Michigan real estate....WHOA!

[HardDrive]

Talk about RE losses.....

I was poking around on zillow.com today, and decided to punch in my dads house. Holy schnitzel! The house has lost half its value! 3 years ago the place was worth $600k. Now zillow says it would go for $295k. I called my dad to ask if this was true, and he just sighed and said yes. He told me it was even worse in other areas.

I'm just blow away. They live in a really nice section of Ann Arbor.

Brutal.

[Porsche-O-Phile]

"But this time's different".



The declines are just getting started too. Hang onto your hats people.

[Sonic dB]

Sold and got the heck out of there in 02. Even then the market was starting
to dip and it took 7 months to sell my house.

[Chocaholic]

Lakefront property has been a relatively safe-haven through the market fall. We bailed on our suburban house 3 years ago and moved into our lakehouse which has appreciated between 12 and 20% every year we've owned it. I'm no genius though. It was a personal decision...had nothing to do with the market. Just got lucky.

Want to know how stupid I really am? ISRG went public a few years ago at $13/share (robotic surgery). I worked for a supplier of theirs and knew the company well. I decided not to risk an investment in them. Their stock hit $330/share this week and still running up. Unbelieveable. But I digress...

[Dixie]

The house has lost half its value!

I doubt the taxes got cut in half.

[legion]

Look what houses go for in the UP. Check out Mass City or Ontanagon...

[lendaddy]

Originally Posted by Porsche-O-Phile

"But this time's different".



The declines are just getting started too. Hang onto your hats people.

Your normal glee over falling real estate prices doesn't really fit in Michigan, we never had a bubble...or even a run up. This is just people taking it in the ass, not greedy hogs getting slaughtered.

You can buy homes here for less than you could ten years ago...

[lendaddy]

I'll give you another example. A good friends father (also a friend) built a beautiful 4,500 sq ft home about 12 years ago. He had five kids combined with his new wife and it was not a financial stretch for him. The land was only $70k and he spent another $500k on the house itself.

He would sell it today for $380k.

[legion]

Can't you get a house in Detroit from something like $2,000? (You have to put up with the crack whores and pimps, but hey.)

[legion]

Michigan is like the Japan of the U.S. economy.

It has been in a mild recession (that has gotten more severe recently) for over a decade. RE prices were in line with the rest of the country 10 years ago and they have declined in MI while the rest of the country went up.

The RE boom missed Michigan.

[CurtEgerer]

Len and Legion are exactly right. This is totally different from the rest of the country. We've been in a single-state recession for 6 years +. There were NEVER any profits being made by rising house prices in Michigan. Real estate has been a horrible investment here for years. I wish I were renting my home.

I've got agents telling me the opposite: you should buy, people are giving houses and buildings away! That would be good advice in an area subject to normal economic cycles and with a future. There is no future and no plan from the clowns in Lansing. There's a simple reason they're giving real estate away: nobody wants it. Why would I?

[Wickd89]

We all need to ride out the cycles.
I love how all the non-home owners feel they are the smart ones during these times...

When I bought my current home in 2004, I got it for 89K below the 2003 high. That gave me a buffer for most thing (but not everything of course). The value of the house rose past the original asking price and then some. It has since dropped about 60-70K but still ~2-to 30K above the purchase price...

Fun ride but a home should only be part of your portfolio.

Has anyone tried energy stocks in the past few years!!!
With crude at $90 this was a no brainer. Question is when to get out...

[targa911S]

It will be time to BUY soon, if not already.

[kach22i]

Originally Posted by CurtEgerer

Len and Legion are exactly right. This is totally different from the rest of the country. We've been in a single-state recession for 6 years +. There were NEVER any profits being made by rising house prices in Michigan. Real estate has been a horrible investment here for years. I wish I were renting my home.

We've been in a single-state recession for 6 years +.

I keep reading this phrase, where is it coming from?

The bottom droped out 2-years ago, real hard and sudden - like a rock.

Before that it was pretty good, some rumblings though I have to admit.

Our real estate market has fallen for different reasons than the rest of the country.......... correct, correct, correct.

[lendaddy]

Originally Posted by kach22i

We've been in a single-state recession for 6 years +.

I keep reading this phrase, where is it coming from?

The bottom droped out 2-years ago, real hard and sudden - like a rock.

Before that it was pretty good, some rumblings though I have to admit.

Our real estate market has fallen for different reasons than the rest of the country.......... correct, correct, correct.

In manufacturing it has sucked for a decade.

But I think we may be coming out of it soon since Granholm raised taxes on individuals and businesses..................................wait that might not work

[sammyg2]

I'm surprised at how much variation there is by region. zillow says my house hasn't dropped that much, here's the graph from about when I bought it: (dark blue line is my home)

[GDSOB]

My parents have done well on lake property on Lake Charlevoix. They sold their original waterfront cabin and bought 10 acres on the lake, built a house and stayed about 10 years. They sold in '04 for almost 4M and bought another 1 ac lake lot for rehab, bought a nice house on 5 ac in Cave Creek AZ for winters, and have plenty left over. The nice areas do retain more value, but values peaked a couple of years ago.

[CurtEgerer]

>>>I doubt the taxes got cut in half.<<<

Correct. By law, our real estate taxes can only go up - either 5% per year or the cost-of-living index, whichever is less. Doesn't matter if the value of your house drops to zero - you still get a tax increase

Garth - Charlevoix is pretty much known as 'Chicago Money' and falls outside of the pattern.

[sammyg2]

wicked98 posted:

Has anyone tried energy stocks in the past few years!!

I've dabbled a bit