Detroit Housing = ~$0
Astounding:
People have tried to take me to task when I differentiate between stocks and houses. The half joking quote is "The difference between stocks and houses is, outside of Love Canal & Detroit, houses don't go to zero."
As you can see from the attached web page listings, that is only the slightest of exaggeration, as there are quite a few house in Detroit for sale at $100 each.
And, if you search for $0 - $5,000 price range in Detroit, MI, you will find 1,397 properties in that range, out of 20,881 properties for sale.
Why is "zero" only a sleight exaggeration? Renting an apartment (no property tax, no maintenance obligations, no heating costs) is cheaper in Detroit than owning a home -- even one that costs $100 . . .
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click for more listings
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Thanks, Pete!
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Source:
Detroit, MI Property Listings
NATIONAL ASSOCIATION OF REALTORS
Realtor.com
http://www.realtor.com/search/searchresults.aspx?ctid=2959&ml=3&mxp=5&typ=7
Wednesday, February 27, 2008 | 01:51 PM | Permalink
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» Detroit Houses = $1 from The Big Picture
I listened to your interview with Aaron Task today. While I can agree with your thesis, I did not care for the Love Canal-Detroit comment. Houses in the city of Detroit rarely go to $0 and certainly have some value to someone. This unfunny remark can p... [Read More]
Tracked on Aug 13, 2008 5:42:55 PM
Comments
Unlike a stock, a house can be worth less than zero. If the home becomes uninhabitable (as I suspect those listed in the piece are), utility is zero while carry costs continue, and demolition and remediation costs may exceed land value. It eventually happens in many one-industry and resource towns.
Maybe Detroit is just be a large version of a typical shut-mine ghost town.
Posted by: Estragon | Feb 27, 2008 2:09:40 PM
Sorry to be OT, but you all will LOVE this Nixon video.
http://www.youtube.com/watch?v=iRzr1QU6K1o
Posted by: karen | Feb 27, 2008 2:13:12 PM
Notice that several of the listings require pre-approval of funds.
A pre-approval for a $100.00 house.
Posted by: Scribe | Feb 27, 2008 2:13:17 PM
Wow
Posted by: Bob A | Feb 27, 2008 2:26:38 PM
What is missing in that is the
"buy it now" button
ala Ebay....
Ciao
MS
Posted by: Michael Schumacher | Feb 27, 2008 2:46:19 PM
I noticed on one of the houses the 'owner' stated he would consider donating to charity.
Why doesn't Habitat For Humanity modify their charter to include rehabs? J.C. and his followers could swarm in with tons of decon and duct tape and make a real difference. It would also be of help to the hood.
Posted by: Ross | Feb 27, 2008 2:46:20 PM
Barry,
I found a 30-year mortgage for one of these places. They will allow a 3% down payment, $3, which means the monthly nut will be .83 cents. Unfortunately, the mortgage insurance to make sure I don't default runs $45 a month until I hit the 20% equity threshold. I for one sure can't afford $45.83 a month.
Posted by: Kevin Depew | Feb 27, 2008 2:47:03 PM
Location, Location, Location...
Posted by: Don | Feb 27, 2008 3:18:54 PM
On the first page - the one for $399...does it come with the car? :D
Seriously speaking, $1250 selling agent commission on a $399 house...and for a right disaster (*cough*..."fair condition" in realtor speak). Wow...
At least they're trying to get people pre-qualified now.
Posted by: DT | Feb 27, 2008 3:20:01 PM
Oh jesus, killing myself here. Check out that first one for $100. It's been gutted by fire and the description is listing room dimensions. Master bedroom 10 x 10... what master bedroom??? It's gone up in flames...my side hurts... LOL One full bathroom. .. LOL did have one full bathroom more like it... The description of the properties are utterly ridiculous, not just for this one. Talk about lipstick on a pig...oh damn...
Posted by: stuart | Feb 27, 2008 3:20:26 PM
KNOW OFFER TURNED DOWN ON THIS 3 BEDRM HOME WITH A LARGE LR & DR AREA,
On the $400 one:
They abbreviate every other word, but use more letters to misuse 'no'
Posted by: Joe | Feb 27, 2008 3:41:29 PM
You know your dealing with a sophisticated seller, when they have "singed addendums".
Posted by: BCS | Feb 27, 2008 3:54:24 PM
FYI,
The sales info for the 2nd house pictured (Radcliffe St) is below. It was a $110K house two years ago.
