1. First off, I really do not think anybody should be buying a home for any reason until 2010. There is nothing stopping home values dropping around the country. What needs to happen first is we need to have a leveling out period.

2. Home prices are expected to drop in the greater Detroit, MI area another 8% by May 2009. CNN wrote an article analyzing data and what home prices should be doing. In there you will see Detroit, MI going down 8.6% and Farmington Hills going down 5.9%. This is one of the first charts I have seen that I agree with. Its probably because it was not written by the National Realtors Association. Realtors will always tell you its a great time to buy…mainly because its how they get paid.

3. Shouldn’t this be the time that you want to buy? Prices are dropping at a alarming rate and you have endless choices of where to live. This is the time that you really need to think about why you want to move or buy a house instead of “I can get a great deal.”

4. So why would you want to buy a home in Michigan in 2008 or 2009? There are only a couple instances where it makes sense. Let’s say you just got married and you need a place together now. You need to live somewhere. If both of you were living in a 1 bedroom apartment then you need more space. Another reason would be that you plan on living in this next home for the rest of your life. When you commit to this then it does not matter what is happening in the economy. That house is now your home. Maybe you want to make a lateral move. This is one where you are buying a home worth the same as your current but maybe its in a better school district or nicer community.

5. What about the people who want to upgrade their style of living and already own a home? This is what you have to ask yourself. If you plan on living in that home for the next 15 years (everybody does) then buy it. Do you really need the bigger or newer home? If you have the money, then do it. I have told friends of mine that if they are happy knowing the house they are going to buy is going to de-value by 20% over the next 2 years then it does not matter, i.e pay $300k and in 2010 its now worth $240k. As long as you are comfortable with losing $60k in equity in your home then go for it. Just do not complain in 2 years if you lose your job and cannot sell your home or your neighbors bought the same exact home for $230k. Remember, nobody pays full price for real estate anymore.

6. First time home buyers really need to take a look into their future if they plan on buying in Michigan. Let’s say that right now you currently rent a 2 bedroom apartment for $900 a month. In the same city you live in you could get a 3 bedroom home for $120k. Lets assume you have money for a 20% down payment which would give you a loan for $96k. Assuming 30 year fixed mortgage rates are around 7% you can get a monthly payment for about $640 a month. With property taxes and home owners insurance your probably looking at $900 a month. Not bad. You get another bedroom and a tax write off now. What if you could wait another year. That same house or one just like it is now worth $108k. This is $12k off the asking price now. Lets say you put down the same 20%. You get a mortgage of $86,400. Monthly principal and interest payments are $575. This saves you $65 a month in interest over the life of the loan. Over 30 years it comes out to $23,400 + $12k in down payment you saved by waiting a year = $35,400. To somebody buying a $108k home, I know that is a lot of money. It would make more sense to just rent for another year while home prices keep on dropping. This way you can save more money and not have to worry about things like the furnace blowing, replacing a roof, mowing the grass, and any other things that can go wrong with a house. If you rent, all of those are included in your rent payment. When you own they are additional payments on top of your mortgage payment.

7. Renting is the way to go in Michigan and let me tell you why. Landlords cannot raise rents on their properties because there are not enough people to rent to. Even the people buying homes for rentals are feeling the pinch. Here is a great example. My family owns a rental property in Eastpointe, MI. We bought the home in 2005. Fixed it up and have been renting in since. Since 2007 there have been a number of homes on the street which have been foreclosed on. Speculators have came in and bought those homes for $30k (we paid $60k plus upgrades to make the house pretty). The mortgage payment on those houses are now half of ours. They charge $200 less a month for rent than we can because our mortgage payment is higher. Its basically the same house. Ours is just a little nicer, but why would somebody pay $200 more in rent just because it has newer appliances? You wouldn’t. So now we are on the outside looking in. We need the money to cover the mortgage payment. We had to lower our rent by $30 a month so now we just break even. Hopefully, you see where I am going with this. This is happening in every city including Royal Oak, Ferndale, Warren, Detroit, Farmington Hills, etc. The renter can now negotiate because there are so many homes and apartments available. Before, it was never like this. Remember, if something goes wrong with the house its not your responsibility to fix it, its the landlords.

