Detroit homes sell for $1 amid mortgage and car industry crisis

Houses on sale for a few dollars are something of an urban legend in the US on the back of the mortgage crisis that drove millions of people from their homes. But in Detroit it is no myth.

One in five houses now stand empty in the city that launched the automobile age, forged America's middle-class and blessed the world with Motown.

Detroit has been in decline for decades; its falling population is now well below a million – half of its 1950 peak. But the recent mortgage crisis and the fall of the big car makers into bankruptcy has pushed the town into a realm unique among big cities in America.

SOURCE

This article realy arrests my attention.
Houses for sale for such a small price this sounds unbelievable to me.
One in five houses empty.
Complete blocks been taken down and replaced by communal farms.

I am not expert in this area but did this city not used to be the heart of the US economy?
One can only imagine what would be the results in the near future when indications of failing economy are so drastic.

Are there any people from or around Detroit that can confirm this news?

Well first you need to define what dollar homes means...

In real life that means a house/property will be put up at auction with a starting bid of $1.00 it might really sell for that... but not likely
One of many auction sites

these dollar props usually come with a quitclaim deed.. there could be large liens back taxes even penalties assessed and you wouldn't know it until after you signed on the bottom line... once read this thing where someone bought one of these and found the city had already slated it from Demo after he paid the auction house... that put him on the hook for all those fees and fines

so can you buy a dollar home? yes but the total cost will be closer to a few thousand and the ones I've seen will need a lot ( I mean no copper pipes in the walls) Work

I still wouldnt buy one.

The moment any life moves into that city they'll be taxed dry. Then once the neighbors notice a moving van in the area you'll be burglarized and lucky if they dont rape you and torch the house once theyve taken everything you have.

Detroit is about 5 minutes away from becoming Thunderdome or the title city of the next Snake Plissken movie.

Houses for sale for such a small price this sounds unbelievable to me. One in five houses empty. Complete blocks been taken down and replaced by communal farms.

I have read similar articles with pics of the houses. They are death traps and not even worth $1.00!

Although it is a terrible shame this fate has befallen Detroit, I do think the communal farms are a great idea. At least the people that are still there will have food that is much less expensive (unless these farms are government run) and much healthier than the processed crap in the grocery stores.

We lived through this kind of economic devastation in Gary, IN. Homes, families and livelihoods were wiped out amazingly quick. Luckily we were young and although we no longer had jobs we at least were debt free. We sold everything and got out fast.

It's so sad we grew up there and now it's not even safe to visit our old neighborhoods. I google earth our old houses/neighborhoods just to see if they are still there. Downtown looks like a bombed out war zone. The main street is dotted with parking lots that use to be large thriving stores, restaurants and theaters. Steel workers paychecks is what made that city. Downtown was a bustling booming place in its day. It's frightening how quickly things decline when the jobs go south.

Families who were able to get out initially fared the best. Others who could not establish jobs elsewhere were stuck living in homes they knew they couldn't keep for much longer. Guys who had 20 years, homes, families and futures were on the street. We saw so much divorce, crime, death, alcohol/drug abuse amongst formally hard working people who were left without hope.

We took a chance and moved to CO. We had no jobs lined up but we knew if we stayed in Gary it would be the end of us as a couple. Living like that is not conducive to a relationship, child rearing or anything else a human holds dear. I thought this situation was unique to the area and we were just a few of the unlucky ones who grew up there. I never saw this happening anywhere else except maybe Detroit. I can only say I hope the same thing doesn't start spreading like a cancer to your towns. If it does it happens fast get out as soon as possible. Leave the house and run while you still can. If you wait too long you will not have the resources or the motivation.

