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alstry (35.36)

Home Values Dropping to ZERO

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January 19, 2009 – Comments (6)

Poor Poor FloridaBuilder1 & 2....Alstrynomics warned him this day would come.

 

How low can homes go? Try $0

By Al Lewis
Dow Jones Newswires

Detroit real estate agent Ian Mason has sold homes for $1.

When I asked him to check the listings for other properties at that price, he found four more.

He then took me to a white, clapboard-sided house that his company, Bearing Group Real Estate Brokerage, has listed.

"If you want this house, you can have it," he said. "I'll just give it to you."

"I'm not allowed to accept anything of value from a source," I told him.

"Who said I was giving you anything of value?" he replied....

By contrast, the median price of a home sold in Detroit last month was $7,500, according to Realcomp, a Farmington Hills, Mich., multiple-listing service, down 50 percent from last year.

Mason counted 1,228 homes listed for under $10,000, 209 of which were under $1,000.

"Many of them are in pretty decent shape," he said, "and some can be lived in."

At the auto show, I had sat inside a 2009 Maybach with a list price of more than $526,000. I had no idea that for the price of this car, I could own entire blocks of the city outside.

In the neighborhood where Mason offered me a $0 house (not including closing costs, escrow, taxes, etc.), almost every dwelling was in shambles. Boarded windows. Abandoned cars. Collapsed porches. Ubiquitous graffiti.

The home across the street was charred, likely by arsonists.

We drove through snow nobody would ever plow.

"What's this place like in the summer?" I asked.

"You wouldn't be driving through here," Mason said. "There's a small chance you'd field a bullet."

Police stopped patrolling these neighborhoods years ago.

"So if I buy a $1 house, I'm going to need to hire some security?"

"Not necessarily," Mason said. "Some of these neighborhoods are so desolate, crime isn't much of a concern."

"Really?"

"I could take you to 30 square blocks of urban prairie."

The Motor City had more residents in the 1930s than it does today. About a million people have left since the 1950s, leaving less than a million today.

Enormous buildings sit vacant downtown, their hulking shadows darkening city streets at night. Unemployment is tallied in double digits. And this is how it is before Chrysler, General Motors, Ford and associated companies possibly file for bankruptcy this year.

"Detroit is a microcosm for what's happening," said local real estate investor Bret Russell.

Real estate prices are collapsing nationwide — and in Detroit's affluent suburbs, too.

For all you Fools that think this is inflation...you may want to convert from Economics to Alstrynomics.

6 Comments – Post Your Own

#1) On January 19, 2009 at 6:47 PM, awallejr (83.78) wrote:

Yeah well try buying a house in NYC for $1 lien free. And if you find any I will give you $2 making you a quick 100% return.

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#2) On January 19, 2009 at 6:57 PM, alstry (35.36) wrote:

$5 million dollar condos are now selling for $2 million in NYC.  I don't think too many condos lost $3 million in Detriot.

Which is worse...a condo losing $3 million in value or a condo losing $100K?

I know ......just making a point.

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#3) On January 19, 2009 at 7:04 PM, Bensquire (< 20) wrote:

I live in the suburbs of Detroit and nothing in this article surprises me.  It is all true.  Such a sad state of affairs.  But, it is not only limited to the City of Detroit.  There are tens of thousands of suburban homes that will not sell for what is owed to the mortgage company.  The housing crisis is only going to get worse with the next wave of foreclosures of homes that were owned by middle class people who are going to be forced to walk away from their homes because they can not bring the tens of thousands of dollars to closing necessary in order to pay off the first and second mortgages.

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#4) On January 19, 2009 at 7:16 PM, alstry (35.36) wrote:

Ben,

It is not just Detroit either.  Currently Detroit is the most visible...but it is happening all over the nation to varying degrees.  Try going down to Fort Meyers Florida or outlying areas in Arizona or the Inland Empire in California....and the effects of the job cuts havn't even really set in yet.

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#5) On January 19, 2009 at 7:30 PM, Bensquire (< 20) wrote:

I know it is happening all around the country.  My parents own a condo in Ft. Meyers that they use to get away from the Michigan winters.  I've watched the value of that place drop, also.

With all the lip service that the housing market received while trying to convince congress for $700B, I just don't understand why so little if any went to the mortgage "crises."  Someone has to do something or housing will just be one more dominoe in the economic meltdown daisey chain.

FYI - I watched my neighbor two doors down move out of his foreclosed house 3 days befoe christmas 2008!

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#6) On January 20, 2009 at 3:20 AM, mliu01 (< 20) wrote:

Alstry, How can you deflation from 0 dollar? LOL See, the only way to go is inflation from here. Hahahaha

Seriously, I think the problem in your deflation logic is that you are still Aermican centric. I mean you are thinking in terms of USD and America. My inflation call will come when the rest of the world tired of bs that americans had put infront of them. What have america do to the rest of the world? You think they will keep on give american cheap stuff while americans paying them worthless toilet paper? That game will soon end. So it does not matter how cheap stuff will seel in this country. There will be a day. They will told us: No mas.

When that day come.  Which way will we go? inflation or deflation?

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