Profile picture for Wolverine607

Will home prices go up much in the next 2-3 years in the Metro Detroit area?

I currently live with my parents and plan on buying a house in the Metro Detroit area sometime in the next 2-3 years when I am ready to move out. I am currently not quite ready to move out yet as I do not have enough savings and do not have a good enough job to support myself yet, but will likely be ready in 2-3 years. This will be a house to live in that I can call my own place that I plan to have paid for when I move into it. I have no interest in buying and flipping properties to make money, but rather as a place I can call my own without having to pay rent or mortgage. In fact I hate rising home prices and believe it punishes people who want to save to pay cash for a house. My target price range is from $100K to $130K. I plan on paying cash for it as I hate any form of debt. The type of home I am looking to purchase is a small starter brick home from 900-1400 square feet in good condition in an ok to decent neighborhood built within the last 30 years. It does not have to be a great area, but cannot be a bad area either. Schools will not matter as I intend to live on my own and will not have children.

Now I ask this question because I want to plan my finances to ensure my existing savings (about $110K) do not lose any purchasing power in relation to home prices between now and when I am ready to buy a house in 2-3 years. So do you foresee significant price increases in the next 2-3 years in the Metro Detroit area. Or is it only very small increases like 1-3% per year or flat or even falling prices?

And I guess the most important part is being able to buy the kind of house I am looking for based on my description above for somewhere between $100K and $130K in 2-3 years from now. If home prices rise a little, but as long as they do not rise enough to prevent me from getting the type of home I want in the price range of $100K to $130K, I will be ok.
  • December 21 2011 - Rochester Hills
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (6)

Profile picture for Wolverine607
Ay updates to this question. I am looking to buy a home as I described in the original question probably sometime in the September to November 2013 time frame. That is only a little over 1 year away. Has anything changed between now and last December in which I would need to be worried about my price range?
  • July 08 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for blue screen exile
1) They bid up housing prices when the are listed substantially below market value to create "demand".  It is nothing new; it is a typically strategy in a FALLING market.  And the sold price is still the "market value".

2) Local Realtors always want to spin the stories to make themselves feel better and to try to drum up business.  That is nothing new either.

3) The government and the FED has been working very hard at creating "inflation".  They would like it to be about 2% to 3%.  They would even settle for 7% to 10%.  Certainly, looking at Chocolate one might believe even 12% annual inflation.  But the government is doing a very poor job of getting that inflation started.  Even if housing prices were increasing presently at 3% per year, it would only due to the devaluation of the dollar.  Certainly, the dollar has been devalued against some currencies, but the Chinese currency is linked to the U.S. Dollar, so no devaluation there.  And the Euro has devalued much faster than the dollar.

4) If one wants to see changes in the market demand or market values... use the local info tab at the top of the page.  Zillow doesn't offer an index trend in Detroit (due to insufficient public data for calculation, but how about this "sold price per sqft" chart?


Yes, the chart does indicate a slight uptick in recent months, but remember that has a much to do with "what" people are buying as anything else, and could just be statistical "noise".

How about this chart for % of ownership homes sold in a 12 month period?


Or this chart for "listing price per sqft":


Or this chart of Median List price?


Or this chart of median sold price?


Or this chart of sale to list price ratio?


All signs are that the market still has downward pressure, and is presently fairly flat.
  • December 21 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Wolverine607
Yes, I did ask this question again primarily because I worry a lot and I will admit I am kind of obsessive and compulsive about certain things.

But the real reason I asked it again is because this topic came up yesterday when I was getting my haircut. I basically assumed and felt comfortable that home prices were not going up at all in Metro Detroit until yesterday. One of the ladies who works there said home prices here in Metro Detroit were going up and said she knows a realtor and that there was a lot of demand and bidding on houses. She also said that she does not expect them to go up a lot and only appreciate like 3% per year.

Now 3% per year for only a couple of years is not much and not too concerning, but what concerns me is all of the different stories I;ve heard about this. Some say they are going down, some say they are flat and some say they are beginning to go up. And also the stories about a short supply of houses in Metro Detroit and why is that. Is there really a shortage, or is it just a backlog of foreclosures and shadow inventory of people who took their homes off the market because they are underwater and cannot afford to sell them right now. But those homes will eventually come onto the market putting any lid on potential significant price appreciation.

If home prices only went up like 1-3% a year, that is nothing. But what scares me is I have heard stories of people bidding on houses and whenever one hears the term bidding on something, I suppose that could raise the potential for significant price increases. Because if there were not going to be significant price increases, why would anyone have to bid on anything. Or is it just the nice starter homes in ok areas selling for way less than $100K that are so undervalued that are only having bidding wars on?
  • December 21 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for blue screen exile
I'm baffled about why you asked essentially the same question you asked in August again:

Will home prices go up in the next 2-3 years in the Metro Detroit

The market dynamics have not changed substantially, and there aren't any industries that seem to be anxious to take up all that prior manufacturing space.  As they say, no work, no demand for housing.  No demand, no increase in prices.

Now, if you had a way to bring in employment opportunities, you not only could make a killing on the business side with the mark-ups on all that labor, but could also make a killing on the residential retail side by buying before bringing in the jobs and selling as the jobs are filled at the higher prices with the increased demand.
  • December 21 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for the_country_hick
I would not worry about it. I would not expect to see higher house prices anytime soon in Detroit. Take a look at the article below and read some facts that point to even lower prices in the future. Massive vacancies only cause lower prices.

"
Name The City Where 28% Of Homes And 62% Of Businesses Are Vacant" (from January 2011)
http://www.businessinside ... es-2011-1

"Some cities probably won't ever recover.

That's the conclusion of a new study on vacancy rates, demographics, and market patterns by the Mortgage Bankers Association.

Namely, Detroit. "

  • December 21 2011
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

W- Your question has been on the board for over 40 hours. I guess no one whats to tell you that although property values in certain areas of MI are improving, overall you will see additional devaluation due to the many foreclosures that have not been put up for sale at present. The more available properties, the lower the pricing. REOs do not what to flood the market. Best wishes.

Happy funding, Rudi
  • December 21 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.