Saturday, July 26, 2008

Detroit: Cheaper To Buy A House Than A New Car

The good news is that home sales in the city of Detroit through June are up by a whopping +46.56% (YTD) compared to last year (5,389 homes sold in 2008 YTD vs. 3,677 last year), but the bad news is that the average price for a home sold in Detroit has fallen by 56% to only $19,448 so far this this year, compared to an average price last year of $44,346 for the January-June period! Compared to the peak of $97,850 for the average Detroit home price in 2003, prices have fallen by 80% (see chart above, values are annual except for 2008, which is YTD, data available here).

Bottom Line: The average priced house in Detroit ($19,448) is cheaper than the average price new car (
$22,650).

12 Comments:

At 7/26/2008 10:01 AM, Blogger Paul said...

The only thing I am amazed by is that the prices ever got so high.

 
At 7/26/2008 10:21 AM, Blogger Ironman said...

Here's a question: At what point would it make sense to begin buying up houses in Detroit for the sake of salvaging the stuff the stuff inside of them?

In other words, how low do house prices have to drop in Detroit before it pays to gut them for their parts?

 
At 7/26/2008 11:46 AM, Blogger juandos said...

I too am amazed the housing average housing price is $19k+...

"At what point would it make sense to begin buying up houses in Detroit for the sake of salvaging the stuff the stuff inside of them?"...

Take the tour then make the judgement but as far as I can tell it already looks like salvaging operations took place quite some time ago...

 
At 7/26/2008 1:17 PM, Anonymous Anonymous said...

You should read this article

There's a REASON house prices are lower than car prices in Detroit Michael. You live in Michigan. Presumably you've BEEN to Detroit, no? Have you not noticed that the exburbs look like a neutron bomb has gone off?

You should also note that many towns in America have gone out of business. Detroit is heading that way. The only way the town is going to be saved from itself is with a massive program of Federal aid.

I.e., more BIG GOVERNMENT.

 
At 7/26/2008 2:29 PM, Blogger Cranky said...

Amazing statistics. Of course, having read a few economics blogs, I know that the market will adjust and the people who've been living in cars and vans will move into these newly-affordable homes. It all works out, provided the socialists keep their noses out of it.

Anyways, Trulia has very good interactive maps on median/average house prices by city, county, district etc.

Hitsville USA, Aretha Franklin, Gordie Howe. Detroit still rocks.

 
At 7/26/2008 3:01 PM, Anonymous Fred said...

With a car, you can get away.

 
At 7/26/2008 4:43 PM, Anonymous Anonymous said...

Detroit property taxes average about $11,000 per year.

Plus, your neighbors' kids will terrorize you and your stuff.

 
At 7/26/2008 5:11 PM, Blogger OBloodyHell said...

> In other words, how low do house prices have to drop in Detroit before it pays to gut them for their parts?

You're assuming they are worth much beyond firewood. I've seen 8 Mile

Don't forget, a good chunk of the nominal value is in the land. You ain't taking that anywhere, and in order to get that money back out, you have to find an investor who wants to build there.

Oh.

Wait...

*Never mind*.

:oP

.

 
At 7/26/2008 5:15 PM, Blogger OBloodyHell said...

> Have you not noticed that the exburbs look like a neutron bomb has gone off?

Uhhhh, excepting inside the close area of the blast (a few hundred meters, I think I've heard), the purpose of the N-bomb was to remove the people, but leave the structures fully intact.

I grant the people removal part has probably been accomplished, but, judging from the view, I don't think the structures are all that intact, either.

;oP

.

 
At 7/26/2008 5:36 PM, Blogger OBloodyHell said...

> With a car, you can get away.

Hey, if Steven Wright can do it, so can I....

:-P

 
At 8/05/2008 12:30 PM, Anonymous Anonymous said...

these numbers just do not add up with other stats for Detroit. Do not believe just about everything you read...

http://seekingalpha.com/article/74841-s-p-case-shiller-february-home-price-data

 
At 8/28/2008 8:41 PM, Anonymous Anonymous said...

These numbers are absolutely accurate.

 

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