I’m in Peoria, and we haven’t seen major housing upset either. Prices never skyrocketed, so they haven’t fallen. While there are more foreclosures, that’s just the economy.

In housing markets that never got hot, the bubble just didn’t happen. Not to denigrate Peoria or Pittsburgh, but who “flips” for the $100,000 profit in Peoria or Pittsburgh? I have a friend who rehabs houses in Peoria, but typically she buys them, moves in for two years, and sells for a $20,000 to $30,000 profit after rehabbing them from “crappy” to “up to neighborhood standard.”

That said, even in Peoria there are deals to be had — many lower-income families simply can’t get together the financing or downpayment to buy, so houses are sitting on the market a lot longer. There aren’t $1,000 houses (well, I’ve seen $6,000, but they look like what you’d expect), but there are some $20,000 to $30,000 properties in foreclosure (in $60,000 to $80,000 neighborhoods) that are very affordable for someone with good credit and the downpayment and would make nice rentals … because a lot of these families that can’t get a mortgage CAN make rent. If you can find the foreclosure that’s in manageable condition, of course, that won’t cost $40,000 to bring up to code!

http://www.trulia.com/foreclosure/2003514624–Grandville-Ave-Detroit-MI-48223

You can search the site for cheaper properties, but good luck finding a reasonable photo…

I’ve lived in the area my entire life and have thought about buying, but I can guarantee the neighborhoods are not desirable in the least and the houses are probably stripped bare, in addition to having squatters.

Interestingly,
historical properties in Detroit are also extremely reasonable.
Boston Edison, for instance, is still a posh neighborhood and has very reasonable properties:

http://www.realtor.com/realestate/1104818219/

Where else can you get a mansion for under $60,000 (in addition to substantial tax credits?)

“How does one un-develop land? As these cities shrink, and the real value of certain properties approaches zero, at what point does it make sense to abandon neighborhoods to nature?”

The Talking Heads said it best:

This used to be real estate
Now it’s only fields and trees
Where, where is the town
Now, it’s nothing but flowers
The highways and cars
Were sacrificed for agriculture
I thought that we’d start over
But I guess I was wrong

A lot of property in the fringe areas of East Liberty, Garfield, etc. can be bought extremely cheaply ($15k+) but with good schools, relatively low crime and of course all the signs of gentrification that infuriate anyone who bought a house before 1997.

Unfortunately, those are things that Detroit probably can’t replicate on demand, and of course you have to wonder what happened when all those housing projects (like our own blighted Arc de Triomphethat! RIP) made way for retail in Pittsburgh’s East End…

I moved to Pittsburgh about 20 months ago, and I’ve been stunned by the fact that somehow, they missed the bubble. Property prices in the city have stayed pretty much the same with little bumps and drops. I did see a 4BR place in my neighborhood for $200K, which is about half the price for other 4BRs; I’m assuming it must be a dump or next to falling over.

Perils of living in the trendy hoity toity neighborhood: rent is cheap if you don’t mind small, buying is expensive even if you buy small.

Then again, your cable bill would likely exceed your mortgage payment each month, but the property taxes would likely be mighty low, allowing you to save up and send your kids to a private school…

PURLY – I think this is real (I’ve heard about sub-$1000 houses in/near Detroit for a while), but the truth is no one is buying in those neighborhoods, no matter what the price.

If it’s true.

I’m not convinced. Yeah, occasionally auctions produce weird results, especially when the seller really just wants to get the liability off their hands or when the place needs a lot of work (see above) or has other issues (superfund site? toxic mold?) But if the bank was really willing to sell that low a price, they should have been willing to let the prior owner negotiate out at a more reasonable price.

This has gotta be either an anomaly, or akin to the youngster who told an NPR reporter that his name was Mike, last name Rotch.

Or an investor could come in with the money, knock as much down as possible, clear it all out, just bulldoze several square miles, and stand ready for redevelopment or reseed some forests and call it a state park…

I’m always a little surprised that people are so willing to write off Detroit based on a seemingly endless succession of sit-com jokes for which we are an easy punchline (a point that your comment proves nicely). The fact is that Detroit is a wonderland. It is entirely unique as a major urban area that is so neglected that it is almost free of rules. You can be what you want here. You wanna be rich, white and boring? You’ll be in good company here. Wanna be poor and downtrodden? We’ve got that, too. And if you want to be a groundbreaking artist? Well, there’s no better place to strap on your strange and shake it for the world to see. Just ask Alice Cooper, Aretha Franklin, the White Stripes, Tyree Guyton (http://www.heidelberg.org/) or John Dunivant (founder of Theatre Bizarre – theatrebizarre.com). I’ve lived lots of places, but I keep coming back to Detroit… and with good reason.

a note on buying foreclosed…

A friend of mine bought a foreclosed house in Ferndale, MI (a few miles outside of Detroit proper) for just around 70k and it came with no appliances, a dangerous front porch, and while negotiating the deal someone stole the copper piping out of the basement. That caused the process to extend for months as HUD fiddled around before coughing up the money to fix it (it was owned by HUD at the time and there were no visible signs of forced entry.)

