Monday, March 31, 2008

Cash for Keys in Vegas, Foreign Buyers in Detroit

A few interesting real estate stories:

1. Wall Street Journal--These days, bankers and mortgage companies often find that by the time they get the keys back from foreclosed homes, embittered homeowners have stripped out appliances, punched holes in walls, dumped paint on carpets and, as a parting gift, locked their pets inside to wreak further havoc. Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have "substantial" damage.

The most practical way to ensure the houses are returned in decent shape, lenders and their agents say, is to pay homeowners hundreds or even thousands of dollars to put their anger in escrow and leave quietly. In Las Vegas, agents hired by the banks to handle foreclosed properties say the "cash for keys" approach, as it's known in the industry, is a regular part of the job.

2. Detroit Free Press--Investors from as far away as Hong Kong and Hawaii are coming to Detroit to make their fortune buying foreclosed homes in bulk. Some buyers are looking to buy larger numbers of homes, perhaps 100 or more at a time.

In Detroit's distressed housing market, the majority of sales now are to investors, often in bulk deals. Sales were up dramatically in Detroit in February, rising 49% from a year before, and foreclosure properties played a key role in the increase.

13 Comments:

At 3/31/2008 9:41 AM, Anonymous Anonymous said...

Of course they are this is what happens to a country that thinks it can print it's way to prosperity, the US is going to have an argentina moment and it won't be pretty.

http://quotes.ino.com/chart/?s=NYBOT_DX&v=dmax

Bye, Bye, Bucky

 
At 3/31/2008 9:53 AM, Blogger Gregory said...

Absurd. America's debts are denominated in dollars, not a foreign currency. As such, there is no level of debt we cannot print our way out of.

That said, falling prices is evidence of insufficient printing, not too much.

 
At 3/31/2008 10:12 AM, Blogger Mark J. Perry said...

Grammar review for anonymous:

Should be "..print its way..." NOT "....print it's way..."

Remember the simple rule: It's is a contraction for "it is."

It wouldn't make sense to say "..print IT IS way..," so you can't use "it's" here, it has to be ITS.

I've often considered use/misuse of that simple grammar rule kind of an "intelligence test," but maybe that's being too harsh?

 
At 3/31/2008 10:30 AM, Blogger Walt G. said...

It’s or its?--Possibly too harsh for a quick blog response (we all make mistakes on the fly), but definitely not too harsh for any academic assignment from about 9th grade or higher. I’m not so sure about intelligence; however, careful writing tends to represent a writer’s educational attainment level.

 
At 3/31/2008 10:34 AM, Anonymous Anonymous said...

Perhaps a better intelligence test would be to explain how anyone could invest long term in Detroit houses and have any hope of breaking even let alone profiting.

 
At 3/31/2008 1:37 PM, Blogger Gregory said...

Anonymous, I guess you have not seen the movie RoboCop where the corporation OCP was going to buldoze the whole downtown to build a new city named "Delta City". The sequals explored this a little more.

It is interesting to see that even in the 1980s everyone knew Detroit was going to be a hell-hole for decades to come. If only OCP had had its way, "Delta City" might have been a better place to live.

 
At 3/31/2008 2:16 PM, Anonymous Anonymous said...

gregory, bulldozing sounds good in a pop culture sort of way but would Detroit be a good place to put a city?

 
At 3/31/2008 2:25 PM, Blogger juandos said...

Hmmm, sounds like more potential house flipping in Detroit's future...

I wonder if these new buyers know what sort glory hole they are buying into?

In Detroit, houses cheaper than cars...

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!"

At a weekend sale of about 300 Detroit-area houses by Texas auction firm Hudson & Marshall, the mood was marked more by fear than greed...

ROFLMAO!

Well I do believe Victor Davis Hanson nails it squarely with his commentary: Irresponsibility Can't Be Solved By Bigger Gov't

 
At 3/31/2008 2:46 PM, Anonymous The Masked Millionaire said...

The Masked Millionaire lives in Las Vegas and he can say without any doubt, "You can't throw a rock down the street without hitting a house that is in foreclosure."

 
At 3/31/2008 4:04 PM, Anonymous Anonymous said...

juandos the only house flipping that is going to go on in Detroit is when abandoned, stripped and wrecked houses are flipped on their sides and demolished.

Have a satellite peek at Detroit through Google Earth. Notice all those nice green spots between houses in "mature" neighborhoods? That is all that is left of once perfectly good houses--nothing except a patch of refuse encrusted grass and weeds.

 
At 3/31/2008 4:11 PM, Blogger Marko said...

Do they have broadband access in Detroit? If so, all they need to do is allow residents to own and carry firearms for protection (and civil order) and maybe I will move there. Telecommuting is the wave of the future, as long as you are allowed to keep your neighborhood safe!

 
At 3/31/2008 4:14 PM, Anonymous Anonymous said...

Prof. Perry

There is a wonderful T-shirt available at www.signals.com which might make a humorous addition to your wardrobe:

"I am the Grammarian about whom your mother warned you"

Appreciate your attention to one of my pet peeves, namely "it's" used as the possessive. While few of us will attain the standard of a William Safire or William F. Buckley, it doesn't hurt us to take a bit of constructive criticism particularly in an area that creates an impression on others. While we may not always appreciate it, our work is judged by its attention to grammar and spelling.

With regard to those who believe that the Detroit area is a complete disaster, I would suggest that you visit the districts surrounding Detroit such as Bloomfield Hills (Mitt Romney country) and look at other industries aside from automobile manufacturing. What you will find is a very vibrant and diverse economy. Something that is not reported on the 6 o'clock news.

 
At 3/31/2008 6:00 PM, Blogger juandos said...

"juandos the only house flipping that is going to go on in Detroit is when abandoned, stripped and wrecked houses are flipped on their sides and demolished"...

Cha! Ching!

Exactly anon @ 4:04 PM...

Then again is Kwame Kilpatrick just another indicator of what's wrong in general with Detroit and its citizens?

 

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