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Tough talk on all things housing -- booms, busts, bargains and more -- from "Nightline" correspondent Vicki Mabrey

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The Hidden Costs of Homeownership

November 21, 2008 12:53 PM

In our Odell Barnes piece Tuesday night on Nightline, we showed pictures of a variety of houses.  Tiny neat bungalows... a lovely brick cottage... a moderate-sized brick tudor... and a beautiful salmon-colored brick colonial, measuring 5,000 square feet, that is vacant and has been reduced to $99,900.  I don't live in Detroit but when I see houses like that, at the prices they're going for these days, I think about buying and visiting on weekends.  I mean, who doesn't dream of owning something that grand!  Especially when you live in a New York apartment. 

But then reality sets in.  The taxes on that house are an OUTRAGEOUS $32,000.  Yes, you read that right.  And that's per year.  I checked taxes on other foreclosed homes in the same neighborhood (some larger, some slightly smaller), and they're a fraction of that.  Still high, but lower.  Say, $10,000 to $15,000.  The city must have made a mistake on this one.  But potential buyers learn they have to buy it, then fight City Hall.  So far, none has been willing to take that on.  Who does the city think is going to buy first, then ask the $32,000 question later?  The city has to make taxes in the Palmer Woods neighborhood, where that house is located, more equitable.  If they want professionals to come back to the city and buy up these amazing houses, they have to make it affordable.  Otherwise, they're taxing people out of town. 

But I digress.  Being as how that house is in Detroit, and Detroit is very cold, think of the heating costs: $$$$$.

The house looks like it was built in the '20s or '30s, so it will require updates and maintenance: $$$$$. 

It's also on a large lot -- think lawn care:  $$$$$. 

It has a three-car garage with what looks to be an apartment above it.  More $$$$.   That's when the dream hits reality.

So if those of you who wrote in also are fantasizing about owning a manse like that, snap back to reality before plunking down your money.  For those who watched and dreamed of something more modest, more like the size of the homes Odell Barnes gets in his inventories, good things may indeed come in small packages. 

November 21, 2008 | Permalink | User Comments (5)

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Posted by: angelic | Nov 21, 2008 4:29:02 PM

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Posted by: doctor a ayesh | Nov 21, 2008 5:09:04 PM

Thank you for advising us of the considerations we need to realize when thinking of purchasing these homes. I am a first time homebuyer that is very interested in buying a home at these lower prices, but I am not green enough to not do my research!

Posted by: Its A First Time For Everything | Nov 21, 2008 7:33:52 PM

Has Mr Barnes Odell purchase any homes in Omaha Ne? If not does he plain to, I need a Home and this offer seem to be a good way for me to purchase one

Posted by: D Wheeler | Nov 23, 2008 3:36:29 PM

I saw the segment on Tuesday and was amazed at how Mr.Odell is doing a wonderful job with this housing crisis. I am interested in buying a house. My credit is less than perfect. I make a decent salary,but have no way of making the dream of mines come true. I live in Florida where they are turning majority of the rental apartments into condos and I having to rent out my friends condo and paying rent $1250 a month. I feel like I am paying a mortgage that does not belongs to me. Mr. Odell do you have any advice or do you have any homes you are purchasing in the Miami area? Please help
Thanks

Posted by: Mirlene | Nov 24, 2008 3:11:54 PM

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