Archive for House + Home

Detroit Homes Are Helping The Motor City’s Economic Woes

Either way it’s better than being America’s Crud Bucket

In geographic terms New Jersey may be America’s armpit, but when it comes to property value, safety, and human decency, Detroit takes the pit prize.  Out of all the American cities that experienced economic upheaval from the end of the country’s industrial days, Detroit has had it the worst.  They’re one of the poorest and most dangerous cities located in the Rust Belt, and Michigan’s State Treasurer Andy Dillon recently recommended that a financial review team be appointed to the city because of its massive economic problems.

Since the economic downturn in late 2008 people have heard very few encouraging stories about improvement in The Motor City.  We’ve heard about promising urban gardens and have seen many car commercials that have remixed Eminem’s “Lose Yourself” in order to highlight the city’s tough nature, but it wasn’t until recently that some people saw a chance for true economic revival in the city.

His palms are sweaty, knees weak, arms spaghetti
There’s vomit on his spaghetti already,
Mom’s spaghetti
He’s nervous, but on the surface he
looks calm spaghetti
To drop bombs, but he keeps on spaghetti

The city’s glut of foreclosed homes has made it an investment haven for people who are interested in purchasing inexpensive and foreclosed properties.  Tax-delinquent property auctions have attracted both American and international investors to the city to scoop up some extremely cheap real estate.  Some people have paid as little as $500 for foreclosed property in the city, and if current trends continue one of America’s most troublesome cities could have a chance for some true economic revival.

In 2012 Wayne County sold 10,461 of the 18,897Detroit properties that were up for public auction. More than half of the homes sold for peanuts, and many savvy buyers have been trying to snag as many properties as they can.  It’s important to mention that these cheap properties aren’t only going to rich foreign investors or even rich American buyers, many Detroit residents have used the cheap home sales to build their own real estate nest egg.  In the previous link a Detroit native named Jasmine McMorris bragged about the 332 Detroit homes she has purchased over the past two years.  McMorris and other Detroit residents have purchased and repaired homes for a few thousand dollars, and have been able to earn ridiculously high returns on their property investments.

Dead or alive, you’re revitalizing the city with me!

Usually a large scale home buying spree can hurt local economies, usually because of unscrupulous landlords who rent their new properties and refuse to properly maintain them.  So far the mass property buy outs in the city have been beneficial, home prices in Detroit have actually been slowly rising.  In November 2012 home prices were up 3.4% from the previous year, and since over ¼ of Detroit properties are currently vacant it’s very likely that property values could improve in some of the city’s worst areas.

High property values can’t rescue a city from economic destruction, but it certainly does help.  If you’re looking for some houses to flip check out Detroit, or any of the other cities where there is an alarming amount of houses up for tax-delinquent property auctions.


Renovate for ROI

With the economy doing as bad as it is now, a home renovation project is probably the last thing on most people’s minds.  Renovation projects can be time consuming, complicated, and above all very pricey.  The unstable housing market has led to many people losing money on what they thought would be a solid investment, but people who are using their homes and properties as their ultimate safe investment shouldn’t give up hope.  If you want your property to be profitable, your best bet may be doing renovation work.

Why Renovate

It’s no secret that renovating a home can help its value.  People typically wait until they’re trying to sell their properties to do any kind of renovation work, mainly because they want their homes to sell for as much as they can.  Renovation projects can improve the value of your property and help breathe life into old rooms.  Just renovating a single room in your home can increase the value.  If you keep your renovations practical, noticeable, and inexpensive you can get a considerable ROI on your properties.

Renovation Tips

  • It’s believed that kitchen and bathroom renovations will give you the most bang for your buck, nothing improves a property’s value more than newly installed plumbing fixtures and new kitchen appliances.
  • If you want to get good ROI for your renovation work your property appraised before you start any construction work.  You’ll start off you project knowing exactly how much your home is currently worth, and that can help you better assess which areas you need to focus on to make your property more profitable.
  • No matter what, stick to your set budget during the renovation process.  This may seem like it doesn’t need to be stated, but you’d be surprised by how many people ruin their ROI hopes by having their renovation project funds balloon.  Come up with a realistic budget and renovation plan, then stick to it through thick and thin.

Should I Buy A House Or A Car?

You don’t have to be a journalist or real estate professional to know that home prices around the country have plummeted. Ever since the mortgage crisis in 2008, a number of state economies like Nevada, Arizona and Michigan have struggled to return home prices back to sustainable levels. But as the housing market begins to turn around, some striking figures have emerged. Financial reporters noted one especially egregious price disparity that showcases this struggle. According to online publication 24/7 Wall Street, there are now 10 US cities where it is cheaper to buy a house than to buy a car.

By comparing median home prices with moderately priced automobiles, the analysts at 24/7 have showed that even though home prices are on their way back up, the housing markets for some states still have a long way to go.

The list showcased the seriousness of housing markets across the state of Michigan. The Great Lakes State has the dubious distinction of five cities where a house is cheaper than a car, including the top two cities on the list, Detroit and Flint. In Detroit, the median home price has plummeted to $21,000, the same price as a base-level Chevy Malibu.

While the 24/7 list outlines the low price of real estate in today’s market, there is more to buying a home than raw price. The reason that many homes across Michigan have dropped in price is because of the departure of many industries and small businesses. Lowered property taxes means less successful schools and, without nearby jobs, a home purchase may not be the best commitment to make. While buying a home at a low price may be hard for many potential buyers to resist, buyers should have reason to believe they will see a strong return on investment. In short, while a car may depreciate from the moment you drive it off the lot, the depreciation is slower and more controlled than a home in a declining part of town.

For home buyers desperate for home ownership, however, the time may be just right. With home prices at record lows in some parts of the country, interest rates have also hit historic lows. The U.S. Commerce Department announced earlier this month that national average interest rates hit their lowest levels since records began in the 1950′s. If your credit is in order and you have a home picked out, affording a home has never been easier. Just be sure your property will continue to be worth the asking price one year, two years or five years from now.