Detroit's foreclosure homes draw outsider buyers 2009-03-09 17:07:20   Print

Special Report: Global Financial Crisis

    BEIJING, March. 9 -- The foreclosure notices on a rampaging spree in Detroit have attracted investors from as far away places as the United Kingdom and Australia even as home rates have fallen dramatically.

    The for-sale signs offer at least 1,800 homes for under 10,000 U.S. dollars, which once was worth at least 10 times more. In extreme cases, homes are on sale for one dollar or less.

    "In the past few months, I've picked up 10 new clients from out of state that are buying in bulk," said Mike Shannon, a suburban Detroit real estate agent. His office specializes in foreclosures in a city that's among the national leaders.

    "They're coming to us, saying Look, I want to buy 50, 100, 1,000. They want to own every decent and cheap house they can find."

    Despite a stagnant retail housing market, real estate sales of foreclosed homes are booming. Shannon regularly fields calls from eager prospects, and recently sold 30 homes in one day to one buyer. A trio of U.K. investors has bought a half-dozen and plans many more.

    "I thought it would be quite good fun to have a look," said Darren Veness, who lives near Brighton, England.

    Outside buyers are the latest in a long line of landlords taking over the deteriorating housing stock of the city that because of its once mighty auto industry boasted one of the highest owner-occupied housing rates in the U.S. And unlike many large cities, Detroit's single-family homes dominate its landscape, not high-rise apartment buildings.

    The outside investors aren't only interested in Detroit, but it's been targeted because of the sheer volume of homes and the fact that values have fallen so much more than elsewhere.

    Detroit now has the lowest ownership rate for single-family detached homes of the 20 largest cities in the country, according to data analyzed by longtime Detroit demographer Kurt Metzger.

    Even the sale of U.S. Housing and Urban Development homes has been impacted by the poor housing climate in Detroit. The average sales prices of such homes plunged from 46,702 dollars in 2003 to 8,692 dollars last year. Through the first month of 2009, average sales were 6,035 dollars.




Editor: Huma Sheikh
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