8. The economy in Michigan sucks. What makes you think your job is not replaceable? It is. What makes you think you will not be laid off? You could be. Why tie yourself into a bigger mortgage payment or take on the responsibility of being a first time home buyer in a dying economy? It would be smarter to stay what your doing until outside economic forces cool down. I read this article from the Detroit News and it blew me away. It talks about the possible sale of Chrysler to General Motors. About 37k Chrysler workers live in the State of Michigan. If GM were to buy Chrylser, some 21k hourly workers and 15k salaried workers could lose their jobs throughout North America. Of the 36k that could lose their jobs half of those are in Michigan. Some 18k people could be unemployed because of the sale. Now you need to think about all of those people who do not have jobs anymore and how their lifestyles are going to change. These are good paying jobs (a little too good paying). You will see even more homes go into foreclosure in Michigan because nobody can make the payments on their home loans. This will cause home prices to drop even more.

9. The 18k number is probably on the small side. Take into consideration all of the suppliers Chrysler has. All of those places would not be needed anymore. More small businesses would close in result of the Chrysler sale. Lets add another 6k in job losses just from the suppliers. Now we have 24k unemployed people. Now you need to take into account where those 24k spend their money at. Places like restaurants, movie theaters, car dealerships, lawyers, Dr’s offices, and shopping malls. All of those places will be hurt too because nobody is spending money. The cities of Sterling Heights and Auburn Hills would be hit hardest. The Chrysler World Headquarters (a 1 million square foot building) in Auburn Hills would be of no use, and the plant on 17 Mile Road and Van Dyke would be obsolete. Auburn Hills collects $3 MILLION in taxes and Sterling Heights $2 MILLION in taxes every year just from Chrylser. Let alone all of the people that own homes in those cities who work for Chrysler. All of the tax revenue they collect from property taxes is gone. Do you think those two cities might go bankrupt without the revenue? I wonder who is going to pay for the police and fire departments. Lets add another 500 city and county workers on top of that. We now get about 24,500 more unemployed people JUST IN THE STATE OF MICHIGAN if this sale of Chrylser to GM goes through.

10. Figuring out real estate prices is all about supply and demand. The supply of homes is getting larger and the demand for them is getting smaller. If 24,500 people are given pink slips over the next 2 years just from Chrysler it will cause home prices to drop even more. Do not think you are getting a deal because the home you want to buy is worth half of what it was in 2004. The market is telling you what its worth. If you are comfortable where you live in Michigan right now then you need to stay put. It will save you thousands of dollars on the price of a home over the next two years. Stay posted on the sale of Chrysler. If it goes through then you may need to wait longer than 2010.

Post from: The Top 10 Reasons

The Top 10 Reasons To Not Buy A Home In Michigan Until 2010

1. What is really crazy is that this article was posted on the Detroit News website today while I wrote an article about a new way to collect property taxes yesterday. In this article it states that the County Commissioner of Macomb County is suggesting to raise property taxes by almost 25% to make up for a ever growing defecit.

2. They are expecting to have budget defecits of almost $33 million in 2009 and $43 million in 2010. Really? The county that has a city that was rated one of the best places to raise a family (Sterling Heights) in the country year after year is that far in debt? How can this be so?

3. Of course the governments only plan of action is to raise property taxes to make up for the loss in revenue. It blows my mind why we even vote for anybody because it always seems like things get worse not better, regardless of what level of the government it is.

4. If the Macomb County Commissioners raise property taxes the full amount that they can it would bring in an extra $11 million dollars in revenue for the county still some $22 million dollars short of being able to cover next years defecit.

5. Sure, for a home that’s worth $200k that is only an extra $100 a year which is about $9 more a month. Not a big deal and for most people that still own their homes its probably something that can be done. Too bad many people are having to borrow from their home equity loans just to be able to stay current on their taxes. Good thing that people can still write off their property taxes on their income taxes.

6. The Commissioner from Eastpointe said that the county is in dire need of help because they do not want to lay people off and have to shut down programs. Some of these cuts include selling properties like the Martha T. Berry Medical Facility in Mount Clemens. About 430 county workers would be laid off. For the people that have retired with the county they would have to look at possibly freezing or making drastic changes to its pension and benefits programs. They would also charge property owners in the county’s northern communities like Romeo for instance to pay for the Sheriff to patrol those areas which are not being paid for now.

7. The main reasons why Macomb county is getting hit right now is due to decreased property values which results in the County assessor having to lower property values which lowers property taxes. With so many homes going into foreclosure they are losing a lot of revenue from those property taxes. Costs for their retirees from pensions and health benefits to the cost of inmate care at the prisons are all rising too. With so many vacant properties sitting around in the county because of people defaulting on their 30 year mortgages its easy to see why this is going down.

