Good guess - close. I live just north of Flint, Michigan in Mt Morris. I own a house and three city lots. The Land Bank has a “side lot” program where a property owner in good standing can purchase any adjacent lot for $25.00.
Yeah, those downsides can be pretty dramatic. In Detroit you might find that $100 house… but it carries $30,000 in back taxes, it’s far beyond repair, there are only ten occupied homes within that square mile and two are crack houses, the city has cut off fire and police for the area.
So you’re essentially paying five figures for a small lot with all of the disadvantages of a remote rural location, plus all of the disadvantages of a economically dead high crime city.
It all depends on the neighborhood. Buffalo never declined to the extent of Detroit, so you won’t see the 5,000 square foot mansions adjoining golf courses for $125K as in the Motor City. In Buffalo, that $30K house is probably going to be a small bungalow in a rougher neighborhood on the East Side. In stable middle class and upper income city neighborhoods, real estate is cheap compared to the nation as a whole, but square foot to square foot just as expensive as one of the better suburbs. The best bargains are in safe, stable old-school ethnic blue-collar neighborhoods like South Buffalo, Lovejoy and Kaisertown, where you can pick up a decent bungalow for about $50K to $80K; neighborhoods that aren’t “hot” by any stretch of the imagination, but they’re not the “hood”, either. A few examples:
DISCLAIMER: I am NOT a real estate agent. I got a warning of sorts the last time I posted a link to a real estate listing.
Buffalo’s real estate market didn’t crash in the recession. It was always dirt cheap.
I had a 4 hour layover in Detroit once
[rant]why are there no White Castles in the airport??!!! :mad: [/rant]
Mrs. Cad asked what I was going to do. I told her I had $20 so I was going to go out and buy a few houses.
Possibly, but
(1) You would most likely owe any back taxes to get the deal and
(2) Real estate is typically re-assessed on a 3 year cycle so even if it were reduced the tax reduction impact would not be immediate
(3) Depending on how you bought it, it may or may not be considered a valid “arm’s length” transaction for appraisal/assessment purposes
As a background note in many areas local property values are being hammered so hard by foreclosures and short sales it’s going to literally nuke the tax base when these properties enter the assessment rolls. Some states (like Maryland) are trying to pass legislation that will allow them filter out sales they classify as “distressed” and keep them from impacting the assessment database. At this point that would be the majority of sales currently being transacted.
I’ve always been quite fascinated by the Rust Belt cities. I have a soft spot for Detroit as well as Buffalo (my fiance is from there, and I’ve had a disproportionate amount of friends and ex-girlfriends from there. For whatever reason, I seem to be drawn to Buffalonians.) Whenever I browse through Buffalo real estate listings, I am flabbergasted by how cheap property there is, especially since I think it’s a lovely town (although apparently without jobs.)
And, incidentally, the suburbs of Detroit get quite pricey. Look at real estate listings in Royal Oak, for instance. Plenty of $400K+ houses there. You wouldn’t necessarily think it, given the reputation of Detroit, but you go 10 miles north by northwest of the city center, and you’re in a completely different world. It’s fascinating (and sad).
LOL. 
Just go on eBay…a lot of $20.00 Big D (and Flint) homes on there.
My taxes are under a grand a year…but as someone upthread pointed out, buying cheap/foreclosed homes may necessitate paying a whole lot of back taxes and unpaid water/sewer charges before you can take possession.
Some of Detroit’s suburbs also experienced the worst of the bubble. My parents bought a house in Livonia, one of the primest examples of suburban sprawl born out white flight a few decades earlier. They paid something around $150,000 in the mid 90s for a pretty ordinary post-war ranch home. Somehow Livonia became one of the “hot” suburbs during the bubble, and similar houses were selling for half a million right before the housing crash. And there were plenty of new developments popping up all over the place. Understandably, Livonia was one of the 'burbs with the highest foreclosure rates in the area.
Some of the suburbs actually had more going for them than thirty six square miles of strip malls, gas stations, and churches. Royal Oak, for one, remains a fairly desirable place to live, and it’s survived the bubble relatively well.
