Detroit debuts the new house auction site.

**getmoore** · May-21-14, 11:02 AM

Originally Posted by detroitrbychoice

Did anyone go to the 4722 Avery open house? I didnt even know it was up on the list until too late. I was hoping for some additional pictures. Im probably going to bid on it....

Whoa! As of 12.00 pm today the bidding is at 50,700!

**brizee** · May-21-14, 02:15 PM

Well the pilot neighborhood is done.

Cheapest sold for 12,700, priciest for 39,400.

Average was 27,683. Alot more went on the high side so the median was 30,050.
The prices didn't seem to correlate to square footage or amount of work done.

Seems some bidders were [[and are) playing games. Several houses were adjusted and their prices lowered after investigation by the auction team. Seems more than winner is going after houses after they've already got one.

Seems some people have been chasing houses in the neighborhood through the entire bidding process. One tried on almost every house and didn't get one until the second to last. If the last bidder is disqualified [[already won a previous bid) another repeat loser may get one on the last day in East English Village.

Next up is Woodbridge. As expected it's going for alot more. At two hours to go it's already asking for 60 grand. At least 55% more than the most expensive EEV house. Of course it looks investors are trying to muscle in on this one.

**jt1** · May-21-14, 02:25 PM

Originally Posted by brizee

Well the pilot neighborhood is done.

Cheapest sold for 12,700, priciest for 39,400.

Average was 27,683. Alot more went on the high side so the median was 30,050.
The prices didn't seem to correlate to square footage or amount of work done.

Seems some bidders were [[and are) playing games. Several houses were adjusted and their prices lowered after investigation by the auction team. Seems more than winner is going after houses after they've already got one.

Seems some people have been chasing houses in the neighborhood through the entire bidding process. One tried on almost every house and didn't get one until the second to last. If the last bidder is disqualified [[already won a previous bid) another repeat loser may get one on the last day in East English Village.

Next up is Woodbridge. As expected it's going for alot more. At two hours to go it's already asking for 60 grand. At least 55% more than the most expensive EEV house. Of course it looks investors are trying to muscle in on this one.

Now over 67K. Craziness

**Spartan** · May-21-14, 09:57 PM

Originally Posted by jt1

Now over 67K. Craziness

Wow... $87,100 final price!

**mwilbert** · May-21-14, 11:48 PM

Originally Posted by Spartan

Wow... $87,100 final price!

Judging from the pictures, that isn't a bargain. To get it up that high, there must have been more than one person with an irrational desire for that house. I'm not criticizing, speaking as someone who has purchased a house for more than was sensible. There's more to life than being sensible all the time.

**motz** · May-22-14, 09:49 AM

Originally Posted by mwilbert

Judging from the pictures, that isn't a bargain. To get it up that high, there must have been more than one person with an irrational desire for that house. I'm not criticizing, speaking as someone who has purchased a house for more than was sensible. There's more to life than being sensible all the time.

It's a very hot neighborhood, and there are plenty of investors sitting on property in Woodbridge. Whoever bought this knows they either flip the house, or be safe in knowing they invested in a solid block that survived the worst and is still in great shape. Still too much to pay for all the renovations that need to be done, but to each their own.

**Eber Brock Ward** · May-22-14, 12:24 PM

Eh, $87K for the house and $50K in rehab gets you a $160k or more house for $137k.

Seems reasonable, and the purchaser was the same person that brought the "Lorax House" back from a roofless hulk a couple of blocks away.

**mwilbert** · May-22-14, 12:34 PM

I wouldn't think 50K in rehab would cover it. Maybe with a lot of sweat equity.

**Eber Brock Ward** · May-22-14, 02:35 PM

yeah, just going off of what a couple people i know who toured it and were thinking about bidding said [[both have rehabbed properties in w. village and other parts of the city already).

not sure how sweat equity played in.

