Nobody Wants To Buy (Four Fifths Of) Detroit

Detroit tried to auction off almost 9,000 homes and lots last week—enough property to fill Central Park—but Reuters says less than 1/5th of what went on the block actually sold. Unfortunately, it sounds like speculators snatched up few decent properties, leaving actual Detroit residents looking for new homes out in the cold.

“Detroit house auction flops for urban wasteland” [Reuters]
(Photo: stan)

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  1. Jfielder says:

    I live in the suburbs of Detroit… and until they start paying me to live there, I will certainly not be living in Detroit. The residential areas of that city (with a couple exceptions) are in general, bad news… a friend of mine lived in a “good area” of Detroit and his car still got broken into on a monthly basis. It is an absolute wasteland, and nothing is going to change until all of the crooked politicians are out of that city…. which I don’t see happening anytime soon.

    • mythago says:

      @Jfielder23: The problem is that fixing the city services and infrastructure takes money…and there isn’t any money.

      Mind you, you couldn’t pay me to live in the Detroit-area suburbs, either.

    • dohtem says:

      @Jfielder23: Speaking of the suburbs, what about the nice neighborhoods where the auto execs live? How are they faring?

      • mythago says:

        @dohtem: The whole’s state’s bleeding. The suburbs are finding out that Detroit is actually part of their economy, rather than merely something about which to make veiled racist comments.

        • pop top says:

          @mythago: We’ve always known it’s a part of our economy, especially since Granholm keeps throwing away large chunks of the state’s budget by giving it to them. The people aren’t bad, it’s the politicians like Jfielder23 said. What little money they do have won’t be spent properly if the city is wasting it on defending the mayor or paying for cronies that don’t belong anywhere near state government.

        • temporaryerror says:

          @mythago:
          And somewhere to buy drugs from…

      • ovalseven says:

        @dohtem: Most cities 10 miles north of 8 Mile are still pretty decent as long as you stay away from Mount Clemens.

    • dilbert69 says:

      @Jfielder23: Dude, any urban area where you park your car on the street, I’d be surprised if it got broken into less than monthly. In Detroit, I’d be happy if I came out to get in my car and it wasn’t actually on fire.

    • Rachacha says:

      @Jfielder23: They need to do what they did in parts of Baltimore several years ago. The city just needs to give the property away for next to nothing (enough money to cover the cost of the paperwork/deeds etc.)but require that the purchasers stay in the houses and fix them up. This will in turn revive an entire neighbiorhood, increase property assesments and increase tax revenue.

      You can also work out special grants and loans for businesses to invest and improve in their businesses (which will inturn encourage growth of residental areas and increase taxes.

      • bohemian says:

        @Rachacha: After seeing other news stories about some of these old large homes being practically given away if someone would live in them we had one of those “what if” discussions. Even with self sustaining water, sewer, power and fortress type physical security it would just suck. You could set up something livable for a house or a cluster of homes. But you would still have to leave to go places. It sounds like it would be like living in a Mad Max movie.

      • kcvaliant says:

        @Rachacha: They would have to do this with neighborhoods as a whole, not just individual houses..

        This way you can separate the trash with normal citizens..

    • thisistobehelpful says:

      @Jfielder23: You know, I know that politics have a huge factor in how good or bad a city is, but the residents have a bigger part. It’s one thing to steal food, it’s another to steal car stereos. At some point people choose to be trash, ghetto or trailer. There are poor places where people still take care of their stoops and yards, watch their neighbors kids, call the cops when bad things happen and don’t break into other people’s homes and cars.

    • EllisDees says:

      @Jfielder23:
      Cleveland…at least we’re not Detroit!

  2. dohtem says:

    I have never been to Detroit but I have always imagined it to be exactly like the dystopia city RoboCop was set in.

  3. metsarethe... says:

    Its hard to feel bad for the speculators when the winning bid was 15k, seems like a down payment alone on an avg house.

    But he was quickly outbid. An unidentified investor at the front of the room who had scooped up several dozen properties took the home Wallace wanted for about $15,000.

  4. montusama says:

    I want to go visit Detroit but I don’t think I’ll do that alone or during the cold months.
    Easy solution to the “bad” neighborhoods. Buy all the houses, I know I would of if I knew about the auction. Land is land no matter where it is, and a friend of mine said “god ain’t making anymore of it”. Have enough houses in an area you can make your own nice area for people to live.

  5. mythago says:

    Consumerist, in the joy of piling on for a Detroit-bashing fest, apparently didn’t read all the way through the article.

    The real story isn’t that lots went unsold. It’s that people who wanted to buy homes to live in were being outbid and pushed aside in favor of speculators. You know, like the ones who got the properties in arrears in the first place.

    • Chris Walters says:

      @mythago: Are you for real?