We completely scaled down our lives. We moved to a small rural area with affordable housing but low pay. We adjusted our standard of living accordingly and have done ok. We now own a home on acreage in a safe area. Something we could never have done in Gary. We have set ourselves up to be somewhat self-sufficient. Once something like Gary happens to you it's not easily forgotten. It's always in the back of our minds the same thing could happen here. Then where would we run? How could we possibly reinvent ourselves yet again?

reply to post by Morningglory


Very interesting to read your story, it must be scary to see such a thing happening so quick.
I almost can not imagine such a thing happening in a modern western country, but it does.
I do not know anything about the demographics of the place where you lived but i know that detroit is quite a large city.
This must be quite unreal seeing large places been abandoned like little ghost towns.

I guess i can become very unsafe very quickly when so many people have a low or no income all in the same place.

reply to post by jaamaan

The population in Gary in 1960 was 178,320 by 2000 it was down to 102,746.

Here's a wiki link about Gary.
en.wikipedia.org...

The city was founded in 1906 by the United States Steel Corporation as the home for its new plant. The city was named after the lawyer and founding chairman of U.S. Steel, Elbert H. Gary.

It was a mill town. Since this country no longer finds it profitable enough to manufacture anything in this country anymore, towns like Gary/Detroit will die right along with industry. Seems troubles have only just begun for Gary.

Property tax limitations implemented for the entire state of Indiana have left Gary in a financially difficult situation. The city is one of the few in the US that uses cash based accounting, a system usually limited to use in very small businesses and not municipalities with budgets greater than 80 million dollars. Gary currently is under temporary reprieve from full implementation of the state tax caps, an implementation that is scheduled to be applied to Gary in 2012. At that point Gary's property tax revenue of approximately $60M is projected to be cut to approximately $30M. The budget changes necessary at that point are widely viewed to be devastating. en.wikipedia.org...

It's so sad the people from towns like Gary/Detroit were the hard working backbone of this country. They fought the wars, they built the great system of highways/railways we've since let fall into disrepair. They lived good decent taxpaying lives now their homes are worth a buck and their community is a ghost town.

I hope everyone gets a good look at towns like Gary/Detroit. Maybe it's not your reality but we didn't expect it to be ours either.

Thanks for that information.

Originally posted by Morningglory
reply to post by jaamaan

 

I hope everyone gets a good look at towns like Gary/Detroit. Maybe it's not your reality but we didn't expect it to be ours either.

I think you make a very valid point here.

I just did a search for Detroit property and there is a lot for sale for $10,000 and below.

That's pretty cheap.

I don't want to live there but that is cheap

This isn't happy reading:

So here’s the scene. Imagine a 100-square blocks in a city on a hot summer night. Only one out of every twenty streetlamps is working, and even that is low-wattage. These lamps are broken and swinging back and forth in the wind. There’s rusted out steel drums lying here and there. Pyres of burning scrapwood. In the background there are shadowy figures darting in and out of buildings, trying to salvage anything or strip the remaining buildings of anything that’s worth anything.

Since no electricity is being provided to these residents anymore, what this private management cum security company does is they bring in old water trucks. Then these water trucks are placed at certain locations during certain times. The people then totter down with their old plastic buckets and bottles to get their water.

My friend said that what Detroit looks like now, particularly at night, is like a scene that you would see five or ten years after a Third World War. Everything is bulldozed, but it’s not all collected because there’s not much left after everyone has picked it apart. They just bulldoze it, chop it up and leave it in little piles. So imagine these little smoldering piles of rubble with these low wattage street lamps that are broken swinging back and forth. And don’t forget the rusted out water trucks bringing in water for the “survivors,” what else can you call them? They also bring in food from various charitable organizations and distribute free food like Spam and week old bread, etc.

On the other hand, there are some positive developments in urban farming that could point towards a more optimistic future for Detroit.

These videos paint a grim picture of the situation in Detroit.
Very sad to see.

The scale of this economic meltdown seems to be quite large.

Japan has a falling population and in some parts of thatcountry they are trying to "consolidate" emptying towns by simply cutting services. If people want to keep living there they can, but they aren't going to get any water, electricity, schools, etc. I think the same is true in some parts of Iran, except there they are forcably consolidating people.

