Artists Buy Cheap Houses on REO Property Listing
The city of Detroit in Michigan has found another way to address the growing REO property listing in the area. This time, the help comes from artists who heard about the city’s very low home prices.
BanglaTown. This is what people called the north Detroit neighborhood where a mix of artists, African-Americans, Bangladeshis, Ukrainians and Polish, live and set up their businesses. They heard about the city’s cheap homes and snapped up one for their own.
According to April data from the Detroit Association of Realtors, the average property price in the city dropped to $11,533. Market analysts attributed the drastic decline in average home price in the area to the growing number of abandoned and vacant homes on REO property listing.
Before the massive layoffs at General Motors and other corporations in the state, Detroit has already the lowest home value in the whole of Michigan.
Investment adviser Mike Shedlock said that those artists living in BanglaTown are doing the city a great deal of help by stabilizing neighborhoods that are falling into deterioration.
Most of the houses in BanglaTown were vandalized and stripped to the bone. But this did not deter some artists who took the risks, bought houses on REO property listing and renovated them to make them livable.
Take for example the case of an artist couple who bid on a property for $100. This couple rehabilitated the 1920s brick property and installed energy-savings materials such as LED lights, solar panels, high-end insulated windows and recycled wood.
The couple also plans to install a security system with steel doors and hurricane-proof windows and experiment with using a car battery to power an air-conditioning unit.
Meanwhile, Michigan will offer $25,000 to individuals who purchase a property in the city, provided that they pay about 1 percent of the total amount and make it their primary residence. Under the program, speculators and landlords are not eligible.
Michigan State Housing Development Authority director Mary Townley said that the funds are part of the $263 million money allocated to various states under the Housing and Economic Recovery Act of 2008. The grant is intended to encourage buyers buy deteriorating houses on foreclosed property listing and to help them bring these homes up to code.
A report released by Brookings Institution showed that Detroit is one of the U.S. cities with the lowest economic performance, ranking among the worst in terms of average wages and unemployment, had high foreclosure rates and low market value homes.
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