Only in Detroit: couple buys first home for $100
Housing prices here have crashed along with the automotive economy. This piece in the Detroit Free Press, focuses on a young couple who bought a Detroit house for $100 and are hoping to renovate and make it their home. Like so many others in the city, the property has been stripped of everything that could be resold, including all the metal and any woodwork with character. But it apparently hasn't been burned to the ground and the location is promising – Banglatown – on the edge of Hamtramck, a separate city within the borders of Detroit whose long-time residents, mostly Poles and Ukrainians, as well as Asian newcomers, have prevented the decline found elsewhere.
Like lots of other stories about Detroit, this one accentuates the misery and ignores the region's positives. Just for the record: Not everybody here works in the auto industry. Despite some decline in population, Detroit remains the 11th largest metropolitan area in the country with an estimated nine-county population of 5.4 million. Including Windsor, Canada, the population is about 5.9 million. A 2005 PricewaterhouseCoopers study estimated that Detroit's urban area had a gross domestic product of $203 billion.
Suburbs surrounding the city include some spectacularly well-appointed communities. Every major sport has a stronghold here. The Detroit Institute of the Arts has one of the largest and most significant collections in the world, including the famed Detroit Industry fresco by Diego Rivera. The restaurant scene is vibrant. The horrific air and water pollution are gone, leaving the Detroit River and Lake Erie amazingly clean and a major fish hatchery. Boating is a popular pleasure. The state leads the nation in the number of boat registrations, most of them moored in the waterways of the southeastern part of the state.
Every time I read a list of the best and worst places to do almost anything, Detroit is at the top of the worst category and it makes me bristle. Most of the time, I don't think the people who compile those lists have ever been here. Maybe they've never been west of the Hudson.
Anyway, now that I've gotten that off my chest, back to the $100 house in Detroit. SmartMoney.com points out that investors are buying up thousands of homes for sale in Detroit and other economically hard-hit cities. And Homes.com reports a 30- to 50-percent year-over-year increase in searches for homes in foreclosure-heavy states, including California, Michigan, and Florida.
The investors run the gamut from international speculators seeking a house or two to venture capital firms that buy bundles of homes for 25 cents on the dollar - most in need of renovation and some with substantial tax liens.
Will these investments lead to riches for those who take a chance on declining areas like Detroit? Possibly, IF housing prices go back up and IF investors are able to fix up and rent the properties out while they wait to sell.
In Detroit, even a city supporter like me thinks that's a big IF because I don't see anyone or anything addressing the core problems here – a corrupt city government, unrealistic taxes and an education system that is probably unsalvageable. But in this case, I'd be happy to be wrong. I hope the young couple with the $100 house has a long, happy and prosperous tenure there. And may their commitment and sweat equity help lead the way to better times for the beleaguered Motor City.