Home Values Dropping to ZERO
January 19, 2009
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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.
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