I've tried to do some research on US real estate prices.I've come across a house in Detroit with a great view to the river being sold at aroung $140k. I've also come across a list of median prices for US houses by state. Some prices were really attractive (on my perspective, only, and when comparing with prices at my country!)Is this the case? Can anyone from the US tell me if this is the case and what regions have this kind of prices and the quality of the homes there? Can someone point me to any article or document where I can learn about the actual home prices ($ amount) in the US?Where I live (a near developped, southern EU, country), near the suburbs of the country's capital, a house (with almost no quality) costs €200k. If this is the case (I don't know anything about the US housing market...) there is a huge imbalance among home prices in the EU vs. US.If the US gov allowed it we could see a huge migratory flux into the US. This could help to bottom the US housing market and fix the crisis. It would also help to burst the housing bubble in some EU countries

Hello BullBear,Just a few links, to help you out:National Association of RealtorsCase-Shiller Home Price Index - WikipediaS&P Alternative Indices Entry for Case-ShillerIf you Google "Case-Shiller" you will find many articles and other references.To actually see pictures of homes in various areas, you could try a large national firm like Coldwell Banker:Coldwell Banker HomesTo your first point - Michigan has been hit very hard. In Detroit, prices have fallen well below $100,000 in some places.Might seem like a good investment opportunity, but there is real urban blight in Motor City. Also, neglected/abandoned homes deteriorate quickly. (I would stick with your David Hockneys, given a choice.)

detroit is an economically depressed area with high unemployment (and downtown detroit has a high crime rate, the suburbs are more pleasant and safer).That's why stuff is cheap there

Housing prices (on a per sq ft or sq m basis) vary in the US by much more than an order of magnitude due to huge variations in supply and demand. Case-Shiller publishes a home price index that covers 20 major metropolitan areas. Zillow.com is a very interesting site that will provide a price estimate on any US residence.Currently, housing prices in the US are changing rapidly (with a strong downward bias). Economically depressed areas (e.g. Detroit), overbuilt areas (e.g., California, Florida, Nevada), outlying subdivisions, and areas with high rates of foreclosures are all seeing very large price declines (as much as 50% to date). Another driver for home values is crime rates and municipal financial problems which in affect the quality of life in some areas. Economically stable areas (e.g. Dallas, Denver) and desirable locations (affluent urban areas such as New York City) are seeing lesser declines. It's very hard to generalize the quality due to the wide range of ages of housing and wide range of land values. In some areas, people are still buying small older houses (e.g., 100 sq m) for over $600k just to demolish the house and build a bigger home. In other areas, builders have created so-called McMansions with all the latest amenities that may cost less than $300k.

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QuoteOriginally posted by: BullBearWhere I live (a near developped, southern EU, country), near the suburbs of the country's capital, a house (with almost no quality) costs €200k. If this is the case (I don't know anything about the US housing market...) there is a huge imbalance among home prices in the EU vs. US.If the US gov allowed it we could see a huge migratory flux into the US. This could help to bottom the US housing market and fix the crisis. It would also help to burst the housing bubble in some EU countries I had a discussion recently on this topic with a guy interested to invest respectable amounts in RE, please tell me what sort of house one can buy with 200K, where, how big, how old, compliant to what standards (eg earthquake safety, energy efficiency etc), what sort of taxes burden the transaction and ownership, and what it costs to rent such a house plus any other info you think as relevant. PM me if you wish so. 200K sounds rather cheap to me if you talk about a new-built typical 2-3 bedroom flat at the range of 100 sq meters.

QuoteOriginally posted by: AnthisQuoteOriginally posted by: BullBearWhere I live (a near developped, southern EU, country), near the suburbs of the country's capital, a house (with almost no quality) costs €200k. If this is the case (I don't know anything about the US housing market...) there is a huge imbalance among home prices in the EU vs. US.If the US gov allowed it we could see a huge migratory flux into the US. This could help to bottom the US housing market and fix the crisis. It would also help to burst the housing bubble in some EU countries I had a discussion recently on this topic with a guy interested to invest respectable amounts in RE, please tell me what sort of house one can buy with 200K, where, how big, how old, compliant to what standards (eg earthquake safety, energy efficiency etc), what sort of taxes burden the transaction and ownership, and what it costs to rent such a house plus any other info you think as relevant. PM me if you wish so. 200K sounds rather cheap to me if you talk about a new-built typical 2-3 bedroom flat at the range of 100 sq meters.cheap? How is it cheap? If the average salary is around €25,000 that would be 8 times the average salary.That is not cheap that is insanely expensive.There are huge property bubbles in various EU countries - some worse than the US.

Your argument is pretty valid, on the other hand, prices for this type of house where a live, start at the rate of 3K per sq meter, while it can be rent for 500-800 euros per month (depending on neighborhood and amenities), and there are estimates that there is a stock of 200,000 such newbuilt houses for sale in a city of 4-5 million inhabitants. Not the best situation for a RE investor, especially a new entrant.Actually, i have been expecting a strong correction some years now, but so far all i ve seen is a price freeze. The promoted excuse for this is that developers, especially the older ones, are "sitting" on the vast profits they have made over the last decade, and feel no pressure to sell the property at a discount from their demanded prices. The point is for how long they can endure this...

