Very long post regarding a first-time home buying quandary, and yes, I've read the other recent threads. My immediate questions (meaning I know I'll have more as this process progresses) are quite specific and as a result haven't yet been addressed here. Mainly, if the
area of metro Detroit is supposedly synonymous, why are houses in West Bloomfield so much cheaper than those in Birmingham? What am I missing? And in my particular situation (age, childlessness, etc) is there truly an advantage to buying versus renting?
Mr. Adams and I have lived in Birmingham, MI, since 1999. I love it here. We rent a house that is approx 1400 sq ft, three bedrooms, 1 1/2 baths, two decks (one outside the upstairs master bedroom). Our landlord (who moved to Arizona a few years ago) now wants to sell the house and is pressuring us to buy it. (She'd had it on the market with no bites for a little over a year before she listed it as a rental, that's when we moved in.) She's asking $210,000 for it, which seems excessive in this market. There are similar houses all around us that have been sitting vacant with "For Sale" signs in front of them for years. She's not really willing to negotiate, and if we do ultimately move out of this house Mr. Adams wants to buy rather than rent "so we don't have to go through this again."
I really love Birmingham, but actually buying a house here is so expensive. (Whereas we could find another similar rental property in the area comparable to what we're paying now - a little over $1000/month. Plus utilities.) So I expanded my search out to Bloomfield Hills, Beverly Hills and West Bloomfield. (Save your snide cracks about the pretentiousness of wanting to live in the B/B area; I've already heard it all from Mr. Adams and several of my friends. I'm also looking to the future, as I'll explain later.) Anyway, I've found some nice houses in our price range in West Bloomfield, but I'm wondering exacly why there happen to be so many affordable houses in this area, especially when so many of them are located on large plots of land versus the tiny lots in B'ham? I've always heard "you're paying for the land, not the structure." Here's an example: this house
is in our current zip code - less than 1,000 sq. feet, tiny lot, only one bathroom and still $140,000. For the same money, we could get this house
in W.Bloom, which is situated on a much larger lot and has an extra half bath, not to mention the other amenities. Why such a huge price differential in two (presumably) similar demographic areas?
Mr. Adams and I are both over 40 years old and have no children, so proximity to schools is of no concern; we both work from home so we're looking for internal accoutrements rather than external. With this in mind, it seems to me that renting a house similar to our current one makes more sense than making a major purchase like a house just so that we won't get ousted again, or so that "you can decorate it any way you want to" (some of my friends' constant refrain in favor of buying). And I feel that the housing market in metro Detroit is far less stable than other major cities; that is, when people say "you're making an investment" or "you're building equity", that doesn't always hold true. My parents bought their house in south Warren (three blocks north of Eight Mile Road) in 1958 and have made many upgrades over the years. Seven years ago it was appraised in the neighborhood of $80,000. Last year the appraisal was a little over $20,000, and from the real estate listings I see online for that zip code, no home is being offered for more than $30,000, despite the size and available amenitities. My Mom is basically "stuck" there, as she'll never recoup what she and my Dad put into that house over the years if she sells, so where is the "investment"? The "equity"? That's part of why I'm looking to stay in Birmingham/Bloomfield; from what I've seen in my research, those homes have maintained much of their value over the years, versus neighboring suburbs like Royal Oak, Troy, Ferndale, etc.... Except for those W. Bloom houses....why are they consistently selling for less??
The tl;dr summary: What makes houses in West Bloomfield that much cheaper than Birmingham/Bloomfield Hills/Beverly Hills? And if you're looking to stay the same or go bigger (dwelling-wise), what are the benefits of buying versus renting for an older childless couple at this stage in their lives?