Detroit Real Estate

As everybody knows here in the Metro Detroit area the housing market has taken a tremendous hit.  Many of Metro Detroit homes have lost 30 - 40% of their value since 2004.  Unfortunately the real estate market is not coming back anytime soon here in Southeastern Michigan area.  We are not going to see rapid appreciation in home values in the next five years.  It is simply because of the economy and all the foreclosures.

All the people that have gone into foreclosure can not buy a home for at least three years.  Many will never be able to buy again because the lenders guidelines have changed.  Then they have to save for a larger down payment.  The trend is for buyers to have at least 5% down.  This is a big change for many of the home buyers that bought with no money down.  So many people won't be able to buy for years to come.  Less demand causes home values to remain low. 

We need more buyers, more people to create more demand and higher home values.  Yes home values are going to go up.  But not at 5 or 10% rate in the next few years.  We are going to see a slow appreciation in home values in the next five to ten years.  As a metro Detroit first time home buyer or Oakland County home buyer buy for the long term.  Buy for a 7 to 10 year period.  Here in the Detroit area we are not going to see home buyers trading up rapidly every two or three years.  The years of rapid home appreciation is gone.

So if you are planning to buy in Southeastern Michigan, think in the 7 to 10 year range.  I hope that the economy and housing recover sooner but be safe.  Make sure that they home you pick out can fulfill your families needs for the next 7 years. 

So it doesn't matter whether you are buying Canton real estate or a Farmington Hills home the best course of action is to play it conservative.  Just my thoughts.

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