Real Estate Cycle Profits the Home Buyers

In August of 1979, my husband and I bought our first home in Auburn, Alabama. It was a brand new home with 1300. S. F. for $39,000. We went FHA, and my parents, and grandparents helped us with the down-payment of 3%. It was a cute little house, with a corner fireplace, huge master-bedroom suite, walk in closets and I loved it. I never wanted to move.

In December of 1980, we had our first baby there, Christa, who is now my Partner is Real Estate. In August that year, my husband was “called’ to Michigan. There were skid markets all the way from the South to the Mid-West with me dragging my feet.

When we arrived and I shared with our Realtor what we were coming from and what I hoped to find in a home. She said,

“Well, that will cost $100,000. to buy in Ann Arbor.”

We were paying $350.00 per year in property taxes in Auburn, AL and the taxes here were around $2,200.00 contributing to the lesser amount of home we could buy.

After looking for a month, in August of 1980, and HATING everything we could afford, we moved in to a townhouse apartment, that is
now a condo conversion and sells for $160,000.

.

After about 9 months of living there, our Realtor called us to tell us, she thought she had found us a home that was listed at $69,000.00 with a $3000.00 decorating allowance. The family was moving to TX. Mr. Seller was already there and school was out so Mrs. Seller was anxious to join him. They had reduced the home from 100K to 69K. So we took a look…

Yuk, orange and brown bold vinyl wall paper, dated kitchen, brown carpet. But, we bought it. I hated paying rent. The best news of all is that the owners would accept an 11% land contract. Interest rates at the time were 18%. So we moved in, re-carpeted, painted the whole house, painted the kitchen and lived there for almost five years and one month shy of when the land contract was due. I sold it by owner for full price. We made 36,000 on the house.

Then we moved (can you believe this?) down the street into a four bedroom home, where we also stayed for also 5 years.

That home was in move in condition. (It was hilarious to see our friends walking the swing set down the street.)

We loved it there and would not have moved but baby number 5 was on the way and we couldn’t get everyone around the kitchen table in the nook. We bought the home for $110,000.

Five years later, I sold the house myself in one hour, to another neighbor who lived on a street a block over. She was helping her daughter with her paper route, when we put the sign in the yard. Then we were able to purchase a lot and build the home we are still in Saline, MI.

Ann Arbor has always had issue with “affordable housing”. Many people could not afford to purchase homes in Ann Arbor so they would start out in Ypsilanti, Manchester, Milan or other smaller communities around Washtenaw County.

Guess What?

Ann Arbor is now affordable.

In the 1980’s, Michigan and the rest of the country were going through a recession. Housing prices were coming down. It afforded us the opportunity to own a home in Michigan.

Bottom line for us in Michigan, this has allowed many home buyers to purchase their first homes in Ann Arbor. Had it not been for the recession when we moved here, I may still be renting.

In the midst of the current market conditions, there is a silver lining for buyers.

There is “affordable housing” in Ann Arbor and Washtenaw County.

***Photos courtesy of Flickr, KCkellners for carpet, RusselljSmith swing and SusannaK’s ugly wallpaper***