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DETROIT (Reuters) – In a crowded ballroom next to a bankrupt casino, what remains of the Detroit property market was being picked over by speculators and mostly discarded.
After five hours of calling out a drumbeat of "no bid" for properties listed in an auction book as thick as a city phone directory, the energy of the county auctioneer began to flag.
"OK," he said. "We only have 300 more pages to go."
There was tired laughter from investors ready to roll the dice on a city that has become a symbol of the collapse of the U.S. auto industry, pressures on the industrial middle-class and intractable problems for the urban poor.
On the auction block in Detroit: almost 9,000 homes and lots in various states of abandonment and decay from the tidy owner-occupied to the burned-out shell claimed by squatters.
Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York's Central Park. Total vacant land in Detroit now occupies an area almost the size of Boston, according to a Detroit Free Press estimate.
The tax foreclosure auction by Wayne County authorities also stood as one of the most ambitious one-stop attempts to sell off urban property since the real-estate market collapse.
Despite a minimum bid of $500, less than a fifth of the Detroit land was sold after four days.
The county had no estimate of how much was raised by the auction, a second attempt to sell property that had failed to find buyers for the full amount of back taxes in September.
The unsold parcels add to an expanding ghost town within the once-vibrant town known worldwide as the Motor City.
Just to show you how far home values have declined in some parts of Detroit, here’s an incredible story I came across: I can’t believe this tale about a couple who purchased an abandoned home for $100 with the following unbelievable particulars:
Pricetag for the house: $100. The buyer called a real estate agent with the Department of Housing and Urban Development, who confirmed that bids on the foreclosed property started at $95 for the property, $5 for the house. There were no back taxes — no one seemed to be sure who once owned the house, it had been empty for so long.
“Inspection was fine and the foundation was good,” says the buyer. The inspector also adds: “If you didn’t mind scraping some peeling paint, doing some surface treatments, putting in new utilities, windows and repairing the roof … this could be pretty interesting.”
Our real estate market covers quite a wide spectrum here: from parking lots paved in gold to decrepit homes desperate for some TLC. What a contrast. I do find this to be more of a positive story than anything because of one thing — the fact that if you happen to be a handy do-it-yourself type, you can really snag some great deals at bargain basement prices. If you’re resourceful and don’t mind a fixer upper smack dab in a neighborhood that needs a bit of work and care, you won’t need $300,000 to buy a house in the United States these days. For that kind of money, you can now buy 3,000 houses in Michigan where you can build a whole community with your friends!
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