Monday, March 19, 2007

Bidders Cautious In Michigan

Reuters reports from Michigan. "With bidding stalled on some of the least desirable residences in Detroit's collapsing housing market, even the fast-talking auctioneer was feeling the stress. 'Folks, the ground underneath the house goes with it. You do know that, right?' he offered."

"After selling house after house in the Motor City for less than the $29,000 it costs to buy the average new car, the auctioneer tried a new line: 'The lumber in the house is worth more than that!'"

"The rising cost of mortgage financing for Detroit borrowers with weak credit has added to the downdraft from a slumping local economy to send home values plunging faster than many investors anticipated a few months ago. At a weekend sale of about 300 Detroit-area houses by Texas-based auction firm Hudson & Marshall, the mood was marked more by fear than greed."

"'These people are investors and they know the difficulty of finding financing. They know the difficulty of finding good tenants. They're cautious,' said realtor Stanley Wegrzynowicz, who attended the auction."

"Steve Izairi, who re-financed his own house in suburban Dearborn and sold his restaurant to begin buying rental properties in Detroit two years, was concerned that houses he thought were bargains at $70,000 two years ago were now selling for just $35,000."

"At least 16 Detroit houses up for sale on Sunday sold for $30,000 or less. A boarded-up bungalow on the city's west side brought $1,300. A four-bedroom house near the original Motown recording studio sold for $7,000. 'You can't buy a used car for that,' said Izairi. 'It's a gamble, and you have to wonder how low it's going to get.'"

"In the most spirited bidding of the day, a sprawling, four-bedroom mansion from Detroit's boom days with an ornate stone entrance fetched just $135,000."

"Even with the steep discounts on Detroit-area properties, some buyers handed over their deposits with a wince. 'I'm not sure it's congratulations,' said Kirk Neal, a 55-year-old auto body shop worker who bought a ranch in the suburb of Oak Park for $34,000. 'My wife is going to kill me.'"

"Realtor Ron Walraven had a three-bedroom house in the suburb of Bloomfield Hills that had listed for $525,000 sell for just $130,000 at the auction. 'Once we've seen the last person leave Michigan, then I think we'll be able to say we've seen the bottom,' he said."


At 3:51 AM, Blogger JW said...

I live in Novi, Michigan a suburb of Detroit, MI. And, I can attest that this post is 100% accurate. In a word the economy here is DEPRESSED. Only two years ago Novi was one of the faster growing upper-end cities in the Metro Detroit area. But, I've seen houses here stay on the market for over 12 to 13 months.

At 4:00 AM, Blogger JW said...

Even my own daughter loss her house to foreclosure.


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