You could always get stucco.
Hijack: I’m in the UK and I don’t get the back taxes thing. Is it that you automatically take on these back taxes on purchasing a property that hasn’t had them paid or is it something you agree on with the previous owner?
In general, properties on which back taxes are owed are foreclosed, abandoned, or what have you (ferinstance, the owner died without leaving heirs, the owner moved and just let it rot, etc.). The city or county authority will continue to assess tax on the property until someone buys it, at which point the new owner will have to pay them.
Or less if you’re willing to buy a foreclosure. Here’s one for $5100.
http://cgi.ebay.com/5-Br-2-Ba-Home-Flint-Mi-/190557092010?pt=Residential&hash=item2c5e1678aa
Looks like a really nice home but that’s a seriously awful, high-crime, gang-infested neighborhood. I’m far from wussy but that’s an area I’d lock my car doors in just driving through in daylight, and the park is beautiful but a cesspool of drug dealing activity.
Maybe I was exaggerating about $20 homes on eBay (although I’ve seen eBay auctions start at about that) but I understand you can buy them about that cheap at auction - except the buyer then has to pay back taxes and water/sewer bills.
Royal Oak is a really nice town, sort of hip and urban, lots of lovely older homes and tree-lined streets, a cool downtown.
Wow, that’s harsh. Over here the debt remains the responsibilty of the owner – or renter-- and it’s up to the authorities to pursue them. If I understand this right a bank can repossess a property, allow taxes to continue to accrue then pass them on. Who becomes the owner if no heirs can be found? Over here if there is no will an estate goes through probate and if there are no legal heirs then it defaults to the state. I can only imagine the uproar if the state then sold property and demanded back taxes from the buyer!
This must make it very difficult to regenerate an area that has gone downhill, even once the economy and property prices improve.
Problem is…in a depressed area (like Flint, Detroit or Buffalo) the city or county in most cases will NEVER recoup tax monies from the original owner. Often, the original owners let the property go, because in the current climate, too many find that the back taxes + water + whatever costs are needed to make the property viable far exceed the worth of the property.
So, very often the original owners realise the property isn’t worth, say, $3,000 in back taxes and water bills, nevermind improvements or repairs, so they ignore all summons and the city ends up with the property.
Yes, it makes it very difficult to “regenerate” cities like Flint. That’s one reason why Flint and cities like it are overflowing with insanely cheap real estate - in the real world, there’s a lot of property that simply isn’t worth more than $500 by any metric.
[Groucho Marx]Oh, how you can get stucco[/GM]
You may also be buying it from one purported owner/leinholder/foreclosor, but there have been enough transfers and potentially-challengeable shortcuts in the original mortgage and subsequent chain of title that you are in no way sure 2-3 other people won’t claim ownership rights, someone may have been squatting there and make an adverse possession claim, etc., etc., thus making your nominal purchase price meaningless in comparison to the legal fees you’ll have to pay to sort it out. Oh – mold, asbestos, etc., etc., etc. abatement may be necessary, and you bought as is, without recourse against anyone.
I’m probably going to sound stupid here but I’m not a property owner and I’m ignorant of the subject. So are you saying that if I buy a house in 2012, I could be liable for taxes the previous owner didn’t pay in 2010? Even though I didn’t own the house in 2010 or have any connection with the previous owner?
I can understand if the county seized the house for unpaid taxes and is now selling it to pay off the debt. But I thought they had to recoup the unpaid taxes through the sale itself - not through selling the and then passing the old tax debt on to a new person.
Maybe, but it’s not like you’re going to get a bill from the county out of nowhere. If back taxes are owed on an abandoned/foreclosed property that you buy, the real estate agent showing the property will make it clear from the get-go.
But how am I liable for taxes on property I didn’t even own when the taxes were due?
The guy who owes the taxes for 2010? The guy who owned the property in 2010.
And if the debt still exists then how does the county legally justify seizing the property? I thought the seizure itself was supposed to clear the debt. What justification does the county have for seizing property if it’s not using that property as the payment of the debt?