There is also some pretty sketchy internal remodelling work done between when the house was built and when my friend bought it. However, the house was in otherwise decent shape, i.e the previous owners did not defecate all over the walls and fill it with dead rats or anything like that.

“And Detroit is still losing about 10,000 people every year.”

http://www.freerepublic.com/focus/f-news/1463747/posts

And even more new homes are being built in Detroit!

http://www.newhomesource.com/New-Homes/state-Michigan/area-Detroit

These old homes aren’t cheap. They’re worthless.

What needs to happen:

- Crime needs to come down (it did in 2008 – hurray!)
- Public schools need to improve (Charter schools and school competition have been helping here)
- Immigrants need to feel welcome. (Look at any large city in the USA that is growing, immigration from another country is just out pacing residents who move to the suburbs)

Even so, don’t expect Detroit’s population to skyrocket any time soon. Given 10+ years of waiting for better times, these rotten shells of former homes will be even more worthless.

Tear them down!

Even a poor bastard like myself could find a way to afford that, aside from the “must at least go to detroit” angle.

The hard part about the vacant housing problem is actually tearing them down. The ideal solution would be for the city to just outright eliminate entire neighborhoods. Move out the residents, bulldoze the houses, tear up the streets, remove the overhead utilities, etc. Thus saving the city money in the long term. The problem arises in the form of the red-tape nightmare this solution entails.

-You have got to find the owner that walked away from the house. That may have happened 30 years ago. The owner could be dead, no relatives, who knows? The city still has to prove this in court before they can rightfully take over the property using eminent domain.

-You’ve got to move out the remaining residents in these neighborhoods, residents who usually come in the form of TV-friendly 79 year old grandmothers…

-The city has had to deal with shady real estate dealers who buy up these $500 dollar homes knowing that the city wants to destroy them. Then they tie up the city in court (Hey, a 4 bedroom two bathroom house in Ann Arbor is selling for $179,000! How dare the city offer me $5000 on a house I paid $500 for?)

-Then you’ve got the general Wayne County issue where the contractor hired is a City Council Member’s cousin or brother in law. Said contractor will then not do the work, charge the city triple the going rate (for work that wasn’t done), and disappear.

Youngstown, OH has had good success with similar programs, they just take for freaking ever. Detroit usually bulldozes about a hundred homes a year, but that seems like keeping the ocean back with a broom right now.

Welcome to the recession party everyone. We’ve been waiting here for you for years

http://detroityes.com/home.htm

What this doesn’t say is that Detroit property taxes are really expensive; many of these homes have liens or other things you’d have to pay off. My parents live on a corner lot, and the 3 other corners at the intersection are all empty – and our neighborhood used to be nice, compared to what you could find a few blocks in any other direction. Houses that sit empty for more than a month or two often have their wiring and/or copper pipes stolen, followed by the siding or anything else that can be scrapped and sold.

Renting them out isn’t the best solution either, as most of the people looking to rent homes in Detroit are seeking to do so under Section 8 housing (a program where the government pays part of the rent for people who can’t afford the full amount,) and while Section 8 is a valiant effort, it doesn’t produce the most stable or trustworthy renters. We rent out the home my grandmother used to live in, and finding someone who doesn’t move in, never pays rent, waits the mandatory eviction period and then leaves before the bailiff shows up is a little more difficult than you’d like it to be.

If you haven’t been to some of the most downtrodden neighborhoods in Detroit or Flint, it’s hard to believe. I joked until I moved here. Holy fuck, it’s amazing. I’ve seen Central American poverty that didn’t look any worse. Whole blocks look like they’ve been ravaged by war or a natural disaster.

Both cities are grossly oversized for the remaining population and employment. The infrastructure is rotten. The existence of some truly glorious building shells causes ongoing friction between preservationists and those who would rent the bulldozers themselves.

Opportunistic flippers who buy these cheap houses (sometimes via eBay or sight unseen) make matters worse. Often there are years of back taxes owed. Plumbing and electrical systems have been ripped out and structural damage done by malicious vandals. It’s not unusual to have the same property abandoned again and again.

I envy those of you who can believe this isn’t true. Come visit sometime.