Saw one of those "life is so unfair, it was easier for our parents, we just want a fair shot" rants on Twitter, someone replied that you can still find cheap houses.

Linked to $50k houses in Michigan.

https://www.realtor.com/realestateandhomes-search/Michigan/type-single-family-home/price-45000-50000

What is the catch? Are these condemned? No job market in the town?

I see one is a trailer, but some of these look like tiny starter homes. Why haven't they been snapped up?

I'd think investors would have bought these by now, even if no one else is interested.

There is two catches to those houses in Michigan. First of all most of them are complete gut/remodel jobs. The second I learned when I looked at a couple a while back is that many of them have significant back taxes owed.

As others have noted, Michigan is a dying market and most of those houses are either (i) in poor condition and/or (ii) in a terrible neighborhood.

I'm confident there are plenty of great deals to be had for rental properties even if you don't build in any (or negative) price appreciate but lots of risk.

If you know the market, can properly evaluate the property condition, and willing to be a bit of a slumlord, go for it (or if your risk appetite is significantly higher than mine and have cash to burn).

because you will likely be burglarized by the poor people all around you?

same with West Virginia- there are some very nice new townhouse communities going up along 340 South to Berryville and WV has the cheapest living of all 50 states

but that's because no one wants to live in West Virginia, the Meth heads and the crime.

plus it's boring as hell.

As others have said, the catch is that you couldn't pay most people to live in some of these areas.

Let alone try to extract $50,000 in cold hard-earned cash out of their pockets in exchange for having to live there.

Some cities like Calvert periodically offer city owned properties for free provided the new owner fixes them up. I always figured someone could live there too while working on the place.

if you want to get into this line-

check out ITALY

you can literally buy a cool fixer upper for ONE EURO!

of course, it will take about $375,000 to rebuild it.

but a lot of Americans and foreigners are doing it.

https://renovita.net/1-euro-houses/renovation-gallery/

The catch is people don't want starter homes anymore. They want move in ready homes with a modern interior.

I don't really believe that home affordability has really outpaced wages as bad as some people tend to believe.

1985
Median household income = $24k a year
Median Home price = 83k
interest rate 12.4%

2025
Median household income = 83k a year
Median Home price = 420k
interest rate 6.8%

So yes the price of homes has gone from 3.5x income to 5x income, but with the interest rates being lower it accounts for a lower percentage of the household income.

A 83k loan at 12.4% would be $880 a month or 44% of the median household income in 1985.
A 420k loan at 6.8% would be $2740 a month or 40% of the median household income in 2025.

I guess maybe insurance, taxes, and utilities might make it harder than before, but when you factor in the actual monthly cost of the mortgage its about the same due to lower interest rates now.

permabull said:

---

The catch is people don't want starter homes anymore. They want move in ready homes with a modern interior.

I don't really believe that home affordability has really outpaced wages as bad as some people tend to believe.

1985
Median household income = $24k a year
Median Home price = 83k
interest rate 12.4%

2025
Median household income = 83k a year
Median Home price = 420k
interest rate 6.8%

So yes the price of homes has gone from 3.5x income to 5x income, but with the interest rates being lower it accounts for a lower percentage of the household income.

A 83k loan at 12.4% would be $880 a month or 44% of the median household income in 1985.
A 420k loan at 6.8% would be $2740 a month or 40% of the median household income in 2025.

I guess maybe insurance, taxes, and utilities might make it harder than before, but when you factor in the actual monthly cost of the mortgage its about the same due to lower interest rates now.

---

100% the MI&U on the 2025 house is going to kill you. While you're correct the P&I is about the same, relative, everything else is much higher. So you end up being house poor.

~egon

I hope this is still around when I retire.