**mwilbert** · May-22-14, 03:20 PM

In my experience, people are usually too optimistic about costs going into a project like this. When you start fixing stuff, you find more stuff to fix. But who knows, rehab projects are inherently a bit unpredictable.

**DetroiterOnTheWestCoast** · May-24-14, 10:49 AM

Not surprisingly, the two most recent auction homes - in Morningside - went for the lowest amounts so far: $9,800 and $10,200. If they were several blocks to the east in EEV they no doubt would have commanded higher prices.

I took another gander at the rules. You have up to 60 days to close on properties costing up to $20k, and up to 90 on those costing more. Since the 6 or 9 month clock for renovations starts at closing, you could conceivably stretch that out to almost a year from the time of a winning bid on a "historic" property by delaying the closing. I wonder what sort of access one might have before closing to get contractors into the house in order to prepare bids?

**DetroiterOnTheWestCoast** · May-27-14, 09:21 PM

Interesting developments on the auction front today.

1. Today was the first dual-auction, with a grand B-E place and a humble Osborn house. The former went with a high $70,300 and the latter for a very modest $9,500.
2. A bunch of new listings popped up today, including more in Morningside, and new EEV listings.
3. Perhaps most interesting, 3 of the original EEV listings are back.

I don't know what to make of item 3. Is it bad that the deals fell through, or a good sign that the city is really vetting the buyers? I wonder why they are relisted as opposed to being snapped up by other bidders?

As for the new listings, I love the turreted house on Yorkshire, including its interesting garage.

**LeannaM** · May-27-14, 10:22 PM

It's a good idea to require residency and fixing up the homes. That should avoid most speculators and absentee owners.

Some nice-looking homes on this site, though they will likely need a lot of work.

I hope the people who buy from this site do their homework. You probably won't know exactly what needs to be done until you walk into the house and check it out. Out-of-town buyers may not know which neighborhoods are the better ones, either.

**maverick1** · May-28-14, 11:07 AM

Originally Posted by DetroiterOnTheWestCoast

Interesting developments on the auction front today.

1. Today was the first dual-auction, with a grand B-E place and a humble Osborn house. The former went with a high $70,300 and the latter for a very modest $9,500.
2. A bunch of new listings popped up today, including more in Morningside, and new EEV listings.
3. Perhaps most interesting, 3 of the original EEV listings are back.

I don't know what to make of item 3. Is it bad that the deals fell through, or a good sign that the city is really vetting the buyers? I wonder why they are relisted as opposed to being snapped up by other bidders?

As for the new listings, I love the turreted house on Yorkshire, including its interesting garage.

Item 3 causes me to wonder how bad the speculating is in some neighborhoods. I knew it has been bad downtown but are the vultures really trying to feast on this new auction site?

**DetroiterOnTheWestCoast** · May-28-14, 11:31 AM

Originally Posted by maverick1

Item 3 causes me to wonder how bad the speculating is in some neighborhoods. I knew it has been bad downtown but are the vultures really trying to feast on this new auction site?

Were they speculators? Were they well motivated people but without the means to follow through? Did they get cold feet? I'd love to know.

**brizee** · June-04-14, 11:15 AM

Appearently they will be moving to the University District and Marygrove neighborhoods soon. Both are pretty close to where I currently stay.

The website could use some ancillary services.

-Maybe a listing or even seperate website for Detroit based engineering/general contracting services

-When you go to the open houses there are supposedly [[I was too late) financial institutions that will put a pretty significan amount towards a down payment. I don't know if it's a loan.

Will be interesting to see when they get around The North End or McNichols or 7 Mile East of Woodward. Both what's for sale and what responses they get.

**animatedmartian** · June-15-14, 06:42 PM

So far 33 homes have been auctioned off with a combined total of nearly $1 million dollars in bids or around $22,000 per house. Detroit's median home price is $11,000. This could mean that the value of Detroit's housing will be appraised for higher values in the near future.

....
The market has been based on rock-bottom foreclosure sales for the past seven years, so it's hard for appraisers to know how to value a property.

