SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Residential Real Estate Crash Index
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Ramsey Su who wrote (60160)8/18/2006 9:59:29 AM
From: orkriousRead Replies (11) of 306849
 
Michigan, not surprising, is already at melt down phase.

You're right about that. From the front lines:

Mrs. Ork is a RE agent (or was - she has no business - it's a good thing we don't need the money). She's 49 and has been selling homes for 27 or 28 years. She's never seen anything remotely like this.

When we got married five years ago (8/01) I convinced her to sell her 3000 sq ft house to live in my 1700 sq ft condo. I convinced her we'd move into a nicer house once the RE bubble burst.

It was 4/02 when we finally dumped her house for $330k. It was the bottom after 9/11. She literally sold at the bottom. Her house had been valued in her 1993 divorce at $350k. (Everything here wasn't that bad. Her subdivision just wasn't a popular one.) I thought things would continue down and we'd soon be looking for a house in the neighborhood she'd always wanted to live in. In 2000 condos in my complex were going for $190k, which I thought was ridiculous. (I had paid $130k for it in 1991 and they were new and going for $150k in 1986.) You can clearly see Detroit didn't have a booming RE market like everywhere else.

Obviously, Greenspan delayed the unwinding of the bubble with the greatest bubble ever seen. When prices in my condo complex took off and surpassed $200,000 I told Mrs. Ork "this is insane." Two years ago condos in here were selling for $240k-$260k.

Fast forward to today. There are 14 condos for sale in my complex. Not one has sold this year. People are desperate. Units that people paid $240k for a few years ago are asking $219k. Someone who paid $225k just lowered their asking price to $199k.

RE is like that all over Detroit. Houses have been on the market for two years and many listings are back to 2001 prices. I wouldn't say there are no closings. There are some. But they are few and far between. Virtually nothing is selling.

We're lucky. We don't need Mrs. Ork's income. I'm keeping my wedding promise and we've been shopping for houses. We're looking for a house on a lake, preferably under 3k sq ft since I don't want to pay to heat and cool the place. There isn't nearly as much lake front inventory as regular inventory, and I'm not going to buy one unless I can get something at prices that would have been seen in the late 1990's. However, there's no question if we're patient we'll get it. The way things are going here it wouldn't surprise me if the house we buy for $800k is worth $600k in a few years, but WTF am I gonna do, try to pick the bottom? Mrs. Ork bitched and yelled at me for years that I was wrong. Now I'm right and she's thinking maybe we should wait another year. We will if we can't find the right house at the right price. But I didn't think Greenie could bail out the market five years ago and I was wrong. Mrs. Ork has waited five years and now things are becoming unglued. It's time to keep my promise.

Thanks to our precious metals investments and the last year's Patronesque homie shorts, we'll most likely be going the no mortgage route. If I've learned anything over the last few years it's that debt sucks. Once we've found a new house I'll price my condo (which is paid for) $20k less than the cheapest one in here. No one else is gonna be able to undercut me Someone will buy it.

If it were up to me I'd leave this area. I'd buy a house in Charlevoix, MI (the upper part of the lower peninsula) and spend seven months there. I'd rent a place in FL or AZ the rest of the year. But Mrs. Ork has two grown recently married kids here and she doesn't want to be far from her future grandkids.

What's going to become of Detroit? It's in deep shit. I'll bet it's what most of the country looks like in another year or two.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News