The US is at least in theory a free society so you can't force people to move, but I think encouraging consolidation in a city like Detroit would be a very good idea. This could be done in a manner similar to the Japanese model. Perhaps the city could offer tax incentives, free or subsidized housing to those willing to move, and change the way services are provided.

The scale of the Detroit collapse is remarkable, but its worth remembering that America has had a long history of abandoning communities and life goes on. Life is change and flux.

Originally posted by silent thunder

The scale of the Detroit collapse is remarkable, but its worth remembering that America has had a long history of abandoning communities and life goes on. Life is change and flux.

You've got a point there.

Most of the ghost towns in CO were mining towns. When the mines stopped producing the people moved on but there was something to move on to. We aren't talking about a gold rush running it's course it's the American Auto Industry and US Steel for Gods sake. As long as there is a need for cars and steel there is no reason those industries couldn't continue providing products and jobs for generations. What a waste of infrastructure and lives because of mismanagement, corporate greed and corruption.

No the vein didn't run out in Detroit or Gary corporate interest did. It's just funny how financial institutions are considered "too big" to fail yet communities of living breathing working Americans are not.

By the way thanks for the videos of Detroit, reminded me of Gary, it made me a little homesick or should I say heartsick.

Unless you see it first hand it's hard to comprehend what's really going on in many towns across America. As long as it stays over there in Detroit, Gary etc. everyone feels safe. Were not talking about some villagers in Africa waiting for the water truck. I consider these people economic refugees either living in the war torn aftermath or fleeing to new areas hoping to find a foothold. Some never do. How can one rebound when the very infrastructure around you is crumbling?

This is going to happen in other places if it hasn't started already. These places don't get the kind of attention given to the likes of Tiger Woods. When we were still new here we would talk about conditions in Gary the locals would laugh in our face they thought we were either outright lying or exaggerating. So we quit talking about it.

After we got established in CO there was a steady stream of Californians relocating here. They were priced out of the housing market back home. They came in like a storm raising the cost of housing in this area. Some were pretty destitute. I wonder what they left behind? Is that what's coming overpriced cities for those who can afford it surrounded by third world suburban crime riddled ghost towns for those who can't?

Originally posted by Morningglory
Unless you see it first hand it's hard to comprehend what's really going on in many towns across America. As long as it stays over there in Detroit, Gary etc. everyone feels safe.

I have not seen this first hand but what i get from your story and the video's etc. is quite shocking so far.
And i am surprised that there does not seem to be much interest in this subject.
I do not think i ever seen anything like this, or more like this scale in europe before.

From what i read Las vegas seems to have a simular problem and this is a fairly large city to right.

Vegas was booming. We knew several people who moved out there for construction jobs. I guess it was good while it lasted. Seems some cities have expiration dates. Vegas is a big place but as far as failing towns go size doesn't seem to matter.

My husband wonders what the banks will do with all the abandoned homes? If you have ever driven through an area like that it's like something out of a disaster movie, very surreal it feels haunted.

There's folks down in Louisiana that are still living in bad conditions. I know the textile mills back in NC were surrounded by mill communities. Most likely up north there are paper/lumber mill towns. There are industrial communities in most states. With everything coming from China and no need for industry, can we really afford to loose these towns? Will other states be able to provide jobs/housing/services for all those who have to relocate? In this economy most states are barely taking care of their own.

People are sitting tight for now using up their last bits of unemployment. From what my hubby's been hearing the benefits will come to an end in July. I wouldn't want to be too close to any of these failing towns when that happens.

It was getting tough finding a U-Haul truck when we left Gary. They had too many leaving and none coming back.

Those videos are a bit outdated. This is from 3 months ago and already has close to 900,000 views.

Take a Look

Originally posted by jaamaan
Are there any people from or around Detroit that can confirm this news?

I am currently living in downtown Detroit, within easy walking distance of the whole riverfront area where all the big buildings are. However I did not grow up here, so I am a bit of an outsider. But I've been here for a couple of years, anyway.

