Yes, it’s true. You can buy a home for $1 in Detroit. But you really don’t want to. The $1 houses are mostly gutted. The taxes alone would make a $1 house a bad deal.
Detroit’s economy has gone off its own fiscal cliff. The city’s population has gone from a high of about 1,850,000 in 1950 to just 700,000 in 2013. That’s a drop of about 62%. Detroit has $20 billion in debt and an unemployment rate of more than 50%. The city has over 78,000 abandoned homes.
It’s not surprising that Detroit has a lot of homes for sale for $500 or even $1 each. But buying one of those homes might not be a good idea.
In the video below, it’s obvious the $1 homes in Detroit aren’t in great repair. The houses have been gutted by looters who break in and steal everything from hot water heaters to plumbing to aluminum siding. While many of the homes can be had for a dollar, they’re not generally listed with realtors. In many cases a buyer would have to call the owner directly and offer to take over the house’s problems. Another way to pick up a home for $1 in Detroit is to deal directly with the city to buy homes that have been repossessed or otherwise claimed as public property.
Cheap Homes in Detroit Are a Bad Deal
Many of the $1 Detroit homes look like the aftermath of heavy aerial bombing. According to Dan Elsa, president of Real Estate Online, it’s a case of buyer beware.
“The homes that you see online that are in the $1 to $5 to $100 range, you have to be very careful with those,” says Elsa. “Often they’re in a neighborhood that’s been pretty blighted. From the outside they look OK but the inside has been gutted.”
The reason the city of Detroit is selling homes for $1 is to generate tax revenue. According to Elsa, even though the buyer only pays one dollar for a house in Detroit, the taxes are applied as if the home is still worth $60,000. Someone might buy a house in Detroit for a dollar and then end up paying $2,000 to $3,000 a year in taxes on the property.
Many of the homes have squatters living in them who have moved in and made the home theirs by force of law.
Entire Areas of Detroit Abandoned
Most of the homes are unlivable, not just from being in disrepair but because of their locations. According to Detroit realtor John Lewis, entire neighborhoods would have to be bought by developers and rebuilt, along with convenience stores and other amenities. In most cases, the decline of entire areas has progressed too far to allow for the repair of a single property.
Lewis stresses that the houses depicted in the video are in a single neighborhood. He says the $1 houses aren’t representative of the city of Detroit as a whole.
However, the derelict neighborhood may have more in common with Detroit proper than Lewis lets on. Fully one third of Detroit’s area of 140 square miles has been abandoned. 60% of Detroit’s children live below the poverty line.
There is no shortage of blame for what’s happening in Detroit. The documentary below blames Detroit’s decline on globalization.
While the video above names globalization as the cause of Detroit’s decline, the video below points blame in the opposite direction: at the city’s “leftist policies.”
Decline of Detroit – Wikipedia
25 Facts About The Fall Of Detroit That Will Leave You Shaking Your Head – The Economic Collapse Blog