Buyers flock Detroit
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AP
Oluşturulma Tarihi: Mart 11, 2009 00:00
DETROIT - Property investors from all over the world flock Detroit. That’s because foreclosures in the city create what one real estate agent calls ’an investors' dream.’ The city offers opportunities to buy homes under $10,000. In extreme cases, homes are on sale for $1.
Welcome to Landlord Nation, where foreclosure notices are plentiful and for-sale signs offer at least 1,800 homes for under $10,000 that once were worth at least 10 times more.
In extreme cases, homes are on sale for $1 or less, which has enticed investors to Detroit from as far away as the United Kingdom and Australia.
"In the past few months, I've picked up 10 new clients from out of state that are buying in bulk," said Mike Shannon, a suburban Detroit real estate agent. His office specializes in foreclosures in a city that's among the national leaders.
Despite a stagnant retail housing market, real estate sales of foreclosed homes are booming. Shannon regularly fields calls from eager prospects, and recently sold 30 homes in one day to one buyer. A trio of U.K. investors has bought a half-dozen and plans many more.
"I thought it would be quite good fun to have a look," said Darren Veness, who lives near Brighton, England.
Outside buyers are the latest in a long line of landlords taking over the deteriorating housing stock of a city that because of its once mighty auto industry boasted one of the highest owner-occupied housing rates in the U.S. And unlike many large cities, Detroit's single-family homes dominate its landscape, not high-rise apartment buildings.
The outside investors aren't only interested in Detroit, but it's been targeted because of the sheer volume of homes and the fact that values have fallen so much more than elsewhere.
Even the sale of U.S. Housing and Urban Development homes has been impacted by the poor housing climate in Detroit. The average sales prices of such homes plunged from $46,702 in 2003 to $8,692 last year. Through the first month of 2009, average sales were $6,035.
Still, not all of Detroit's real estate market has bottomed out. Listings include a seven-bedroom, 11,580-square-foot Tudor in Detroit's historic Indian Village neighborhood for $849,900, and a $765,000 penthouse condo in the city's Albert Kahn Building. What's the effect on a city whose population has plummeted to half its size since the 1950s with no sign of return? The winners might be the renters lucky enough to live in a home that's been fixed up by a legitimate landlord. The losers might be those who end up in less reputable hands.
The stakes could go either way for the landlords arriving in a market that may not have found its bottom. Same for the dwindling number of neighbors who still own their homes - they could benefit from having the vacant home fixed up and occupied but likely will find theirs will fetch a fraction of what they paid or owe.
The once-stable neighborhood of well-tended brick homes on Detroit's northwest side has some with brick paver driveways and front walks, trimmed bushes and new windows. But foreclosures are creating what Shannon calls "an investors' dream." These are not the infamous $1 homes, but well-built structures falling on hard times that are available for under $10,000.
In extreme cases, homes are on sale for $1 or less, which has enticed investors to Detroit from as far away as the United Kingdom and Australia.
"In the past few months, I've picked up 10 new clients from out of state that are buying in bulk," said Mike Shannon, a suburban Detroit real estate agent. His office specializes in foreclosures in a city that's among the national leaders.
Despite a stagnant retail housing market, real estate sales of foreclosed homes are booming. Shannon regularly fields calls from eager prospects, and recently sold 30 homes in one day to one buyer. A trio of U.K. investors has bought a half-dozen and plans many more.
"I thought it would be quite good fun to have a look," said Darren Veness, who lives near Brighton, England.
Outside buyers are the latest in a long line of landlords taking over the deteriorating housing stock of a city that because of its once mighty auto industry boasted one of the highest owner-occupied housing rates in the U.S. And unlike many large cities, Detroit's single-family homes dominate its landscape, not high-rise apartment buildings.
The outside investors aren't only interested in Detroit, but it's been targeted because of the sheer volume of homes and the fact that values have fallen so much more than elsewhere.
Even the sale of U.S. Housing and Urban Development homes has been impacted by the poor housing climate in Detroit. The average sales prices of such homes plunged from $46,702 in 2003 to $8,692 last year. Through the first month of 2009, average sales were $6,035.
Still, not all of Detroit's real estate market has bottomed out. Listings include a seven-bedroom, 11,580-square-foot Tudor in Detroit's historic Indian Village neighborhood for $849,900, and a $765,000 penthouse condo in the city's Albert Kahn Building. What's the effect on a city whose population has plummeted to half its size since the 1950s with no sign of return? The winners might be the renters lucky enough to live in a home that's been fixed up by a legitimate landlord. The losers might be those who end up in less reputable hands.
The stakes could go either way for the landlords arriving in a market that may not have found its bottom. Same for the dwindling number of neighbors who still own their homes - they could benefit from having the vacant home fixed up and occupied but likely will find theirs will fetch a fraction of what they paid or owe.
The once-stable neighborhood of well-tended brick homes on Detroit's northwest side has some with brick paver driveways and front walks, trimmed bushes and new windows. But foreclosures are creating what Shannon calls "an investors' dream." These are not the infamous $1 homes, but well-built structures falling on hard times that are available for under $10,000.