that's an astonishing number: for a minute, i assumed you were going to reveal to us that you were quoting from a depression-era newspaper.

the median is under $10K? even if all 37% of the houses sold at foreclosure went for $1, that still leaves another 13% to be under $10K.

amazing.

Howard: yes, it just stunned me when I saw it. -- The article also reports that the median price for the whole Detroit metro area is $85,000. I checked the median home price for the wider Baltimore area; it's 296K. (Baltimore city: a bit over 170K. I live in Baltimore.)

I knew that Michigan was in a world of hurt. This just brought it home.

I looked at the whole article, and it doesn't look like all doom and gloom; it says there's a lot of investor activity at the low end of the market. Owners of $75K houses are not finding buyers, but $9K houses are moving quickly. The number of sales in the city is way up, in fact.

I couldn't tell from the article what it all means, but it seems that a lot of low-end sales would be at least a bit better than no sales at all, right?

Howard: yes, it just stunned me when I saw it. -- The article also reports that the median price for the whole Detroit metro area is $85,000. I checked the median home price for the wider Baltimore area; it's 296K. (Baltimore city: a bit over 170K. I live in Baltimore.) Posted by: hilzoy

This doesn't make sense. If you are sure that the median house price in Detroit metro is $85K, shouldn't that condo price, presumably some being in nicer highrise buildings downtown, be $92K, which is still really low in a major metropolitan area?

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080813/METRO/808130360/&imw=Y

When I went to college in Detroit in the late 80s, we heard about how the city used to sell abandoned houses for a buck. Now banks are doing it.

The house in the above article cost $10K in fees for the bank to sell it for a dollar. Guess they're feeling pretty stupid about foreclosing on the owners now.

This doesn't make sense.Yes, it does.

If you are sure that the median house price in Detroit metro is $85K, shouldn't that condo price, presumably some being in nicer highrise buildings downtown, be $92K, which is still really low in a major metropolitan area?

You seem to missing the distinction between the whole Detroit metro area (where the $85K comes from, representing home -- house or condo -- prices), and the city of Detroit (which is where the $9,250 comes from, also for homes -- houses or condos). You seem to mistakenly think that the former is for houses and the latter for condos, and that they are both for the same geographic area, and so assumed that the latter must be an order of magnitude higher than reported. Or something like that. In any case, you seem to have completely misunderstood: the median home sale price for the city of Detroit is $9,250, that for metro Detroit is $85K, both are significantly down from last year, and both sets of figures include houses and condos within the definition of "home".

In the Nineties there were articles about dying communities in western prairie communities that offered abandoned homes to homesteaders for modest improvements over establihed time frames. Detroit might want to look into that.

These prices are below the materials cost to build a structure of vary modest proportions much less buy the land and pay for the labor to construct it.

If housing prices in Detroit fall just a little bit further, they'll be giving them away for free.

Wow. Just wow.

That can't be true. Something's wrong here.

Ever since the white flight of the 60s and 70s, Detroit the city has been a special case. In the late 80s, Henry Ford's mansion changed hands for something like $160K. For the longest time, even post-CRA, much of the city was effectively redlined by both banks and insurance companies, so that you couldn't buy a house if you weren't paying cash, and you couldn't get back the cost of making improvements. So there was/is a huge overhang of low-price housing stock.

Add to that the fears about the future of the auto industry, and you don't have a lot of people who want to live in Detroit...

You seem to missing the distinction between the whole Detroit metro area (where the $85K comes from, representing home -- house or condo -- prices), and the city of Detroit (which is where the $9,250 comes from, also for homes -- houses or condos). Posted by: cmdicely

I went on line and checked a couple of RE web sites. Prices ranged in DT Detroit (same zip code) from $100.00 for an abandoned house of less than 1,000SF to $1.5 million for a high rise condo. Move out to the suburbs, and the prices were from $75K up. In most cases though, these houses are dinky - 850SF, 1,200SF, 1,300SF. Like everywhere, it really depends on the location.

