Look, by no means am I a property expert, but all the signs are there. If you're interested in getting a house for little to nothing — from fixer-uppers to move-in readys — and don't mind big, bad Detroit, now's the time. Here's why.
Stop right here if you're just planning to write a "no thanks" down below in the comments. Save the time and the stress on your fingers! Everybody else, listen up.
Let's start with the basic stats. Property values in the city are rising ever so slightly, on pace with rising home values across Southeast Michigan. Right now, the median home price in Detroit is $12,500.
Twelve grand is not a lot, sure. You could get a fully stocked Nissan Versa for more, yes. On the surface, it's a $12,000 gamble. But if property values are rising, a house for $12,500 might be worth double in a few years. Or it might be worth nothing, this is still real estate we're talking about.
I pointed out these two examples in a different post, but I'll re-emphasize here since this is more in line with the subject. One, the city of Detroit's Land Bank is finally auctioning off homes it owns — with no back taxes owed — to residents with the stipulation that it's brought up to code in six months. The starting bid is $1,000. The first few homes in the auction have sold for $30,000, $30,100, $34,100, $39,400 and $42,100, respectively. (And they're sold to real people. Not investors.)
(The home pictured above is a Land Bank house in Boston-Edison starting with a $1,000 bid. Buy it, and you'll live near me! And we'll hang out, promise.)
Not to be a shill for the Detroit Land Bank, since they get plenty of free advertising already, but that's the first sign. The next sign is how fast condos and other homes in the (ergh, I'm itching as I write this descriptor, but here goes...) premier neighborhoods sold through more traditional channels disappear from the market. Folks around town have been raving about one of the glass condos in Lafayette Park selling in 24 hours. Not too long after, another glass condo went up for the highest asking price in the last few years.
Landlords have been putting up apartments up for lease more than six months in advance rather than the usual month-or-two notice. A friend tells me his Brush Park condo, bought from a foreclosure sale two years ago around $100K, is now being appraised at twice that as the new entertainment district comes into place. And for once, it's not just downtown and Midtown seeing the boom. It's eastside, westside, and Southwest.
Then there's the Wayne County property auction. (Bookmark this link for later.) There's one in September and one in October. Usually everyone flocks to the one in September, since that's the first opportunity to bid on something cheap. During the September auction, you would bid on the house and pay the back taxes owed. But the October auction is when bids start at $500 and taxes are relieved. So maybe roll the dice in October? Again, I'm not going to try to dish out advice, but a neighbor of mine ended up with a home down the street from us playing that game.
So yes, buy in Detroit. Take advantage while the gettin' is good. Get here before we do indeed become the new Brooklyn and you can't afford to live anywhere else.