      My post is only two sentences long, and the second sentence is all about that. May I suggest that in the heat of piling on the Consumerist for doing something that pissed you off, you didn’t bother to read the post all the way through?

      • mythago says:

        @Chris Walters: May I suggest that I did read your post all the way through, after first reading your headline?

        • jamar0303 says:

          @mythago: In which case I think “suggesting” isn’t working out. Sometimes beating around the bush doesn’t work and you need a clue-by-four.

        • hewhoroams says:

          @mythago:
          I only read the post and am well aware that speculators outbid residents.
          I’d read the article, but I don’t want to sour my morning with more Detroit new than I normally get.

        • mianne prays her parents outlive the TSA says:

          @mythago: Yes, and the point is, there were and probably still are ample opportunities to buy dilapidated, burnt-out shells of abandoned homes in which all the wiring and plumbing has been stripped out and the crack dealers deal with impunity because the cops are too scared to patrol the streets. $500 (plus back taxes, title, and transfer fees) and it’s yours!

          Want something that’s livable though may require some modest rehabbing in an area you can trust to leave your dead-bolted home unattended for 30 minutes? Better take a few days off work to bid for it against the speculators.

    • Skankingmike says:

      @mythago: you failed at reading!

    • zandar says:

      @mythago: yay, capitalism.

  6. Orv says:

    A lot of Detroit’s problems are actually due to speculators. It’s hard to have urban renewal when large chunks of property are owned by speculators, none of whom want to put any money in to fix up their derelict buildings, and none of whom want to be the person who sold out at the bottom of the market. This has been true for years.

    • dohtem says:

      @Orv: That’s happening where I live as well. On one hand, I can’t fault them. It is just good business sense. Buy low, hold, sell high. On the other hand, I think they are scum. They have no interest in the development of the city and can hold projects back for years. Just as long as their property values rise and they are ready to sell.

      • henneko says:

        @dohtem: The problem is caused by stupid speculators that don’t understand that the process of getting a house from “buy low” to “sell high” requires investing time and money into repairs, remodeling, landscaping, etc. They saw some house flipping show on TV where 30 minutes (- commercial breaks) worth of work doubled the value of the house, and think they can do that too. They just think their rotting lump of termite nest deserves to be valued higher than they bought it, and when they’re unwilling or unable to put enough work in to make a profit, they just walk away and let the riffraff turn it into a crack house.

    • mythago says:

      @Orv: And who don’t bother to maintain the property. Then the shell corporation that bought it goes bankrupt or fails to pay taxes, the property reverts to the city, rinse and repeat.

    • hegemonyhog says:

      @Orv: I spend a lot of time in Detroit, and here’s the long and short of it – if you look at the areas where there’s new building, it’s totally haphazard and pointless. Giant empty field, new condos, burnt-out building, giant empty field.

      Detroit’s major problem is that there’s no focus as to where development happens, which is partly political and partly the fact that white flight left a massive, sudden void in the city that left it so sparsely populated it became inadministrable.

      To create a parallel: imagine that New York City, today, saw the same sort of population outflux with an 8 million population that Detroit did starting in 1968. In forty years (2049), NYC’s population, proportionally, would by 1.8 million people.

      You try running that.

  7. flyingember says:

    Kansas City just passed an ordinance where if the home isn’t taken care of the courts can give them the property.

    Speculators ruin homes. I say Habitat for Humanity (or similar groups) can have them if they don’t want to care for them.

  8. TheOrtega says:

    The sale should have been limited to people who planned to LIVE in these homes and fix them up to code. Selling too people who don’t plan to invest in the community is a waste. It’s silly for city’s to have rules about only hiring city residents for city jobs with the lame excuse that only city residents truly care about said city and then turn around and sell these houses to non-residents for a song.

    • montusama says:

      @TheOrtega:

      I disagree, for me I would tear the houses done and probably put a garden there or something, so I could live where I live and not lower the land of what I bought.

    • dohtem says:

      @TheOrtega: The devil himself could have come with cash and Detroit would have taken it. I think they stopped being picky a long time ago.

    • lmarconi says:

      @TheOrtega: Would it be possible/legal to insert a clause that you could only purchase one of these homes if you planned to make it your primary residence or that speculators could only purchase property if no one else was interested in purchasing as a primary residence?
      It’s a little big brother but I think it is a potential solution – it’s true that people who own the home and have a stake in the neighborhood will be more beneficial to the city.

      • morlo says:

        @lmarconi: Who would want to buy such a house as a primary residence? If you want to sell later you might need to wait years and accept half of what a speculator would pay.