It's true that many houses are being sold for a dollar. But as pointed out in one of the other replies, the costs of bringing one of these houses to any kind of usable state would generally far outweigh their value. There are exceptions, of course. Housing is a big deal right now at the auctions, and many people are homeless. A run-down home is better than no home at all. But often these auctioned houses get gobbled up by bank speculators. They will come to an auction and offer a price for the house that none of the people actually hoping to live there can match, then make a small profit off of the equity. Here's an article about it:

Detroit has seen real-estate speculators from around the world descend on the city looking for a good deal. And they're finding them, too. We've all heard about the $1 houses here. But are these speculators, almost none of whom live in Detroit, also making it more difficult for people who want to live in a home in the city to get in the market? Are they doing more harm than good?

Source: detroit.blogs.time.com...

Some of the videos being posted are a pretty good look at the worst areas in the city. If you live here you learn pretty quickly which areas to avoid. You can be driving along a relatively normal-looking part of town and make a single wrong turn, and suddenly you're driving past abandoned lots overgrown with tall grass, and a group of 5 to 20 people are standing in the street, staring at you. Drug use, prostitution, corruption, and crime are rampant.

However, I will say that the last thing we need in Detroit is this kind of attitude:

Originally posted by thisguyrighthere
The moment any life moves into that city they'll be taxed dry. Then once the neighbors notice a moving van in the area you'll be burglarized and lucky if they dont rape you and torch the house once theyve taken everything you have.

First of all, there is plenty of life in the city right now. I doubt if you've ever so much as ordered a pizza in Detroit, but there are plenty of friendly, honest, hard-working people in this city. Just because we have a lot of crime doesn't mean everybody here is a criminal. Some people feel the need to casually dismiss the entire population of the city. Just remember that things aren't so simple.

To get on with my post: Some areas of the city have been recently making a comeback. A friend of mine went to college here for four years, and I've been going to another nearby college since I moved here, which was just after he graduated. Between the two of us, that's 6 years of living in roughly the same area of Detroit. The regions surrounding our colleges have been seeing an expansion in business, culture, and security during this time. Even the building I'm in right now was recently just another part of the abandoned scenery. And the notorious corruption of Detroit city officials has been slowly getting weeded out over the past five years or so, including the ousting of former mayor Kwame Kilpatrick and the ongoing federal RICO investigation into all the criminal activity that surrounded him.

Also, in response to this video:

Originally posted by Smell The Roses
Those videos are a bit outdated. This is from 3 months ago and already has close to 900,000 views.

Take a Look

It's a fair enough video except for the political twist. I don't think it's accurate to say that Detroit's problems are solely the result of "liberal leftist policies." Granted, the unions do have a vice-like grip around here. But if you look just 35 miles to the west, you'll find the city of Ann Arbor, Michigan, which is about as liberal as they come and is a center of leftist political ideas. Ann Arbor and Detroit have had close ties for a long time. Yet, as Detroit's population has been falling, Ann Arbor's has been rising. While Detroit's business is failing, Ann Arbor's is expanding. So to try to shift all the blame for Detroit's woes into some kind of partisan campaign is just plain wrong.

Ultimately, there isn't really one person, area, or thing that deserves all the blame for Detroit's problems. I don't even know where to begin to point my finger. If you ask me, the best thing for this city would be to re-invent itself, to try to re-consolidate all its business and resources in the center of the city, because so much money is wasted on this vast area of land that is just not sustainable any more. The only problem, of course, is that you can't just oust everybody from their homes and jobs and relocate them. Hopefully the turnaround I'm seeing near the college campuses can provide a cornerstone for further improvement, like the University of Michigan does for Ann Arbor. Also, recent tax incentives provide promising opportunities for the entertainment industry in Michigan. I guess we'll just have to wait and see. In the meantime, remember that there are some people in this city who haven't lost their spirit.

I still wouldn't live in that city if someone paid me and gave me the house for free. Just one look at the cities government will show that this city till rot and fester, and will never rise again.