Sales Information
5 sale record(s) found.
Sale Date Sale Price Instrument Grantor Grantee Terms Of Sale Liber/Page
05/11/2007 $1,000.00 PTA WAYNE COUNTY TREASURER ROGERS, GREGORY NQ
10/19/2006 $104,786.74 PTA WAYNE COUNTY SHERIFF BANK OF NEW YORK AS TRUSTEE SHERIFF/TAX DEED
10/07/2005 $110,000.00 WD ISAAC, CHERYL J COX, DANIEL ARMS LENGTH
04/01/1988 $3,550.00 PTA NQ 23744:02180
08/01/1970 $14,000.00 WD ARMS LENGTH 00057:09280
Posted by: Scribe | Feb 27, 2008 3:58:05 PM
30 year fixed rate or Zero down ARM?
Posted by: Lars | Feb 27, 2008 4:09:21 PM
Awesome...now i know where to go after i only have about $200 left in my checking account.
Posted by: TheDeathStar | Feb 27, 2008 4:12:13 PM
BCS
I know what singed addendums feel like. Got mine in 68 over Uncle Ho's residence.
Posted by: Ross | Feb 27, 2008 4:13:09 PM
One one hand, they look a little like fixer uppers. Some might need a little work here and there. But, a little paint and some curtains, a comfortable chair, a good tv and a satellite dish and anywhere could be a castle. Buy 2, one for you and one for your car.
Maybe those poor homeless sex offenders in Florida who live under bridges could get bus tickets and 5 $20s each. Two problems get solved at once.
Now, here's one problem. What if they don't appraise out or what if the payday loan people can't sell the paper if they buyer defaults? I wonder what these are valued at in the tranches? Probably only Kreskin or Criswell knows.
Posted by: cinefoz | Feb 27, 2008 4:17:34 PM
12387 Lorreto looks like an interesting property. Sales price is $400. or $2.00 per month. A better picture shows the second floor outside had caught FIRE. This is the first sign of a recovery, affordable prices.
Posted by: Street Creds | Feb 27, 2008 4:20:17 PM
This land is your land, this land is my land.
Posted by: JudgeJudy | Feb 27, 2008 4:22:11 PM
Obviously, bashing Detroit doesn't take a lot of imagination. It's been a pathetic shame for decades, and continues to be one.
But one shouldn't be too smug about this sort of thing. It could easily be that Motown is just ahead of the curve on this. Any number of crappy post-manufacturing, post-textile cities throughout the rust belt and rural-ish south are likely to have similar problems.
Housing bubble exurbia isn't looking great either. Too many houses, not enough jobs, 90 mile commutes, and a high number of houses owned by negligent banks isn't the stuff of great neighborhoods.
Posted by: alexp | Feb 27, 2008 4:27:16 PM
I have to change my moniker. There's another "Don" posting here--"location,location,location" was his previous.
These houses look like houses for bears that Goldilocks might visit.
Seriously, my little hometown (Birmingham)is experiencing a car-building economic boom. It is the anti-Detroit for now. I wonder where that leaves us in 30 years.
Posted by: DonKei | Feb 27, 2008 4:36:50 PM
Heck, if Uncle Sam will bump up
my tax "rebate" check from $300 to $600,
I could afford to buy one of the "upscale"
$500 starter homes.....
Posted by: MarkTX | Feb 27, 2008 4:39:56 PM
Durable Goods and New Home sales sucked. Fannie Mae sucked. Plus all of the economic releases yesterday sucked... and the market breaks UP, on a technical break of a Triangle formation.
Check out these simply insane facts, figures and charts.
Posted by: TheFinancialNinja | Feb 27, 2008 4:42:29 PM
This is happening now, and will happen everywhere in the industrial Northeast as well. Cities like Schenectady and Buffalo NY have tons of housing which nobody needs or wants anymore, and will have to be bulldozed in many cases.
Even apparently healthy places like Massachusetts will suffer this fate, as the manufacturing infrastructure is abandoned and/or recylced. The future of many of these areas is not too bright with an economy in full recession- or of course worse.
Posted by: Paul in NYC | Feb 27, 2008 4:56:58 PM
The house at 7727 RADCLIFFE ST has SINGED ADDENDUMS.
That's what happens when you let your addendums get too close to the fire.
Posted by: Marcus Aurelius | Feb 27, 2008 4:58:40 PM
