Detroit’s Median Home Price Is $7,500
According to the Chicago Tribune, Detroit Median Home Sales Price was $7,500! No, I didn’t forget a zero at the end. That’s probably less than what you paid for your car!
So should you rush out and buy a home there?
A house that costs $7500 might make a pretty good investment. Assuming you can rent it out for $250/month, your net return will be in the double digits. But will you really make any money in Detroit?
It’s economy has been slipping for the past 40 years with negative job and population growth. Even the median salary has been dropping for 20 years. The city’s bond rating is at Junk status. The city has “only islands of prosperity amid a dismal landscape”.
Right now, it appears that 1,000 people are leaving the city every month. Mayoral candidate Stanley Christmas recently joked about the 14% drop in homicide rates: “I don’t mean to be sarcastic, but there just isn’t anyone left to kill.”
Every year on halloween people roam the city looking for vacant houses and torch them. So if you are unable to rent out a house in Detroit, there’s a chance it might be used as firewood!
So just beacause real estate is cheap, it doesn’t mean its a good investment! And if you think $7,500 is cheap, check out these real estate deals for under $5,000!
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March 4th, 2009 at 4:35 am
Geez, that’s nuts! Especially considering a small studio out here (in the bay area) goes for $500k. $7500 for a house! It must really be bad there. I can’t even imagine. I’m in such a bubble out here.
March 4th, 2009 at 6:45 pm
I heard a great idea today that would fix Detroit, and if any city needs fixing, it is this one. I travel there every 6 to 8 weeks, and I can’t wait to get out. It is like a war zone.
The idea is simple: “Make the Detroit metro area a Free Trade and No Tax Zone”. Can you imagine all the domestic and foreign manufacturers that would flock to Detroit if they didn’t have to pay any state or Federal taxes? (I would say they continue to pay property taxes because the city is in bad shape, bad streets, bad water and sewers, bad schools, bad public safety; they need their property taxes).
March 5th, 2009 at 7:29 am
LOD,
Have you had time to compile your monthly income report?
Best Regards,
Online Dividends
March 6th, 2009 at 4:57 pm
With GM going under…Detroit is going to be a ghost city…
When house prices are at 7.5K, you know something is really really wrong.
March 6th, 2009 at 6:49 pm
“I don’t mean to be sarcastic, but there just isn’t anyone left to kill.”
That may be the funniest thing I have heard in a while…dark, but funny.
March 8th, 2009 at 3:34 am
[...] Living Off Dividends & Passive Income presented Detroit’s Median Home Price Is $7,500 [...]
March 9th, 2009 at 9:16 am
Hey, may I ask you, what’s the matter with these properties selling for less than $5000 ? Beautiful condiminiums and acres of land for such low prices … I find it very weird. Is there any reasonable explanation for these prices?
March 9th, 2009 at 7:39 pm
Wow, that is unbelievable… it was my first thought, too – I could actually afford a home there! But you’re right, I don’t know who would even be moving to Detroit anymore. Pretty scary. The Borders books on Woodward is even closing up soon and leaving. Detroit is ALREADY a ghost city and has been for at least the last two years already (I’ve been passing through there).
March 10th, 2009 at 12:53 am
my guess is lack of demand.
March 15th, 2009 at 5:57 pm
I live in Detroit and it is puzzling why so many outside investors are buying up these homes – they are really just shells and have been stripped of wires, pipes, etc.