Now here's a real bargain
Now this is a concept that is hard for my Boston-centric mind to grasp.
Banks so eager to get rid of the foreclosed homes that lenders are selling them for as little as a thousand dollars.
Practically giving away half decent, or at least at one time half decent, homes that would go for a small fortune around here.
That’s how far the real estate market has crashed in some cities around the country. Flint, Michigan has 18 homes listed for $3,000 and under, Cleveland 46 and Indianapolis 22, CNNMoney.com recently reported.
Some of these homes, if they were transplanted to Wellesley or Weston, would fetch several hundred thousand dollars.
There’s a bungalow in Detroit that’s going for $500. It light and airy, but is in need of a gut rehab. But the listing price sure beats the $72,000 the last owner paid for it in 2007.
Then there’s the four bedroom home in East Cleveland that is on the market for $1,900. It’s in tough shape on the inside, but still looking good on the outside, the CNNMoney report notes.
So far no bank has gone that low around here to drum up a living, breathing buyer.
But let’s not get too smug here. You can easily buy any number of foreclosed condos in Dorchester or Roxbury for about $50,000. Many of these converted, triple-decker units were “selling’’ for $280,000, $300,000 and up during the boom.
And in Worcester you can scoop up any number of units in the $12,000 to $22,000 range.
A former colleague of mine used to muse about his day dream of scooping up a foreclosed triple-decker at some rock bottom price, fixing it up and renting it out.
When the banks start practically giving this stuff away, such deals start to look awfully tempting.
That is until you get a look inside and find your bargain basement home or condo stripped bare of anything of value, right down to the plumbing.
I guess if you are planning a gut rehab, the first part is already taken care of for you.
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You don't want to touch these. There are two types of people..."knife catchers" and those who wait until the bottom where the fundamentals are correct. Those $3,000 houses are way too high, and when we reach bottom, those will be under $100, maybe even they'll accept a slurpie in exchange.
At least since the fall of the sub-prime market, there won't be too many people buying with less than 20% down. But with low interest rates right now, a 30 year fixed can run you probably
It says something about how realistic people living in Boston are if someone can think that a house that needs $20,000 in renovations should "fetch several hundred thousand dollars."
Doesn't matter if its 3,000, or 300, 000 - what matters is that the price is correct. Or not.
bv, that made me burst out laughing :)
If you have ever been to Flint, MI you would understand that you would have to pay me to take any foreclosed property there.
bv's post made me laugh, too. The real question, of course, is not whether the correct price of a house in Detroit is $3K or $100--that's an error too small to worry about. The question is whether the true value of that house is negative. In other words, whether it has no hope of being rented or sold in a city where the economic base is disintegrating, and represents only an endless stream of maintenance costs and tax liabilities.
Comparing Boston to Detroit isn't fair. However, a new study out predicts that Boston will experience the 5th highest percentage of job losses behind Detroit, Cleveland, Sacramento and Riverside Cal. Maybe Boston isn't so different?
James. Where is this study? "However, a new study out predicts that Boston will experience the 5th highest percentage of job losses behind Detroit, Cleveland, Sacramento and Riverside Cal. Maybe Boston isn't so different?"
We should have move Barney Frank and Chris Dodd into one of those rutting holes as our collective thank you for being such a great watchdogs over Freddy and Fanny and destoying our economy. They richly deserve this.
I think you read the article wrong, nyc was the fifth and boston was no where on the list
In houses like these, the real question is how they compare to the rental market prices in that same neighborhood.
some real estate truly is worthless...
MR Wang, If this is the truth , I haven't found it yet. In the early 1970's we bought distressed properties in Newburyport for pennies , and in some cases we were given the properties by banks and the city. These properties were thought to be worthless. The NRA wanted to tear them down . They turned out to have some value after all.
I did take a look at Detroit/Flint recently ,and it was too scary for me. This may be the place you are talking about. We will see..
No doubt real estate will get oversold again. I'm just with hung wang in that I'm not sure Detroit is actually oversold.
I just don't think things will be over in Boston until they are oversold, and we are nowhere near that yet.
This blogger might want to review your comment before posting it.
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