Detroit Houses = $1
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 probably be best summed up as racist or ignorant. I will assume the former.
-Nick
>
Actually, its neither.
People have tried to take me to task whenever 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."
I'm sorry Nick, but unfortunately, this is not a joke: I first mentioned this back in February, when realtor.com had a huge run of houses for sale in the Detroit area for $100.
Today?
There are 182 Properties for sales for less than $1,000 on Realtor.com/search -- and the asking price on some of those houses is one dollar:
>
Thanks for the suggestion Nick -- I never would have thought of updating this if it wasn't for you!
Median House Price: Detroit MI
Wednesday, August 13, 2008 | 05:36 PM | Permalink
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I've been skeptical about all the bottom callers in the stock market, and what that portends for stock prices. In this case, though, I'm willing to go out on a limb and state that I think, at the very least, a bottom is forming in Detroit residential prices. Although we could stay at these levels for a while, I do not see prices going much lower from here. Of course, if you buy at the ask, you could still lose one hundred percent of your investment.
Posted by: Scott Frew | Aug 13, 2008 5:53:44 PM
Isn't the $1 list price usually indicative of some sort of an auction about to take place?
Posted by: Jeff | Aug 13, 2008 5:55:59 PM
Don't forget that there could be tax liens on the property too or penalties because the place is in violation of new anti-foreclosusre ugly house laws. So, one could buy it and then owe more. These houses are less than zero. There are times when the city bulldozers the house because its such a nuisance. No shit. Its happened to a few lenders.
Posted by: johnnyvee | Aug 13, 2008 6:06:05 PM
I love the default to racism... Maybe Nick has some issues of his own cause that's a pretty shitty null hypothesis...
...................
Posted by: nades | Aug 13, 2008 6:08:11 PM
I can come up with the scratch for a 10% down payment. Anybody got a mortgage calculator? What's the monthly nut on a 30 year fixed? Do I qualify for the $7500 tax credit in the new housiing/economic recovery act?
Posted by: Scott Frew | Aug 13, 2008 6:19:54 PM
Nick:
Grow a nutsack and take a joke for what its worth. I'm sure that you didn't put up this much of a fuss when your used house salesman told you that housing never goes down.
Posted by: OCDEVIL | Aug 13, 2008 7:00:12 PM
The $1 house menu, courtesy of Chef Bernanke (hat tip to Lew Rockwell blog):
Foreclosure Fallout: Houses go for a $1
Posted by: Franz | Aug 13, 2008 7:16:18 PM
And the winner of the "ignorant racist" contest is... Nick.
Nice going, Nick! Well done, please play again!
Then again, maybe I'm being to hard on Nick - after all, $1 *isn't* the same as $0, and that was his contention... Or perhaps he thinks that almost 200 currently listed properties is "rare"?
Sure hope he comes on here and lets us know.
Or, you know, apologizes. Publicly. With shame in his voice.
That'd be nice, too.
Posted by: Jim D | Aug 13, 2008 7:21:54 PM
Any chance I can get an interest-only option ARM on one of these properties?
Posted by: Jeff | Aug 13, 2008 7:22:28 PM
The house on Tuller is actually $2500. Seller will not bring any money to close. Buyer must bring $2500 to close transaction.
The $1 price is a bit misleading.
Posted by: alan | Aug 13, 2008 7:35:27 PM
I think Nick is likely a child molester. Maybe a serial killer. Like Nick, I don't need any actual evidence to make these accusations.
Posted by: E | Aug 13, 2008 7:40:03 PM
Many homes in Detroit were clearly worth less than $1.00, as evidenced by their long term vacancy, and subsequent torching on Devil's night. While this has declined in recent years, I have it on good authority that "house burning parties" are still held from time to time.
There are whole sections of the city that have been devoid of residents for so many years, the wild-life is coming back. See this post on the "Detroit Pheasants":
http://www.nodakoutdoors.com/forums/viewtopic.php?t=44710
Police protection for a large swath of residential areas is non-existent. Police figure if you are stupid enough to buy in certain areas, you get what you deserve. The schools? Please.
The price of a house is appropriately zero if the area is uninhabitable. That is...if you aren't a pheasant!
Only the most bigoted would think that these acute urban problems are solvable by attacking those that point out such abysmal real estate prices and living conditions.
