Saturday, February 21, 2009

Housing Horror

Television holds few shows that I will watch religiously but one of my top favorites is Bill Maher on HBO. He manages to get an eclectic mix of people on his panels and has various guests on representing both conservative and liberal views, though the show is primarily liberal. My primary reason for watching is that I am able to get tidbits of news that seems to be overlooked by mainstream media.

Tonight's panel included Rep. Maxine Waters (D-CA) who is serving her 10th term in office. Among the interesting insights into the current state of the economy and the bailouts, Waters commented that "Americans have no idea how bad things really are." If that wasn't depressing enough, Maher pointed out that the housing market in Detroit is the worst in the nation. The motor city represents more than just a segment of the U.S. population - it stands for American ingenuity, pride, commerce, and manufacturing. According to Maher, the average home in Motown is going for $16,000 and the city is a "Ghost Town."

I was in such disbelief, assumed he was exaggerating, and I did some research of my own. A year ago, eFinance was already talking about the "Housing Market Nighmare" in Detroit. In June '08 the average Detroit home was going for $20,000 and by December, the average was down to $18,500. Now, according to the Chicago Tribune, the average rate is $7,500 - much lower than Maher's dismal report.

In August, a woman bought a Detroit home as an investment property and paid only $1.00 . That's ONE dollar! I suppose, if she had held out a bit longer, she could have gotten it for half that price!

The only thing I find spookier than a ghost town is the frightening state of the economy. The economy is baaaaad but we can't go getting our woolen undies in a twist. We can't panic, we can't quit spending and we certainly can't run from the problem. Instead, we need to be educated about trends, be aware of the issues and make sensible decisions for a stronger future.

2 comments:

  1. That is shocking. And saddening. But my husband and I are buying our first house this summer so I am one of the few that look to benefit from this state.

    Sort of related statistic I read the other day:

    Number of homeless in America: 650,000. Number of vacant housing units: 16,500,000

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  2. Iris, several things:

    Most of my clients in the late 1980s and all of the 1990s were in Detroit and Chicago, and thus I visited Detroit at least twice a year. Additionally, I attended the University of Michigan and thus have lots of contacts back there.

    Detroit was a ghost town back then. Most depressing major American city I ever visited. It was sad. Some friends of mine worked on the "paperwork" associated with bringing gambling into Detroit, and that's a story for another day.

    Same with Cincinnati, Cleveland, Racine, Milwaukee, St. Louis, etc. Only Chicago still has some vibrancy. This economy decline, at least for a certain segment of the population, has been going on for at least 30 years in my opinion. It is just manifesting itself differently.

    As for our cessation in spending, you are right on. My current post is about shifting into almost total inaction when part of your previous action may have been misguided or faulty.

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