The more desierable areas like Plymouth, Northville, and Bloomfield Hills never really saw the same type of dramatic losses that other parts of town did and they are moving up at a sustained pace.
As to homes costing as much as in other hot areas? I doubt it. Not for a LONG time.
I was just tooling through San Jose, CA here on Truila and couldn't believe that a 1,200 sq. ft. brick ranch on a 50-ft wide lot runs about $600,000!!! That same home, even in Plymouth, will ring right in under the $200,000 mark.
In order for this area to be priced as high as what I was seeing in California we'd have to see 50% gains per year for 3 years. That's not going to happen. For one thing, the way appraisals are done now, they wouldn't let the homes appraise for that high that fast. The appraisers would throttle the market back. For another, if homes got that pricey, there would be an urban renewal as people moved back into Detroit just like Dan Gilbert thinks is going to happen. You can still get homes that need just a bit of work in the City for $5,000 to $15,000.
The median asking price according to them has skyrockets dramatically in just 7 months in Metro Detroit. to $144K when it was only like $92K 6 short months ago. Remarkable and literally shocking!! And the inventory continues to decline and decline with no let up in sight.
And an area like Metro Cleveland had declining inventory for a while, but it stabilized recently around 17K some listings and the median listing prices are flat there where as Detroit has 13K and that is only down from prior months and years and a median asking price that is up more than $50K in 6 months. And it is quite a shocking event given that the Cleveland area not only has a lower unemployment rate than we do, but also a lower unemployment rate than the national average.
What I am talking about is could things get so bad that even decent starter homes in mediocre neighborhoods skyrockets to the point where there is nothing decent for even less than $215K. Even during the bubble days of 2000-2006 for us, it was not quite that bad as decent starter homes (say 900-1200 square feet) where around the $160K to $180K range in mediocre neighborhoods.
Or even worse, could you foresee a situation where it gets as bad as the areas more expensive than 95% of the United States (Seattle, LA, Boston, NYC, Washington DC) where you cannot get even a decent starter home in even a mediocre neighborhood for less than $300K which is just beyond insane or even close to it where no decent starter home in a mediocre neighborhood for less than $250K. I though the $160s for starter homes in mediocre neighborhood was too high and a bit bubbleish, but that does not compare to how bad those other areas are.
But the mid to high 100K range for a decent starter home in a mediocre neighborhood would be tolerable to my brother, but I do not think the prices of those other areas would be and inf act, I do not think they would be tolerable to anybody except rich people.
I thought our bubble prices were bad, but the prices in those areas are so beyond overvalued that it would be a massive understatement to say those markets are just overvalued.
So what do you think? Are we in a housing bubble part 2. And are we likely in for a shock that could be even far worse than our first bubble in just 1-2 years of time? Or is the worse case scenario a return to or close to our peak prices of 2004-2005 and a level off from there for a long long time?
And this question is not about a specific area of Metro Detroit, it is about the region as a whole, particularly Oakland, Macomb, and Wayne counties