# Detroit median house price $7500.



## Spidey (May 11, 2009)

No I'm not missing a zero. I heard this on a podcast of the Michael Campbell "Moneytalks" radio program. 

Here's a sample of what $9500 will get you. 

http://www.zillow.com/homedetails/8130-Freda-St-Detroit-MI-48204/88653996_zpid/

I think if we need any signs that massive changes are occurring in American society, this is a pretty good one.


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## Daniel A. (Mar 20, 2011)

Things are that way in many places in the USA.
The kicker going forward will be the property taxes, many of these areas can't afford anything but service cuts in the future.


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## dubmac (Jan 9, 2011)

wow.
a person could buy that using their credit card!
what's really messed up is when you compare that listing, to the one below in Vancouver!
http://www.realtor.ca/propertyDetails.aspx?propertyId=11374269&PidKey=816716050


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## carverman (Nov 8, 2010)

Spidey said:


> No I'm not missing a zero. I heard this on a podcast of the Michael Campbell "Moneytalks" radio program.
> 
> Here's a sample of what $9500 will get you.
> 
> I think if we need any signs that massive changes are occurring in American society, this is a pretty good one.


Valued at $33.6K and going for firesale price of $9500?
But rent is estimated between $651 and $845 a month?

Some is not right in this equation. Definitely this is a reflection of the sad state of affairs in depressed areas like Detroit and other cities similar.

The layoffs, factory closings (auto industry) and the supporting industries that serviced the auto sector are steadily taking their toll on the inhabitants that are directly affected, and spilling on to those that are indirectly affected through property prices.

Property prices, whether esculating or depreciating are directly tied into the whole and local economy,
and also what the market will bear. This home is possibly being sold now now for the property taxes accumulating.

In Harrisburg PA, the city is BANKRUPT...less tax income coming in than expenditures on services for the
inhabitants. What does this tell you? Something is definitely wrong where the cities revenue and
tax base can't support it any longer. 

My married daughter who lives in a Phoenix AZ suburb informed me that their new house, bought before the economic recession in 2008, is now worth less on the resale market than what they paid for it new.

I hate to be a harbinger of bad news..but 2012 is not going to be a good year for the US economically either. 
GDP..the combined productivity of the people of a country, what they produce for their own consumption and the balance of trade with foreign countries is what is taking them down to the next depression and it will take some people with vision to pull them out of that one.

On top of all this they are so energy and oil economy dependent that also is a double whammy as the world
price of oil keeps rising. Countries that export most of their production like Canada, Venezula and the Arab
states will be in better shape....but countries that are consumers and mostly importers of goods...
their economies are definitely not growing these days and probably won't unless their are some fundamental
changes in those that hold all the money and the power.......of the people.


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## carverman (Nov 8, 2010)

dubmac said:


> wow.
> a person could buy that using their credit card!
> what's really messed up is when you compare that listing, to the one below in Vancouver!


This one is blown out of proportion as well. That looks a bungalow from the picture and unless there is more of it from the back that we can't see in the picture, it doesn't look like a 2400 sq ft bungalow from appearances. 
45w x 40L = 1800 sq ft..so maybe... if there is an addition on the back?

Anyway..the listing price of nearly $2 million just shows how ridiculous things can get out of hand with the real estate market. 
This dwelling is out of reach of pretty much most working class people because, unless you had almost 75%
of the purchase price in cash, the mortgage payments on 2 million at bank rates would "kill" you financially very
quickly! 

Using a TD mortgage calculator, if you mortaged the entire listed price of say 2 mil at 30 years and even at a the special 5 year term rate of 4.09%..and paying on a monthly basis, you would need a pretty good job to
shell out after taxes $9,612.56 a month for a 2400 sq ft old style bungalow + another $2000 a month or
more, in property taxes 


Obviously there are still those out there that are dreaming of get rich schemes..and one being real estate in Vancouver. 
True, the land for expansion of housing is very limited there because of the mountanous terrain,
so new construction has to be done mostly by tearing down the old..
but even so, this is not a good sign for families that try to afford to live there in the future. 
This could be called "Hollywood North" , where rich entrepreneurs and movie stars earning multi-million dollar salaries 
help to drive up real estate pricing.


