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Detroit auctions 9,000 properties for as little as $500, but 80% have no bid

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Reuters:

On the auction block in Detroit: almost 9,000 homes and lots in various states of abandonment and decay from the tidy owner-occupied to the burned-out shell claimed by squatters.

Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York’s Central Park. Total vacant land in Detroit now occupies an area almost the size of Boston, according to a Detroit Free Press estimate.

The tax foreclosure auction by Wayne County authorities also stood as one of the most ambitious one-stop attempts to sell off urban property since the real-estate market collapse.

Despite a minimum bid of $500, less than a fifth of the Detroit land was sold after four days.

[...]Wallace [an individual investor] waited for the auction to roll around to Detroit's Boston-Edison district, a once stately area that was home to boxing legend Joe Louis and Motown founder Berry Gordy.

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.

"Why am I competing against a bank?" he said later. "It would be common sense to have a separate process for people who want to move back to the city or it's going to stay empty."

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chicago dyke's picture
Submitted by chicago dyke on

investor? but yeah, i grok that point. banks, foreigners, the bottom line is that americans in distressed areas should be very, very worried about Detroit-like conditions of real estate. who is buying up these fire-sale properties, and why? what do they intend to do with them? how will they influence the local political process?

in my area of MI, our municipality fought with WalMart, over a store location and lighting. i learned a valuable lesson, going to those township meetings. in a nutshell: WalMart had the lawyers and money to find and use cheese holes in the local law, such they could go against the wishes of 000s of people in the community. i remember speaking with the big Dem on the township board, and he told me, "it's all about deep pockets. it doesn't matter what people who live here want, the township board has to follow the law, and the WalMart suits have the money and talent to exploit it." so now our WalMart is open 24/7, fuck the subdivision nearby and the residents who want to enjoy dark and quiet during the night time.

similarly, i worry about all these properties all over america that are "undervalued." leaving aside the issue of actual value, the question is about who controls a property. right now, i'd guess people buying property in places like Detroit are, as the post mentions, faceless banksters and similar folk who aren't going to occupy what they purchase. almost never is it a good thing to have owners who are not tenants. i believe it will only be worse when said owners aren't even citizens of this country. imho, that kind of owner is going to be a lot more common in the coming years. i don't mean to be a xenophobe; i'm speaking more about the idea that much of our bailout money is going overseas, and when we "compete with banks" we're really competing with people in other countries. i don't look forward to having a ChiCom or member of the Saudi royal family own 80% of the land around here, do you?