This is a representative offering.

http://preview.tinyurl.com/43ovk3

What is so utterly stupid about all this is that had the banks switch many of the borrowers into conventional 30-year fixed mortgages there would have been a lot fewer defaults.

http://mjperry.blogspot.com/2008/07/yikes-avg-detroit-home-price-falls.html

This article talks about an average price of around $19,000. Still, almost unbelievable.

Buy one, get one free!!

I lived in the greater Detroit area for most of my adult life, from the mid 60s through 2000, with a few years in Flint and Grand Rapids.

The underlying fact is that the city of Detroit never recovered from the riots and the effects of many years of poor governance. Today vast areas of the city are still vacant lots left from houses razed (many years later) after the riots. For years after the riots, many burned out homes stood rotting.

The Detroit suburbs still are relatively healthy, but the city has been dying a protracted and painful death for nearly 50 years.

The home price cited isn't a surprise to me.

you don't want to know what i bought my west los angeles condo for.

You can actually buy a condo for $10k somewhere in the USA?; has to be a typo

This current economic crisis is preventing us from looking out at the larger crises that are coming our way. These include fossil fuel depletion, climate change, economic globalization, and the fact that planet earth simply cannot support 6.5 billion people in the style in which we live. Consider our use of oil alone. We consume 25% of the supply with only 5% of the population. No way can production be ramped up four-fold, or even two-fold. And we're running out of the stuff on top of that.

This means, as developing nations grow and consume ever more of our precious natural resources, which are already being depleted at an alarming rate - some, including T. Boone Pickens, think we've already hit peak oil, for example -
that something's really got to give, because the doors are all open now, as corporations seek out the cheapest labor and cost of materials. And it's our standard of living that's going to give, along with the other advanced nations.

There's no way out of it. And nobody's talking about it. Ironically, this smaller disaster is but a harbinger of things to come.

wow..

Here's an actual house in Detroit for $4900.. granted it's 1k sq feet, foreclosed, and built in 1912, but still..

http://www.zillow.com/homedetails/1405-N-Green-St-Detroit-MI-48209/62337165_zpid

Foreclosed homes are going for less than half price in the Detroit suburbs...

Anyway, there's a lot of reasons why prices are so low..Google "MCA" and "fraud" and you'll find some severe over-appraisal and mortgage fraud; the taxes you pay if you live or work in the city get you very little...the schools suck, public services are sketchy, and the abject poverty breeds crime and apathy. The city government is barely functional, and people generally dont go downtown unless there's a specific reason to.

Even if people are buying up these homes at fire-sale prices, they are gonna have a hard time moving any but the best of them.

It's not all bad; Eastern Market is cool, as is the DIA area, Mexicantown, Greektown, etc. But most people just dont want to live there.

I think the term "homesteading" applies.

If you take this home, fix it and pay taxes for three years, it's yours.

It's odd, isn't it, how the whole investment mentality distorts and fights against common sense economics? How can it be intrinsically worse (on average for society as a whole) for something people need to to *cost less*? It should be better for anything to be cheaper, under a "real" oriented economy. But people have gotten so used to the idea of, and investment in, the whole speculative regime of buying something so it can be sold for more later, ironically "making" money off of doing no real work (real work means producing new value, not increasing the apparent "value" (merely, purchase price that can be attained) of existing things through increased demand.)

Yet conservatives love that way to make money, want to tax it less than real work, their newsletters are full of advice on how to make money from financial fiddling and other activities that are totally worthless to net gain.

tyrannogenius

Anyone that is shocked by the low prices of houses in Detroit is completely out of touch with the working class. I've been saying for years that the industrial economy never really recovered from the 1970s shocks of Volcker's high interest rates, oil embargo, and Reagan's free trade. If new car sales were at the same per capita level as the 1960s, there would be over 20 million new cars sold each year. Instead, the U.S. has plateaued at 16 million to 17 million.

I dare you to go spend a weekend walking and driving around in former industrial towns like Zanesville, Ohio or Cumberland Maryland. There are lots of parts of the U.S. that look a lot like a third world country.

Wow: here's one for $749.

Zillow listings for Detroit generally here.

Are you sure there isn't a misplaced decimal point there? Remember, we're talking about the Detroit Fish Wrap. 210,000 to 90,000 would sound more like it.