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## ddkay (Nov 20, 2010)

Property taxes the penniless can't afford, and the return of debtor prisons. This is 21st century America...

Export economies are getting hit pretty hard this year. Check out how China is doing, Japan, and logistics/shipping companies that depend on volume for business, a couple like Frontline Ltd. (NYSE:FRO) are teetering bankruptcy in 2011.


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## Berubeland (Sep 6, 2009)

That's a one year payback on a house in Detroit. Makes me reconsider being an absentee landlord. Unbelievable.


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## the-royal-mail (Dec 11, 2009)

Looks like it's in an older/rough part of town. No sense buying if you can't sell the place later. 

How much are taxes on this place? Bet the municipality will be wringing their hands in glee at using you as their ATM. 

As foreigners we would get nailed with fees and taxes and you might not get the best quality renters if the neighborhood is bad.

I can think of a much better use of $35K.


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## financialnoob (Feb 26, 2011)

I think Detroit will rebound one day (I mean really, can it get any worse?), but I don't think I want to bet on it happening in my time.

So much of the city's success was based on the big 3, and they are struggling tremendously. City politics have been marred by scandals/corruption. The entire state is also struggling.

Still, if you feel like gambling, this might be up someone's alley. Considering 7 years ago, the property in question sold for $112K, it's a pretty high-risk, high-reward scenario. But not entirely out of the question.


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## Spidey (May 11, 2009)

the-royal-mail said:


> Looks like it's in an older/rough part of town. No sense buying if you can't sell the place later.
> 
> How much are taxes on this place? Bet the municipality will be wringing their hands in glee at using you as their ATM.
> 
> ...


I would never consider buying there, I just think that somehow this is a commentary on some massive changes taking place. However for interest, I did a street view of the neighborhood and it doesn't look run-down at all. In fact it looks like a pleasant older neighborhood. 

Here's another interesting bit of info. The median net worth of Americans aged 55-64 is $180,125. Over 65 it is $232,000. This includes real estate. Now consider as well, that the population is aging and most Americans have to contribute to their health care costs in one form or another. Add to that a monumental American debt situation. I'm not sure how all this will play out and what it means to the investing climate but I sense that the next 20 years will be "interesting". 

http://1.bp.blogspot.com/-LktJIuJ24co/TYusJz5kVYI/AAAAAAAABAM/v7SevJ6qmjs/s640/NetWorthByAge.JPG


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## the-royal-mail (Dec 11, 2009)

Agreed. That's why I mentioned about us being the ATM. People don't seem to realize that when they sign on to buy property we throw ourselves to the mercy of the tax demons. With the trillions of US debt I am unwilling to put myself in that situation. It just isn't worth the risk.


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## humble_pie (Jun 7, 2009)

you will get appalling "renters" in these districts, if they don't succeed in killing you first or at least permanently scaring you off, with their guns & drugs, from visiting your property.

detroit was one of the first US rust-belt cities to fall. Decades ago. Deer were first spotted in abandoned detroit city blocks more than 12 years ago.

a high proportion of rust-belt inner city housing stock will have to be demolished. Because when left standing, such buildings are magnets for vandals, squatters, fires, drugs & crime. The munis know it's foolish to keep hoping these derelict homes will ever attract owners who are capable of paying the property taxes. It's cheaper to raze the buildings. That way police, fire, water, energy services, school & ambulance services can be cut drastically. Meanwhile, the owners of the bare land usually continue to pay reduced taxes on what is essentially polluted brown-belt terrain.

