In geographic terms New Jersey may be America’s armpit, but when it comes to property value, safety, and human decency, Detroit takes the pit prize. Out of all the American cities that experienced economic upheaval from the end of the country’s industrial days, Detroit has had it the worst. They’re one of the poorest and most dangerous cities located in the Rust Belt, and Michigan’s State Treasurer Andy Dillon recently recommended that a financial review team be appointed to the city because of its massive economic problems.
Since the economic downturn in late 2008 people have heard very few encouraging stories about improvement in The Motor City. We’ve heard about promising urban gardens and have seen many car commercials that have remixed Eminem’s “Lose Yourself” in order to highlight the city’s tough nature, but it wasn’t until recently that some people saw a chance for true economic revival in the city.
The city’s glut of foreclosed homes has made it an investment haven for people who are interested in purchasing inexpensive and foreclosed properties. Tax-delinquent property auctions have attracted both American and international investors to the city to scoop up some extremely cheap real estate. Some people have paid as little as $500 for foreclosed property in the city, and if current trends continue one of America’s most troublesome cities could have a chance for some true economic revival.
In 2012 Wayne County sold 10,461 of the 18,897Detroit properties that were up for public auction. More than half of the homes sold for peanuts, and many savvy buyers have been trying to snag as many properties as they can. It’s important to mention that these cheap properties aren’t only going to rich foreign investors or even rich American buyers, many Detroit residents have used the cheap home sales to build their own real estate nest egg. In the previous link a Detroit native named Jasmine McMorris bragged about the 332 Detroit homes she has purchased over the past two years. McMorris and other Detroit residents have purchased and repaired homes for a few thousand dollars, and have been able to earn ridiculously high returns on their property investments.
Usually a large scale home buying spree can hurt local economies, usually because of unscrupulous landlords who rent their new properties and refuse to properly maintain them. So far the mass property buy outs in the city have been beneficial, home prices in Detroit have actually been slowly rising. In November 2012 home prices were up 3.4% from the previous year, and since over ¼ of Detroit properties are currently vacant it’s very likely that property values could improve in some of the city’s worst areas.
High property values can’t rescue a city from economic destruction, but it certainly does help. If you’re looking for some houses to flip check out Detroit, or any of the other cities where there is an alarming amount of houses up for tax-delinquent property auctions.