Detroit Housing = ~$0
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 . . .
click for more listings
Detroit, MI Property Listings
NATIONAL ASSOCIATION OF REALTORS
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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
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
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