in most of the rust belt cities, brave small communities of mostly artists, academics & urban rights activists have ventured to buy parcels of these freebie inner-city houses. Usually these urban homesteaders clump close together on 2, 3 or 4 contiguous city blocks for joint & common protection purposes. Flint, michigan has some good examples of this.

i wouldn't be willing to live in such circumstances, myself, although one hears that some urban homesteaders have children & are willing to drive the long distances required each day to ferry the kids to their decent schools & back home.

what are eerily missing in such communities are the police, fire & health services that we take for granted in canadian cities.

in these abandoned US city districts, such services often never arrive. There are neighbourhoods in every medium-to-larger US city where police will not go, for example. Think beirut lebanon during the civil war. Think homs syria today.

one reads fascinating stories about these self-reliant early reverse-migration pioneers. A couple years ago the ny times told us about a woman in inner-city detroit who'd gathered up a group of street kids & started an inner-city organic farm. They sell their vegetables, the kids stay in school, & somehow the operation has succeeded.

google the subject now & you'll find a bunch of urban farm operations in mo-town today, including one for single mothers.


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## hboy43 (May 10, 2009)

the-royal-mail said:


> Agreed. That's why I mentioned about us being the ATM. People don't seem to realize that when they sign on to buy property we throw ourselves to the mercy of the tax demons. With the trillions of US debt I am unwilling to put myself in that situation. It just isn't worth the risk.


Before all the troubles, foreigners in places like Florida were already treated "specially". This is an idea that can only grow.

hboy43


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## luisa (Dec 7, 2011)

We just spent the night in Detroit, down in Greektown. My husband and I never tire of driving around the city and gawking at the architecture. Perhaps not the smartest thing to do in some areas, true, but the beauty of the detailing on a lot of the buildings- residential and commercial- is remarkable. 
It has come a long way in the last 20 years- most of Woodward has been rehabilitated with the University and such doing a lot of refurbishments. I actually felt reasonably safe in the area around the Detroit Institute of Art.
Driving out on East Jefferson, there are little pockets of well-cared-for properties, and then there are blocks of horrible, burned out shells. It seems such a terrible shame to raze these historic homes, but it would take a miracle to find the amount of cash needed to resurrect them. 
We love that city. But it has been the victim of such turmoil and corruption and decay, one wonders how it will find its way back.


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## Karen (Jul 24, 2010)

A friend of my daughter's inherited a house in Detroit from her aunt early this year. When she travelled to Detroit to look at the house and discuss her options with her aunt's executor, she was shocked to find that the house was worth literally nothing. A realtor told her she would be lucky to get $2,500 for it. I don't know anything about the location of the house (although I assume it wasn't in a very desirable neighbourhood), but she described it as being "older but in pretty good shape - perfectly livable" She ended up giving the house to some neighbours who had been good to her aunt.


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## Daniel A. (Mar 20, 2011)

Detroit started down in the sixties with the riots, folks moved out at one time it was not safe to stop at stop signs and still may be the case in some areas.

It really is a shame to see what has taken place in some of the oldest cities in America.


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## sags (May 15, 2010)

Cleveland, Ohio is bulldozing abandoned homes and giving the land to owners on either side......if there are any.

US home prices continue to decline, despite record low interest rates and mortgage interest deductions from taxes.

Canadians are more deeply indebted than Americans, earn less income, have higher tax rates, and affordability % are worse than when the US house crisis started.

No wonder Flaherty, Carney and the banks are worried.


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## carverman (Nov 8, 2010)

Karen said:


> A realtor told her she would be lucky to get $2,500 for it. I don't know anything about the location of the house (although I assume it wasn't in a very desirable neighbourhood), but she described it as being "older but in pretty good shape - perfectly livable" She ended up giving the house to some neighbours who had been good to her aunt.


I think the term for it is "urban decay".. most of the original housing built 50 to 80 years ago is in specific areas and because of infllux of certain cultures where drugs and other types of activities...the younger working class families don't buy homes in these areas..some are predominately black American neighborhoods..where the streets are littered and dirty.