A progressive person would have something positive to say in response to such claims, or would be able to point to some positive actions being taken to change things.
I will assume that Nick is the former.
Posted by: Alex | Aug 13, 2008 8:24:09 PM
So if I have 3.5 cents I can get a FNM backed conforming mortgage on one of these beauties?
Posted by: Eric Sebille | Aug 13, 2008 8:46:25 PM
$1 Houses! Ted Turner and nouveau uber millionare Al Gore should be buying up the property in Michigan so that it can be returned to wilderness.
Posted by: joebek | Aug 13, 2008 8:51:32 PM
Nick is enlightened, and probably washes his Prius every night. After all, if his neighbors would just listen to him, the world would be a better place. Color him clueless.
Posted by: Innocent Bystander | Aug 13, 2008 8:56:40 PM
Hm. I wonder if there are any complete city blocks full of $1 houses, that could be bought up, knocked down, and the land used to build a (well-secured!) estate...
Not good if you're planning to have kids, I guess, but ideal for the budding Batman looking for a place to build stately Wayne Manor.
Posted by: Jon H | Aug 13, 2008 9:38:53 PM
Detroit's not a bad place. We've got a beautiful downtown.
And the housing is affordable (-; Our mayor is in trouble, mainly for lying about sexual indiscretions. But the system is reacting properly and nobody is defending the mayor, so he will be on his way out soon. Our country should be so fortunate...
Posted by: Detroit Dan | Aug 13, 2008 9:47:54 PM
Wow, what a charitable guy...'I'll assume the former'.
Gee, bud, get much mileage by slinging around the 'racist' slur?
Sure yeah, commentary on house prices that isn't supportive of one's view point automatically = racism. Sure, I get that, sure... as Jon Stewart says... go on...
Posted by: VoiceFromTheWilderness | Aug 13, 2008 9:51:05 PM
I'll buy a house in DEtroit - if they pay me; say now taxes, no fees, no assessments. Otherwise the risks for such a relo are far too high.
Rust belt be-gone.
Seriously tho, I think the US majors have done a dis-service to DEtroit and the US. Not enough forward thinking and Mgmt. too damn arrogant to see the forest for the trees. And, Unions who have a sense of entitlement for a simple paycheck.
Note to self, reduce the MBA hiring of Minie-Mees and explore more creative talent to get the job done and send as broadcast email announcing the formation of a Union and anyone can join and get a higher wage but forgo all future bonuses.
Posted by: Barley | Aug 13, 2008 10:14:29 PM
Hats off, Barry! Speaking from personal experience, I have to say that there's nothing quite like seeing the skillful and effective public presentation of objective, real-life data fly directly in the face of a race-baiting twit that fully refutes whatever clueless observation or assertion they may have made.
Some days, blogging's just a lot more fun than others....
Posted by: Ironman | Aug 13, 2008 10:27:04 PM
I'm willing to bet large that Nick is a Lib or a college professor, but I repeat myself.
Posted by: Nunca | Aug 13, 2008 10:46:11 PM
It's a short step from a one dollar house to "we'll pay YOU to live amongst the shittiest of shitheads this shitty planet can provide"
...A close second is "we'll pay you a million dollars, but first you must spend the night in this creepy haunted mansion....unless you're prejudiced against ghosts"
Posted by: brion | Aug 14, 2008 3:11:04 AM
If I ever come to America I'm going to visit Detroit to see these houses. They are some how so symbolic. They are so sad. Many were grand houses in presumably leafy suburbs.
They are almost like organic Inca ruins. I hope they don't portend a similar fate for us.
Posted by: simon | Aug 14, 2008 4:45:14 AM
Anyone thought of buying these houses for $1, then stripping what ever can be stripped and selling it of on eBay? (I'm thinking sinks, pipes, any whiteware left etc).
Take a leaf from the 80's corporate raiders playbook - cut it up and sell it in pieces.
Posted by: Wille | Aug 14, 2008 6:28:57 AM
To some people everything has a racial connotation, Nick is clearly one of them. Most of them are totally humorless alas. The more serious downside of this sort of over reactive idiocy is that it provides fodder for those interested in promoting racially divisive politics to poke fun at what are often substantive issues of discrimination and disadvantage. Grow up Nick you sounded like jerk.
Posted by: John | Aug 14, 2008 8:16:00 AM
