When will common sense kick in?

Here in the outside circle of Metro Detroit suburbs that encompass the City of Detroit we are seeing 1000 square foot bungalows selling for as low as $25,000. Some of these outside circle cities are Dearborn, Redford, Lincoln Park, Warren, East Pointe, Ferndale, Oak Park, Hazel Park. It is not uncommon to be able to buy a nice brick ranch home or bungalow for $50,000 to $70,000. In these same cities you could not buy a home for less than $100,000.

You can not buy the land, connect to city sewers, and build the house in this day and age. How can you build a house for $50,000? Last week I was in a Detroit foreclosure. It had new windows, new carpeting and was selling for $8000. I would bet that the carpeting and windows cost that much. Let alone the building structure.

Many Michigan home buyers are getting great deals. And I think these deals will continue to come as more Wayne County Homes and Oakland County homes go into foreclosure. But as time goes on we will continue to see investors buy up these homes. There will be a large number of rental homes across Metro Detroit.

But as time goes on prices will rise because people will realize that they can't build a house for as cheap as they are selling the home for.

Russ Ravary

Your southeastern Michigan real estate specialist