George on October 15, 2008 at 7:27 PM wrote:
These prices are below the materials cost to build a structure of vary modest proportions much less buy the land and pay for the labor to construct it.

If it's anything like Slavic Village in Cleveland, some of these smaller homes going for under $1000 may have been stripped clean of wiring and copper piping, maybe other valuable components leaving a shell of a house good for little more than demolition. The 1000 dollars is the start of what you'll pay. You'll need to cover property taxes, transfer taxes, title fees, demolition, haul-away, and reconstruction.

The city might do well to soak up a few of these and put up park equipment to improve the neighborhoods so remaining homes are more attractive. Maybe demolish them and cover the wreckage with fill dirt? Sell half lots to the adjacent homes for $500? Probably a great investment in the long run.

It's not just Detroit. Take a look at Buffalo, New York. In the Broadway-Fillmore district, houses sold recently for under $4000, about $2 a square foot. Mindboggling to someone living in California.

They already are giving them away for free -- well, $1.00 -- in Detroit. At a panel of metro Detroit REO (bank-owned) Realtors last week, all panelists agreed that the banks they represent have begun giving houses to non-profits when the broker price opinion gets sufficiently low.

If the Republicans had pulled a Willie Horton ad campaign by emphasizing Detroit's governance over and over, it would have been pretty scary. I guess that would be too racist by common standards nowadays, so that's a plus.

The median numbers refer to sales, to total housing stock. Thus, in the richer, northern suburbs (Livingston, Oakland counties, in particular), median housing values are higher, but with fewer sales. This accounts for the skewing downward.

The Detroit suburbs still are relatively healthy, but the city has been dying a protracted and painful death for nearly 50 years.

I think msmolly has it right. My only visit to Detroit was in 2005. At that time, the vacated Tiger Stadium was sheathed with a prophylactic enclosure, and the train station, abandoned since the 1970s, was a pigeon roost with no remaining windows intact. It simply appeared that in-town real estate in Detroit had little or no value. And things in 2005 looked better economically than they do today.

What you say about many houses being stripped of copper etc is utterly true -- there are fairly regular incidences of homeless people who have electrocuted themselves trying to scavenge metals. There is very little metal left in any non-occupied structure within the city limits.

This is the most eye-opening statistic I have read in years. It will stay with me for a long time.

After the initial shock, a couple questions:

* Have there been any attempts at gentrification, either residentially or commercially? Hell, for a few hundred thousand you could practically create your own gated community.

* Has anyone tried empowerment zones (with tax breaks for businesses)? Or *anything*?

I hadn't realized we had simply lost an entire major U.S. city.

I think it some weird statistic. Houses in Detroit are just not selling.

To get a good home in the city of Detroit you need to spend $70k plus. Since the crash you can buy former auto exec mansions for $150k - $250k, houses that were over a half million at the start of this millenium.

Those houses that are under 1K or 10K, well, you would need to be quite savvy to make that investment. Savvy about Detroit. Where there is abject poverty, there is a quiet rage. The resentment is palpable. Things shift from area to area, there are many universes here, Detroit is 35 sq miles. Some of those houses are in areas that have been "project" type areas. One of the links above was in Del Ray, look it up, worst neighborhood in America. At least by smell and pollution / respiratory damage.

At least add to the cost of one those places 24 hour security until the spot is rebuilt. 10 foot fences and good lighting will take care of most issues, but without observation, there go your windows, your copper wiring and pipes, etc. Houses get stripped as fast as they are rebuilt. People do not scavenge from where people actually live though.

Detroit has so many years of corruption that you would want to test your soil and house for every known pollutant. Toxic waste & medical waste has been stored / dumped in many run down looking residential areas, increasing the danger from typical street stuff to something much longer lasting.

There are still some great neighborhoods in Detroit, Corktown and Mexicantown come to mind. There are so many gorgeous old houses that need some love. At some point it will become advantageous to enterprise to use all of Detroit's natural resources. And the next generation will be totally over the Riot and the fear (white flight, race war). Then these areas could actually become something.

BMG