QuoteOriginally posted by: AnthisYour argument is pretty valid, on the other hand, prices for this type of house where a live, start at the rate of 3K per sq meter, while it can be rent for 500-800 euros per month (depending on neighborhood and amenities), and there are estimates that there is a stock of 200,000 such newbuilt houses for sale in a city of 4-5 million inhabitants. Not the best situation for a RE investor, especially a new entrant.Actually, i have been expecting a strong correction some years now, but so far all i ve seen is a price freeze. The promoted excuse for this is that developers, especially the older ones, are "sitting" on the vast profits they have made over the last decade, and feel no pressure to sell the property at a discount from their demanded prices. The point is for how long they can endure this...Yeah, takes a while for house prices to fall for emotional reasons that don't exist in other asset classes.Apart from the problems in western Europe such as the UK, Ireland, Spain, etc. there are also terrible problems in some Eastern European countries, such as Hungary, where people have taken out loans in Euros but are paid in their local currencies.It is a big mess quite frankly.

QuoteOriginally posted by: penguinaQuoteOriginally posted by: AnthisQuoteOriginally posted by: BullBearcheap? How is it cheap? If the average salary is around €25,000 that would be 8 times the average salary.That is not cheap that is insanely expensive.There are huge property bubbles in various EU countries - some worse than the US.Yes, I agree. There's a huge property bubble in some EU countries.I wasn't saying that the US houses seem cheap in absolute terms. It seems cheap when in comparison (i.e. relative value) with the house prices in some EU countries.Here, in the suburbs of a (near or) non-developed EU country, a flat with 3 bedrooms, 100 sq mt, no condo, an over-crowded suburban area, an increasing crime rate, almost no quality of life near the house (no parks, no condo pool, nothing...) costs around €200k.If you ask me if 200k is cheap? No, no way! It's really expensive. I've searched some houses in the US (detroit, florida, delaware) that are being sold at $200k or less and that seemed to be gorgeous. Some are at $140k... They're expensive but less than in my home town.But there's a huge problem I don't know the US and unemployment is really high. So I'm carefully reading the comments of mackbar, T4A and ppauper regarding this.I would like to thank all of you guys for your comments (special thanks for mackbar and T4A).

QuoteOriginally posted by: AnthisYour argument is pretty valid, on the other hand, prices for this type of house where a live, start at the rate of 3K per sq meter, while it can be rent for 500-800 euros per month (depending on neighborhood and amenities), and there are estimates that there is a stock of 200,000 such newbuilt houses for sale in a city of 4-5 million inhabitants. Not the best situation for a RE investor, especially a new entrant.Actually, i have been expecting a strong correction some years now, but so far all i ve seen is a price freeze. The promoted excuse for this is that developers, especially the older ones, are "sitting" on the vast profits they have made over the last decade, and feel no pressure to sell the property at a discount from their demanded prices. The point is for how long they can endure this...You are right to expect a decline in prices. 300k for something (100 sq m x 3k/sq m) that rents for 500-800/mo represents a PE ratio of 31:1 to 50:1 which seems unsustainably high. The rents don't even cover the cost of capital, let alone repaying the principle, taxes, insurance, maintenance, etc. Although the "promoted excuse" may be right, I'd wager than most developers have rolled most of their profits into more real estate. The developers and stubborn owners may try to hold prices high, but as soon as the weakest developer is forced to sell at more reasonable prices, then the flood will ensue and the "strongest" developers will actually become the greatest fools who are left to sell at the bottom.

Well, you are absolutely right, i think the fun of the party has just begun. Just to add some more info to my argument, this phenomenon has taken place in an economy with >80% homeownership, many times via inheritance or donation (e.g. its a typical wedding gift, from girl's parents usually), foreclosures have been doubled in 08 compared to last year (its possible to acquire some property through foreclosure even at the 1/3 of the market value) , and the quid pro quo for the land owner who allows a developer to built on his plot has raised over the last decade to levels sometimes higher than 50% of the building surface from 25-30% it used to be previously. On the other hand, many parties will be affected adversely from a plummeting of property values. Government (see taxes and sales of public land), Banks (see mortgages and loan collaterals), people that work or make business in the wider constructions sector, and of course homeowners themselves even if the have no plan to sell their property. Some people argue that this is a preventive force for price plummeting, and every piece of property has something unique and rare, but i dont really buy it. The P/E ratios you estimated albeit based on gross earnings, (thus with net earnings the ratios are much higher) reflect a reality. What is a proper level of P/E in your view? Is it a function of long term treasury yields? I mean if the yields are at the neighborhood of 5% any P/E above 20 should indicate overpriced property?Since the E leg cant rise significantly (already rents approach the levels of minimum salaries) the any correction must take place from the P leg in my view....

QuoteOriginally posted by: penguinaYeah, takes a while for house prices to fall for emotional reasons that don't exist in other asset classes.Apart from the problems in western Europe such as the UK, Ireland, Spain, etc. there are also terrible problems in some Eastern European countries, such as Hungary, where people have taken out loans in Euros but are paid in their local currencies.It is a big mess quite frankly.I really doubt there are opportunities in Eastern Europe any more. The only exception is perhaps Albania and Former Yugoslavia. buying property literaly for a chunk of bread in these countries is so 90s.... And in my view big bucks in property investing comes from acquiring distressed property at a fraction of value or speculating in changes in the uses of land (for example buy farm sell it some years later as industrial real estate).

You can't compare the wooden frame of US houses with the concrete/steel frame plus foundation of the south european houses. It's far more expensive and stronger in Europe.

QuoteOriginally posted by: agisdYou can't compare the wooden frame of US houses with the concrete/steel frame plus foundation of the south european houses. It's far more expensive and stronger in Europe.The US houses I've seen so far seemed to provide much more quality of life than the houses in my country...Check this link provided by mackbar and see it with your own eyes coldwellbanker