flow of immigrants coming to replace them. Thus, a drop in housing prices because there are fewer people to buy the houses. Boston also shows a large net outmigration and San Diego, surprisingly also shows a small one.... He had an article explaining his theory that there were four kinds of metro areas now that I will try to find. Detroit was the rarest type (like Buffalo and Cleveland- no internal or external in-migration of people).... (Message edited by rooms222 on August 29, 2007) | ||
Rooms222 Member Username: Rooms222 Post Number: 22 Registered: 04-2005 |
Here is the other article (an opinion piece from the maligned WSJ... Wow, look at the first and last paragraph, in 60 years we have gone from the fifth biggest metro to the twelveth: http://www.opinionjournal.com/ editorial/feature.html?id=1100 10045 What about the old Rust Belt, which suffered so in the 1980s? The six metro areas here--Detroit, Pittsburgh, Cleveland, Milwaukee, Buffalo, Rochester--have lost population since 2000. Their domestic outflow of 4% has been only partially offset by an immigrant inflow of 1%. If the outflow seems smaller than in the 1980s, it's because so many young people have already left. (Message edited by rooms222 on August 29, 2007) (Message edited by rooms222 on August 29, 2007) | ||
Ccbatson Member Username: Ccbatson Post Number: 2826 Registered: 11-2006 |
If you are a potential buyer, affordable housing is welcome news | ||
Quozl Member Username: Quozl Post Number: 1359 Registered: 07-2005 |
^^^ Really? I never knew that, thanks for enlightening me bats. | ||
Oleosis007 Member Username: Oleosis007 Post Number: 5 Registered: 08-2007 |
The recent drop in housing prices across the country have been nothing but a rebound form the over inflation of home prices brought about by the economic boom of the 90's. Think about how many people you know that were flipping houses between 1996 and 2003. These flips were a result of cheap/easy and "creative financing". Loans were given to people that could not afford these loans. While this looked good for the mortgage companies at the time it resulted in mass foreclosures and bankruptcies. Today those foreclosures are driving down costs of all homes because of a massive surplus. The people that owned a 175k house 2 years ago now are living with their parents/sibligs/on the streets. These people should have never been allowed to buy a home in the first god damn place because they could not afford it. Fortunatly the market is in the process of resetting itself. Eventually our real estate market will get itself under control and you'd better bet that the financiers that survive through this depression will have learned their lessons. Underwriters are there for a reason and have thier rules for a reason. Responsble lending is the key to the stability of the US housing market. I hope we have learned our lesson. | ||
Ccbatson Member Username: Ccbatson Post Number: 2868 Registered: 11-2006 |
Rather than being all doom and gloom...Seriously though, if you have been smart, fiscally conservative, didn't borrow against your house heavily, all of this mess should not bother you in the least (it hasn't me). If anything, it may be a positive for future purchases. | ||
Catman_dude Member Username: Catman_dude Post Number: 204 Registered: 03-2006 |
What pisses me off is that the "cost" of building your own home is whatever the market value of the houses in the area is, rather that the sum of the materials and labor plus a modest markup. For instance, my brother had a 3,000 square foot house built in 2000 here in Norfolk VA area for $170,000. That same house would now "cost" around $400,000!! I know that inflation of the cost of materials and labor has gone up but no way has it gone up 235% in 7 years!! Market values have gone up that much, yes! But cost of materials and labor has nowhere near gone up that much and those contractors are making a killing on the difference! | ||
Ray1936 Member Username: Ray1936 Post Number: 1858 Registered: 01-2005 |
"But cost of materials and labor has nowhere near gone up that much and those contractors are making a killing on the difference!" Dude, you're overlooking the three factors that determine real estate prices.....location, location, and location. If you want to build a house in the middle of a garbage dump, yeah, the price will be the cost of materials and labor, period. If you want to build that same house with water access on Upper Straits Lake, well, check your bank account first. | ||
Catman_dude Member Username: Catman_dude Post Number: 205 Registered: 03-2006 |
I understand, Ray, about location....for houses already built. BUT if I am going to build a house, and I bought the waterfront lot years ago, I should not have to pay $450,000 for materials, labor and contractor's markup only costing $170,000, even if the market value of surrounding properties are $600,000 plus. That is what I'm seeing around here in Virginia. |
