The REAL Detroit Debate
I'm in Dearborn, MI today, preparing for our all-out coverage of the Republican debate tomorrow. No, don't worry, I haven't jumped over to the dark side of reporting, that being politics. I'm here to give a bit of a snapshot of the Michigan real estate market. I'll have a full report on TV tomorrow, but I just had to share a little blip that won't make it on TV, because I'm just too kind to do that to the nice real estate agent who lent me his time this morning for an interview.
So the agent was touting all the great virtues of the Michigan market, despite the fact that I was quoting him stats, like that Michigan has one of the top foreclosure rates in the country, and prices are very far in the negative and sales are, well, pitiful. He admitted that the whole car thing wasn't really a good thing for the real estate market, but he then tried to focus on the rehabilitation of downtown Detroit. He cited the new "riverwalk" as a great place to visit. And then, and I'm not kidding, he said that the riverwalk was great because a woman could go out of her hotel and walk for a whole mile without being assaulted.
Do I need to keep blogging?
Ok, I will. So, as we stood in front of a three million dollar home, brand-new construction, on one of the small lakes in Bloomfield Hills, a chi chi burb of Detroit, the realtor told me that the trouble in the market really wasn't at the very high end, it was in the low-mid-range homes, the $6-800,000 range.
I asked who was buying all these multi-million dollar homes, and he said, "people who have arrived." Arrived in Detroit? He mentioned "venture capitalists" and some folks in the chemical industry.
But then I have to say this: I took a quick look inside this $3 million dollar home, which he admitted would probably sell for less, and I have to say that anywhere else in the world, save maybe somewhere in Ohio or Indiana, this house would be worth $6 million easy. It sat right on the lake, with its own motorboat slip, totally huge, gorgeous high-end chef's kitchen, in the nicest neighborhood around here.
I've met an awful lot of real estate agents who will do their best to show the bright side of their markets. Who wouldn't? But they usually pepper it with at least a few specks of reality. I'll admit that I don't know much about Detroit, and less about Michigan (I lived in Grand Rapids for all of seven months, and, well, I left after seven months), but I do know the numbers, which in most cases don't lie.
Then he mentioned that the builder was offering $25,000 cash to the agent who could get a contract on that $3 million-dollar house... that's over and above the commission.
Questions? Comments? RealtyCheck@cnbc.com