Buying in Bulk: Homes

Apparently, word has traveled about the situation in Detroit. The AP is now reporting the average home sale in Jan 2009 was 6,035. Though, to put it in prospective, in 2003 the average home sale was $46,702. But still, that's a pretty big drop.

Here is a snippet from the AP article:

"Welcome to Landlord Nation, where foreclosure notices are plentiful and for-sale signs offer at least 1,800 homes for under $10,000 that once were worth at least 10 times more.
In extreme cases, homes are on sale for $1 or less, which has enticed investors to Detroit from as far away as the United Kingdom and Australia.
"In the past few months, I've picked up 10 new clients from out of state that are buying in bulk," said Mike Shannon, a suburban Detroit real estate agent. His office specializes in foreclosures in a city that's among the national leaders.
"They're coming to us, saying `Look, I want to buy 50, 100, 1,000.' They want to own every decent and cheap house they can find."
Despite a stagnant retail housing market, real estate sales of foreclosed homes are booming. Shannon regularly fields calls from eager prospects, and recently sold 30 homes in one day to one buyer. A trio of U.K. investors has bought a half-dozen and plans many more."

Got $7500?

You can buy a house. If you want to live in Detroit that is. As quoted in a recent Chicago Tribune article, "The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service.Not $75,000. Remove a zero—it's seven thousand five hundred dollars, substantially less than the lowest-price car on the new-car market."

I turned to Craigslist to see what I could dig up. . .

You can buy this 3 bedroom bungalow for $59,900:

This 3 bedroom "starter home" for $27,000:

For $25,000 ($950 down and a mortgage of $350 a month) you can get this 2 bedroom with finished basement:

This "Investor Special" is on the market for $8,000:

For only $5,000 you can get this 5-bedroom 1 1/2 bath home:

Is this something we will ever see again? I hope not. . .

Economy Shmonomy

So, the gov't bailed out Fannie Mae and Freddie Mac - whoopie. They were essentially run by the gov't anyway. But, AIG?! Um...I can almost hear the coin jars emptying around the country. With gas and food prices on the rise, the housing market struggling, unemployment rising and the stock market declining, it seems like a scary time to get taking out money and renovating. Or, is it? There is something to be said about putting money into your home as a safe investment, though the flip side side if you are either borrowing that money or taking it out of another investment. Pile on top of this a weak housing market and the question comes of whether a return on your investment will be granted when the time comes. McMansions, flat-screens, and kitchens with granite counter tops and stainless steal appliances have seemed to become an average rather than an exception. Now that we see those who obtained those commodities floundering, what will the new market look like? Will we see prices falling in inflated areas over a longer period rather than just the "slump" we are currently in?

In many ways, renovating a home is a luxury. In most cases those who do it are not buying an inhabitable building or renovating for safety or functionality - it is mainly aesthetic reasons. In our case, the house is perfectly sound. Yes, there are phone and cable problems that need to be worked out - but the house is functional and secure, just not the prettiest of all spaces.

It will certainly be interesting to see where is all leads. With programs like "flip this house" and other home improvement shows on the rise, the amount of jobs and businesses within home renovation have certainly expanded. I realize this is just one of the areas that is going to be compromised by our economic standings, though it is one I think about on a daily basis when running to the hardware store or writing checks to contractors. While the trend fall from travertine and back to ceramic? Will flat screens fall... flat? I guess we will all just have to wait and see.