        • lmarconi says:

          @morlo: I’m sure there are many people renting in even worse neighborhoods of Detroit (possibly minorities or recent immigrants) that could possibly realize their dream of owning a home since prices have fallen so low in these middle class areas of Detroit. Maybe there are Detroit residents with bad credit who would jump at the chance to purchase a house they can afford without a mortgage.
          The article specifically said that speculators bought the few decent properties, meaning speculators snatch up the ones someone might actually be interested in living in – probably because they’re planning on renting it, hoping that eventually the price will come up. If speculators were restricted, maybe one of those renters could be a homeowner instead.

    • craptastico says:

      @TheOrtega: the problem with that is that Detroit needs the money from the back property taxes on these lots, and this is the only way they’re getting paid. if they were to limit it only to people with residential plans they might as well of cancelled the auction b/c nobody would’ve bought them. as it is only 1/5 were bought

  9. SeattleTed is proud to like Robert Zimmerman says:

    Every Thanksgiving America eats turkey and watches the worst team in sports lose in the worst city.

    [www.theonion.com]

  10. H3ion says:

    If the city wasn’t just trying to collect what it could of outstanding tax liabilities, it could have done an urban homesteading scenario where people are given the houses either free or for a nominal payment, but must agree to spend $X in repairs and refurbishments, and live in the house for at least some period. If there are any banks in the city that have any civic responsibility, they would make home improvement loans available which, by definition, would constitute a first mortgage. Everyone wins but it takes a little time and some guts on the part of the politicians.

  11. mbz32190 says:

    The problem is with these kind of auctions, whoever buys the house owes whatever back taxes are on it. So even a $500 house may have thousands of dollars owed upon it, which probably is one of the many factors of people not wanting these homes. I don’t understand why they let the taxes slide (because I’m sure the time spent tracking down the old owners is just a waste at this point) just to get people back into the neighborhood, fixing up the houses, and actually paying current taxes on them.

    • mbz32190 says:

      @mbz32190: whoops, meant to say why don’t they let the taxes slide

    • TheSpatulaOfLove says:

      @mbz32190:

      The truly sad part is most of the homes were once very beautiful, but after many years of neglect, they would cost far too much to rehab. Just a couple weeks ago, I tooled down East Grand to go to Belle Isle. The homes on that final stretch were majestic once upon a time, and there are a few hold outs, but for the most part it’s just severe decay.

  12. Quatre707 says:

    I’m confused. The title is ‘nobody wants to buy Detroit’, but the article is about those who want to buy a home being denied the opportunity.
    If the houses sold to people that would actually live there, and… ya know, be part of the community, pay for local goods and services, and other such activities that benefit the community, than Detroit might brighten up a little. Tisk tisk.

    • Chris Walters says:

      @Quatre707: I’m pretty sure I disagree with both you and Mythago on this, but in the absence of an official copy editor, I’m going to let the comments rule. I’ve updated the headline.

    • TheOrtega says:

      @Quatre707: Exactly!

      _embedded

    • henneko says:

      @Quatre707: Well, there’s two separate problems:
      1) Nobody (speculators or residents) wanted to buy 4/5ths of the houses that were for sale
      2) Speculators outbid the residents for houses that people actually wanted.

      My big question is who the hell do the speculators think they’re going to sell these houses to? The residents who didn’t have enough money to outbid them? Are they seriously planning on turning a profit like this?

  13. ElizabethD says:

    What will happen to Detroit? Can a city actually die? As in, become almost entirely deserted, a dystopian mangle of nonfunctioning utilities and abandoned lurking houses? With lawless vagrants fighting over its remnants?

    Nah, that was just my screenplay concept. ;-)

  14. thrashanddestroy says:

    Its kind of sad, really; people outside of Michigan hear about Detroit and cringe, just picturing a complete disaster and yeah…it is. If you want your mind blown, though, look into Flint. There’s a city that makes Detroit seem like a vacation hot spot.

    As a native Michigander, those are two cities that need to be wiped off the map. That, and the term “Michigander.”

    • TheOrtega says:

      @thrashanddestroy: Really though you have to take comments like “City X is a war zone) with a grain of salt. I’m sure people say the same things about certain parts of town in EVERY city. I know in Milwaukee white people are afraid to go to the south(predominantly Latino) and north(predominantly Black)sides of town, but both parts of town really aren’t THAT bad.

  15. halcyondays says:

    The city leaders ought to repeal the taxes for 10 years for individuals and businesses moving to Detroit. They’d have people flocking in.

  16. neilb says:

    Why did these investors buy? The properties are expensive to hold.
    The property taxes in Detroit are insane. Sure, the house might be $500, but the fix-up will be 20k and the taxes will be 4k a year. Add to that private tuition (DPS is collapsing) and you can see why you cannot give these houses away.
    Heck, how many cities can provide lousy services in undesirable neighborhoods and still charge 4-5k a year in property taxes for an old small home?

