Buying homes in the US for $1000 (or less)

I read an interesting article on CNN about purchasing homes for as little as $500 in many cities in the US due to the dire financial circumstances the US is in. You can see the article here – http://money.cnn.com/2009/01/08/real_estate/thousand_dollar_homes/index.htm

So I went to www.realtor.com to check out some of these places for myself. Here is a list of some of the more presentable  $1000 homes I could quickly find in Detroit.

http://www.realtor.com/realestateandhomes-detail/3936-Beniteau-St_Detroit_MI_48214_1105870011

http://www.realtor.com/realestateandhomes-detail/3464-Edison-St_Detroit_MI_48206_1105998133

http://www.realtor.com/realestateandhomes-detail/18368-Bentler-St_Detroit_MI_48219_1105325462

http://www.realtor.com/realestateandhomes-detail/19173-Dresden-St_Detroit_MI_48205_1105799515

Sounds like great value – but there is one catch!

You need to sign an affidavit that you will fix the home up to a habitable state. So you will need to add a little to the prices, however still great value I suppose.

In the past property has always fared some much better than shares in recessions. The basic reasons for this is the fundamental characteristics of the property market – namely it is rather illiquid (homes can not be sold easily such as shares – it takes time and money) and the majority of residential property are people’s homes and not investments, which as a result is one of the last things sold even when times are tough.

The big difference in the US now is that when times are so tough that hanging on to a home is not possible, this impediment to significant price reduction is removed. So whilst property is still illiquid as compared to shares, in markets such as the US it is suffering price depreciation at least as significant as the share market.

In Australia and the UAE (where we have offices), the drop in the share price has still superseded property price falls, at least for the time being, and given that both economies are genuinely sound, this should continue to be the case in my view.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s