Detroit's plan to auction homes for as little as $1,000 is off to a relatively good start, with the bidding on some homes moving their eventual sale price as high as $87,000. While the number of homes sold remains relatively small, any success of real estate sales in Detroit is impressive.
The bids are made based on rules set by the The Detroit Land Bank Authority:
- Each property will be open for sale for only one day. Bidding will be open from 9:00 a.m. until 5:00 p.m.
- If any bid is made within the last 5 minutes that bidding is open, the closing time will be extended by 5 minutes.
- The bidding will open at $1,000.00. All bids must go up in increments of at least $100.
- To bid, click on the property that you want and then click on "Bid Now".
- If this is your first bid you will be prompted to provide your credit card information.
- The amount of each bid submitted will be posted immediately on the screen, so that the public knows the current bid at all times, together with the Bidder Name of the current bidder.
- The DLBA reserves the right to reject any and all bids and either remove a property from auction, or reopen bidding on it at a later date.
Properties are posted online for viewing at least a week before bidding closes.
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Recent sales have been for amounts well above $1,000. One home with four bedrooms, two baths and 2,350 square feet of space sold for $87,100 on May 21. Another with 1,400 square feet and three bedrooms sold for $35,400 on May 16.
The challenge for Detroit is that the auction process is a slow one to eliminate inventory of unoccupied homes in Detroit, which stretch well into the thousands. As car manufacturer left the Motor City, its population plunged from 1.5 million in 1950, to under 700,000 today. Detroit's city services, which include police, fire and emergency services, had been decimated before it entered Chapter 9. This leaves very few reasons for people to return to Detroit, except for the very low home prices.
Detroit's plan to sell homes is clever, but it is too little, too late.