8. I know that a lot of this could have been prevented. How did this defecit get so big so fast? It went $2.7 million to $12 million in 3 years. I understand that gas prices, food prices, health care prices, and others have gone up, but almost $10 million in 3 years? That is ridiculous. Its easy to point the finger at the people in control because it comes back to poor planning. Isn’t that all that the government knows how to do in the first place? We can assume that they did not think that their citizens biggest employers of Ford, GM, and Chrysler would have tanked so fast resulting in job losses and lost tax revenue but they should of.

9. But who really cares about this defecit anyways? We are operating in the hole to begin with so whats the difference if we are $10 million or $100 million in debt. The US Government is trillions of dollars in debt and things are still moving (in the wrong direction). Why not just keep spending and keep people employed?

10. I guess I just don’t get how hard it is for anybody to run a government. I thinks its so simple. If I was the finance director for the county I would have said something like “we only have $1 million dollars in the check book which will last us 5 weeks. At that time if we do not get any more revenues we will have to shut down the government and its services until next year when property taxes are due. Since I AM A CITIZEN of this county I do not want to see my property taxes going up because I want to know what happened to the other $3500 I gave to the county (which I did not get a break down of where every dollar I gave them was spent).” Its so easy to raise taxes and say it will take care of everything but I have not seen one piece of evidence ever that supports higher taxes fixed anything. Raising taxes solves nothing. Hopefully you read my idea about using how much land you own as a way to collect taxes versus real estate values. The land issue would include businesses too. That’s right, Ford, Chrysler, and General Dynamics. Your large facilities are taking up large amounts of property and should be taxed accordingly.

Post from: The Top 10 Reasons

The Top 10 Reasons Macomb County Michigan Is Being Hit With A 25% Increase In Property Taxes

1. The Detroit News posted an article talking about Governor Granholm proposing to lower speed limits on Michigan freeways due to high gas prices. This is dumb.

2. I remember in the past 10 years I have seen gas prices go from $.99 for MIDGRADE to $4.17 for REGULAR as of today. If driving slower to save gas was such an issue why did no brainiacs think about this when gas hit $2 then $3 a gallon. The reason is cause we own a car to be able to get from place to place faster not slower.

3. In a previous post of mine about speed limits I talked about how we need to get rid of them so people can get from place to place faster.

4. Let’s leave it up to the people to decide how slow or fast they want to drive, not tell them how fast. Get rid of the speed limits and you know what, if you want to do 55mph than stay in the far right lane. If you want to do 100mph stay in the left.

5. If its gas prices the government is worried about then you need to start promoting people driving less or not at all. Hello 4 day work week.

6. I appreciate that Governor Jenny wants to save us money but if anything she is taking money out of our pocket. Now with traffic moving slower that’s going to be more time idling at stop lights because now the two lights you normally have to sit through at an intersection will turn into three because everybody getting to that light has to take more time to get there.

7. Gas prices are going to continue going up, there is no doubt about that. If its not us consuming the oil its Brazil, Russia, or India. They want to be like us and we need to be more like how they were. Riding mopeds to work and jamming into a train.

8. Here is a good way to save the citizens gas money, how about public transportation? The Detroit Tri-County area has probably the worst public transportation system for any major city. There are no light rails or trains that connect the suburbs to the city. If there was one I’m sure, no wait, positive that people would adapt and get on that train and ride it to work. Who wouldn’t want to do that. Now you don’t have to pay attention to the road driving in rush hour in the morning. You could have your cup of coffee and read the newspaper in the 15-20 minutes it would probably take. Better yet, how about a quick cat nap.

9. What about the car companies. You know the Big 3 or what use to be the Big 3. Im not going to start about how poorly they have planned with the trucks and not building cars. All that needs to be done is the car manufacturers need to change the gearing in their cars. Its that easy. Most American made cars have higher gears which allow for quicker starts but lower top end speeds. Cars manufactured in Germany and throughout Europe come with lower gear ratios which allow for higher speeds while keeping RPM’s down. The RPM’s is what burns the gas not the speed. The first American car company to market a car built for highway driving is going to get a winner.

10. Its one more liberty that “The Man” will be taking from us telling us what to do instead of letting the people decide. What’s funny about this is that I obey speed limits. Most of my friends hate letting me drive because I never go faster than the posted limit. Its not that I’m not capable of handling a car at 100mph, its just that I don’t want to deal with “The Man” and then have my insurance go up.

Post from: The Top 10 Reasons

The Top 10 Reasons The State Of Michigan Does Not Need To Lower Speed Limits