I've seen this in Cleveland..another similar city with urban decay.

Young and educated families will relocate to new neighborhoods usually outside the city limits and commute in, ( if they 
really have to), to work.
However, Detroit has undergone some renaiissance in the last couple decades. Some of the downtown older buildings have been replaced with modern..mainly because of the presence of GM/Ford/Chrysler.

Detroit has it's posh neigborhoods..where the "ruling class" and the "Fords" live..Grosse Pointe.

If one cares to scroll through this Wiiki ..you can see there are quite a few areas of Detroit, where property prices are not exactly deterorating as much as in the older downtown areas. These are the areas where most of the affluent choose to live and do business. 

http://en.wikipedia.org/wiki/Neighborhoods_in_Detroit


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## carverman (Nov 8, 2010)

sags said:


> Cleveland, Ohio is bulldozing abandoned homes and giving the land to owners on either side......if there are any.
> US home prices continue to decline, despite record low interest rates and mortgage interest deductions from taxes.


It's called "affordabilty"..if one is stretched to their credit limits already, even mortgage payments written off as tax deductions don't help that much. If they don't have jobs..they don't buy, even on time. 
If their credit is no good..and they have no equity left in their homes or properties...that's pretty much "game over for them!"



> Canadians are more deeply indebted than Americans, earn less income, have higher tax rates, and affordability % are worse than when the US house crisis started.


A lot of people are worse off than in 2008..including me..I lost my TRA, medical/dental/life insurance and now 30% of my pension..I still get by, butnow I have to count my "pennies at the end of the month", until my next
pension check comes in...my discretionary income is gone..but at least for now..I'm not in any kind of debt,
and I don't have to consider any refinancing using the equity of my mortgage free home. 



> No wonder Flaherty, Carney and the banks are worried.


Concerned maybe..but Canadians are a different type of people..more conservative than Americans, I would think. 
Flaherty and the BOC are definitely more proactive than the American bankers in 2008..
maybe that's why (at least so far), we are not in as deep in debt or sinking as fast as the Americans.


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## uptoolate (Oct 9, 2011)

The plight of Detroit and the American industrial north is indeed very sad. Hopefully one day somehow things will come back but it seems that many of these cities are destined to never regain their peak populations or vitality. The stats on Americans' net worths are quite striking and all the more worrisome when factoring in health care costs. Best of luck to all of us.


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## carverman (Nov 8, 2010)

dubmac said:


> wow.
> a person could buy that using their credit card!
> what's really messed up is when you compare that listing, to the one below in Vancouver!


*Both are blown out of proportion* and just shows you what can happen when asking prices are set to what the market will bear.
It's the law of supply and demand surfacing again:

Booming or stable economy and buyers with lots of cash in their pocket, paying inflated prices because they expect prices to continue to rise, so they take a gamble and live in it for while... while waiting for the prices to continue to rise, so they can sell..and expect to make a profit TAX Free.
In Vancouver, it's now becoming similar to winning a small lottery. 

In a depression like conditions, severe underemployment situations (like Detroit)..no job-no money-bank forclosure-tax sale etc..it all helps to drive market prices down..especially in older areas of the city.

It's tough to sell real estate in areas that are close to "ghettos"...it's similar to having your nice house next to a ******* with several old rusted cars on cinder blocks in their driveway and a chained barking pitbull ..or a neighbour that paints his
house purple..(or shocking pink with pink flamingos in their front lawn as decoration) ..or even some colour that doesn't harmonize with the neighborhood...
buyers will come and look..but when they see the surrounding environment that the house is in (and they may want to sell
in the future and realize some "equity profit")..they just basically walk away...IF the property is listed at normal housing market prices.

However, at basement bargain prices..someone will eventually come along and bite..and maybe just rent
it out as a business/investment....that is probably why that house for $7500 had a suggested monthly rental of $750 to $900...as potential income property for the buyer.


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