Tuesday, April 20, 2010

location, location, location…

articles from two very different north american real estate bubble markets came to me this past week, and i thought it would be worthwhile to compare what you could get in each for your money..

first, ill give you the good news from detroit: home sales were up, inventories were down, & the median sales price last month was up 33% to $7,725! WOW! thats a real bubble!

let’s see what we can get for under $10,000 in detroit…this search of detroit houses on the market there returned 3838 entries at the time of my latest search; of course, this is real time info so you cant count on the same ones appearing as we saw when we first discussed this via email…but tburcher did look further into this house listed for $84,900, with 6 bdrms, 4 baths, & 4370sq ft, which had been on the market 266 days…then he did the address search on Google, then looked at the street view: its in a real nice neighborhood; this was a house that would sell for at least three times as much almost anywhere else in the country…

the other bubble city we’re going to look at is vancouver, canada…so what will $1 million buy in vancouver, BC – a crack shack or a mansion?

 

click to play: Vancouver, Crack Shack Or Mansion?

tburcher got 13 out of 16, & CheSia & myself got 11 right, so we’ve set the bar pretty high…see if you can beat us…

if you want to check out some more vancouver real estate thats on the market, here’s the the official site of the National Association of REALTORS for the city, which at the time im linking to it is showing 2589 listings; as with the detroit listings site above, this is updated in real time, so any comments you make should take that into consideration…

it should be obvious by now that similar houses in vancouver are quite a bit more expensive than the same size, construction and age of house in detroit – if the listings accurately reflect the market, you should be able to sell a house in vancouver and buy nearly 200 of the same in detroit…so why the difference?  both are transportation hubs, with vancouver being a pacific seaport and detroit having access to great lakes & atlantic shipping…could the climate be that much better? not much, checking vancouver’s climate, it appears summers are cooler, maybe drier, but it rains or snows there on more than half the days during the winter, and gets less than 180 hours of sunlight  november thru january…you can argue one place might be slightly better than the other, and im not even sure which that would be, but at the end of the day its just a place you come home to sleep at, & while youre asleep you have no idea how much you paid for the location your bed is in...

so whats happening in vancouver? the Vancouver Real Estate Anecdote Archive gives us a clue…here’s an example: An early 30s administrator in our downtown Vancouver office asked us if it was a good idea to buy a house with no money down.  She pulls in 35-40K maximum and her husband is underemployed slinging coffee.  We said “Generally no, because of the risk in involved”. I added that rates were going up and she could be easily left with negative equity.  Last Friday, she revealed her latest plan as she scanned the maps on the MLS website.  She and her husband were going to “flip” a property to come up with the downpayment for a house.  After all, she has a cousin who is a carpenter.  She didn’t mention how she was going to come up with the downpayment for the flip.”

3 comments:

  1. omg. Well, my accountant told me to hole up in a rental for the next 3-5 years. To not even THINK about buying anything.... And who's gonna buy this flip house? Who can buy a damn thing right now???

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  2. Always keep a tent handy in your closet. Along with canned goods. :-)

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  3. lol-- I have both, RZ, of that I can promise... Sheeeez. I so hate not having a hot shower though... :)

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