Buy a $1 House in Detroit?
By Leigh Held
NEW YORK (MainStreet) -- Detroit filed for the largest municipal bankruptcy in our country's history a little over a week ago. Many questions remain unanswered about the future of the city's infrastructure from pension plans to public schools. It seems new questions pop up every day. While many of us struggle to save towards paying down principals on mortgages or for a down payment on a primary residence it is possible to find a house in Detroit for $1. A consumer can even find a five-bedroom house for $10,000.
But before you get too bug-eyed and lick your chops at the prospect of your very own Motown manse, take a prudent step back.
"The truth is that no one knows if Detroit is a 'deal' at the moment, because it has been drowning in a steady downward spiral for the last 60 years," said Jason Abrams, co-founder of the Abrams Team national real estate firm and host of the HGTV show Scoring the Deal. "40 years ago, people said 'it is a deal, now is the time to buy.' Then they said it again 30 years ago, then again 20 years ago, then again 10 years ago. So far, it has not been such a great deal."
There are roughly 80,000 empty buildings within Detroit city limits, Abrams added, but many of them are crumbling and unappealing.
"Once you get into the higher priced homes - $15k to $25k - then the answer is 'yes, many of them are very much livable,'" he said. "The problem is that there are very few people who really want to live there."
Habitability, indeed, is the crux of the matter and with nearly one-third of Detroit abandoned, Abrams describes the 138-square-mile metropolis as "latterly devolving."
That means there's a dovetail effect on the community ammenities surrounding the real estate.
"There are roads that need to be repaired, there are poor schools and there are no funds within the city budget to make those improvements," said Leslie Piper, a consumer-housing specialist for Realtor.com.
The properties themselves are often derelict, even if the price is right.
"When there are six houses that have been on the market that have not been cared for that is going to effect what comes on the market," Piper said. ""Many of the homes in Detroit are so dilapidated they have to be torn down and built from scratch."