Overseas Buyers Flocking to Foreclosure Auctions in Detroit
Overseas buyers coming from U.K. and Australia are flocking to foreclosure auctions in Detroit. The city is dotted with foreclosure notices and there is a surfeit of houses for sale. There are on the shop shelves 1,800 units priced below $10,000. Just a couple of years ago these were worth ten times that amount. In some extreme instances the houses are being sold for $1. This has lured in potential buyers from abroad. Darren Veness is a resident of Brighton, England. She though it would be fun and interesting to take a look at this foreclosure market.
Mike Shannon is a Detroit real estate broker and specializes in foreclosures in the city. In the past couple of months he has picked up 10 fresh clients from outside the state who are making bulk purchases. They want to buy up 50, 100 or 1,000 units – eager to snap up each and every decent bit of property going cheap that they can locate.
The foreign buyers are the recent among a long line of purchasers taking over the falling housing stock of Detroit – a city that had been a might centre of the automobile industry and boasted of the maximum number of owner occupied homes in America. Unlike many other jumbo cities, the single-family houses dominate the scene here and not the high-rises.
The buyers coming from abroad are attracted by the huge volume of vacant houses available for extreme low prices – much lower than anywhere else.
The poor housing mood of Detroit has impacted on the sale of HUD houses. The average price tag of these houses has fallen to $8,692 from $46,702 in 2008. In January 2009 it has dipped to $6,035.
However this is not the picture across the entire real estate market of Detroit. For instance a seven bed roomed Tudor house in Indian Village is asking a price of $849,900. A penthouse condo in Albert Kahn Building is asking $765,000.
The population of the city has dropped to half since 1950 and there are no signs of it picking up. The winners in this drama could be the renters who have settled in the houses of bonafide landlords. The losers are those who have fallen into the clutches of dubious ones who have no right to let out the premises. Those who have managed to cling on to their houses in this foreclosure climate will benefit with neighbours moving in to reside but the cost they will be pay is a further fall in their own property prices.
I’m a Canadian interested in investing in property in Detroit. I would like to buy some houses and rent them out. Some information I would require would be: purchase taxes; property taxes; rental management fees; insurance rates and contact information for a few insurance companies. Thank you,
Michel