Housing Crisis Upside: $1 Homes?

CBS Evening News: In Detroit, Where Many Homeowners Are Suffering, A Few Buyers Find Bargains

(CBS)  U.S. home prices fell at the fastest rate on record this past quarter. For some homeowners in Detroit, that means taking a huge loss in the sale of their house. Others however, are now able to afford a home at a fraction of its recent price. CBS News correspondent Cynthia Bowers reports in "Hitting Home."

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With more than 44,000 vacant properties, and nearly 7,000 homes in foreclosure, the Detroit real estate market is not for wimps. Just ask Shanika Strickland.

She says she's put about $100,000 into her home. But now, four years after she bought it, she owes so much more than the house is worth, she's considering the unimaginable.

What does she think she can get from its sale?

"Right now, with the market, $3,000," she said.

Detroit real estate broker Ian Mason currently has 200 listings, largely foreclosures banks are desperate to get off their books. And that desperation is making for some incredible deals.

Bowers asked him how much he sold one house for.

"One dollar," he said.

It's a house he says that just a few years ago would have sold for $75,000.

Home values across the country have taken a tumble. Nationally, the median home price is $174,000. But in Detroit, the average is only $7,000 - which may help explain why home sales are soaring.

January sales are up 37 percent over last year with 1,000 homes sold last month alone.

Those are people like young single mom Sofia Hawkins who's found her home sweet home.

She got a home for $1,100. Can she even believe it?

"No, not really," she said. "It was a good deal."

And now she now owns a three-bedroom house for just twice what she used to pay each month in rent.

And though she knows Detroit may not come back anytime soon, her house is as an investment in the city's future - and her family's.

[mrddoubled]

This kind of situation could actually be a boon for the economy in the area. With lower living expenses people can work for less which will attract jobs. They will also have more disposable income which will be good for business. I have heard of people that lost their homes and are now renting for hundreds of dollars less than what they were paying for their mortgage. Surely some of this money will find its way back into the economy. Don't atticipate a huge recovery, but there will be a recovery sooner and more robust than some think

[janie_super]

that $1 home must have been a real dump lol

[mrs_nesbitt]

Umm...is this true? I'm going to Detroit, even though the city sucks - $174,000 homes for $7000?

Please i'll take it.
Posted by anti-zion
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Once you see the neighborhood you would be living in you wouldnt, unless you are a drug addict and dont want to travel too far for crack.

[libertyinmo]

"Those are people like young single mom Sofia Hawkins who's found her home sweet home.

She got a home for $1,100. Can she even believe it?

"No, not really," she said. "It was a good deal."

And now she now owns a three-bedroom house for just twice what she used to pay each month in rent. "

If she paid cash, she doesn't ever have to worry about foreclosure either. She just has to worry about her yearly rent (property taxes) to the government.