  17. Wireless Joe says:

    Forget the homeowners and houses; the city needs to re-establish some grocery chains and encourage them to build there. Who wants to live where there isn’t any food, except what you can get at 7-11 or “Bob’s Grocery and Liquor”?

  18. Mr.Duke says:

    Plow under all the houses and turn the area into farmland.

  19. nikkimarie says:

    It is really sad. I live in metro-Detroit and best memories of the city is in or near downtown for games and events. Anyone remember the Superbowl? Great time. Great help for the image of Detroit.

    But, take away the smoke and the mirrors, you get this.

  20. sicknick says:

    @Jfielder23: You’re welcome to your opinion, but it’s part of the problem as well. A friend of mine lives a couple blocks away from the Fisher building, one block off Woodward. His street is about half fixer uppers and half already fixed up 3000 sq foot mansions. He turned the third floor into an aprtment that the rent from pays most of his mortgage. He has a wide all wood staircase along with marble accents and two large fireplaces. He 1/3 what the McMansions out in Rochester were going for 10 years ago.

    I grew up in Rochester and I’ve been moving south ever since. Too many white people (and yes, I’m white too, I just try not to act like a suburbanite jackass) north of 16, along with strip malls and chain restaurants. No culture at all. I currently live in Hazel Park (renting) and am looking to buy a house in the next year. The furthest north I’m looking is Ferndale and Hazel Park. I’m really interested in Hamtramack but the problem isn’t the houses or the peopele in Detroit for me. It’s the taxes. If I’m going to be paying that much in taxes I want services for them. I want snow removal and regular trash pickup.

    People living outside of the city need to appreciate and travel into the city more often, though. Riverwalk, Dequindre Cut, Dally In the Ally, Tastefest as well as concerts and restaurants. Best burger in the SE Michigan area for the price? The Bronx (and yes, I’ve had the overpriced Red Coat Tavern BS). Best hot sauce? Rasta Sauce, Union Street. Too many people drive 75 or the Lodge into the city, go to see a game and then turn around and head home. The suburbs suck, they always will, and people need to stop moving north and start making an effort to help Detroit.

    • pop top says:

      @sicknick: “I’m really interested in Hamtramack…”

      What? Seriously? (And it’s Hamtramck.)

      I understand what you’re saying about people seeing a game or concert and turning around and leaving, but that’s all Detroit really has that other parts of Michigan don’t. You can bring up restaurants and festivals all you want, but until Detroit cleans itself up, people are going to find other places that have the same things to do.

      • sicknick says:

        @squinko: I’m part of Blight Busters and Artists Village. Detroit isn’t going to clean itself up. It needs help, and you can either write it off or say things like “Oh, it’ll never change!” or worse, “I won’t do anything until it’s better.” OR you can take the proactive approach and make a difference. Detroit is in no worse position then Baltimore was 15-20 years ago or Chicago was even longer back then that. They’ve both bounced back, but it took a lot of work.

        No more excuses. Put up, or shut up. As I tell friends from other places “Yup, Detroit’s a shithole, but it’s our shithole, and we choose it’s future.”

        • pop top says:

          @sicknick: I love the fact that people are stepping up to make it a better place, but I don’t see anything significant happening until a major portion of the current government gets removed from office and some fresh blood gets in there.

        • treimel says:

          @sicknick:

          I saw Chicago 20 years ago; I’ve seen Detroit lately. Detroit is in much, much worse shape. Why try to save it? What’s wrong with simply letting nature takes it course? There was a time when the domestic auto industry could support a thriving city there, that time is no longer. That’s how it goes.

  21. johnfrombrooklyn says:

    And with that racist comment you’ll soon have to change your name to Fourtimesbanned.

  22. Colonel Jack O'Neill says:

    Why do they say not everyone could have bidded on a house?
    They were still 9,000 home that weren’t sold.
    They could have bidded on those, even if they’re run down, you can still get one, fix it up nicely for maybe 30-40 grand, and it still be cheaper then buying a new home.

    Or else, what I would have done, after it’s fixed up, turn around and flip it, maybe get like 2-3 time back of what you put into it.

    • henneko says:

      @Colonel Jack O’Neill: “Or else, what I would have done, after it’s fixed up, turn around and flip it, maybe get like 2-3 time back of what you put into it.” From who, the people who couldn’t afford to outbid you at $15,000?

      I think neither you nor the flippers have thought this through. Likely, they’ll put a few thousand dollars into the house and then let the thing rot when they realize that they can’t find anyone in Detroit willing or able to pay $45k for the place.

  23. bjdhtgjvbhdgd says:

    I was in Detroit last night for a concert. I saw a man sleeping on the sidewalk. While I’m not surprised by this, it really drives the point home that our system needs a drastic overhaul.

  24. Thricebanned says:

    t’s th 3/5ths crwd tht s th prblm.