"In Detroit, 90 percent of a property's assessed value is based on comparable sales," Boudreau said.
So even if a home is exquisitely renovated, a gem of a property, it still will only be valued against what has sold recently nearby.

"I sold a house in the University District last year," said Austin Black II of City Living Detroit, a Detroit-based real estate firm. "It had brand-new windows, roof, completely done on the inside, new bathroom. It goes on the market for $189,000.
"The first lender we went with got it appraised for $120,000."
Eventually, the sellers worked with another lender and got a better valuation, but there isn't always a happy ending.
There is hope that the Land Bank auctions will help create a bottom for the market — showing what people are willing to pay for unrenovated homes — and push up appraisals.
"The auctions give a little bit of validity to the market," said Boudreau, whose company has appraisers in 35 states and values 6,000 properties a month. "That will help everyone else out. Plus it gets one more publicly owned property off the market. It's definitely going to help."

http://www.crainsdetroit.com/article...ue-for-housing

The article also mentions that during open houses, the Land Bank now shows preinspection reports so bidders can figure the approximate cost of rehabilitation before bidding for the property. Initially, the Land Bank didn't show that information until after bidders won the properties.

However, there's still the issue that most banks won't finance mortgages unless the house meets a certain level of habitability. With some houses estimating a need of at least $100K for rehabs, that'll definitely turn some people off. Currently, the only exception is in Marygrove where Talmer Bancorp Inc is offering $25,000 in forgivable loans. Also JP Morgan Chase with their big Detroit investment announcement a few weeks back is trying to create a program to offer loans to future buyers of the auction.

Currently, most of the houses coming up in the auction are in Old Redford, Osborn, and Cornerstone with a few sprinkled in other areas.

**ABetterDetroit** · June-15-14, 07:27 PM

Originally Posted by corktownyuppie

Yeah, but it doesn't bother me as much to pay 50% more in property taxes when I'm buying the house for 90% less.

The circle will be complete when as property values rise.... "when I moved here the taxes where half as much" then the famous "I can't afford to live here anymore because of the taxes"

**brizee** · July-01-14, 11:44 PM

The descriptions of the homes now include pre-sale inspection reports. Potential buyers now can get a more realistic remodeling bid before making a decision.

They also have some information on financing deals available in certain neighborhoods.

Nice to see that the website is actually improving as it goes along, instead of stagnating like so much around here tends to do.

And from the looks of the July 4th notice, they seem to be having fun around there too.

**DetroiterOnTheWestCoast** · July-05-14, 01:04 PM

A very different listing has been posted on the auction site. A four-family building in Southwest, with a gut-rehab that someone started. I wonder what the renovation timeline requirements would be for a multi-unit building - would it all need to be finished in 6 months from closing or only part of it lived in?

http://www.buildingdetroit.org/Listi.../1704-Infantry

**animatedmartian** · July-10-14, 06:02 AM

http://www.crainsdetroit.com/article...omes-help-with

Chase Bank is announcing that it will launch a $5.5 million dollar program with Liberty Bank to provide rehab loans and down payment assistance for buyers in the DLBA auctions.

To be eligible for the loans, buyers have to the home their primary residence, be a current Detroit resident [[not sure if that means prior to buying), participate in housing counseling, and demonstrate an ability to repay the loan as well as following the Auction rules.

To be eligible for down payment assistance, they have to meet the above criteria as well as have an income at or below 120% of the area median income which is around $32,000. Eligible residents will be able to get up to $10,000 in down payment assistance.

The program is aimed at homes that are in Boston Edison and East English Village and will eventually expand to other neighborhoods. If you check the auction site now, you'll see that homes listed after July 28th are labeled "Liberty Bank eligible" which is the above mentioned loan program.

**Spartan** · July-10-14, 11:13 AM

Originally Posted by animatedmartian

http://www.crainsdetroit.com/article...omes-help-with

Chase Bank is announcing that it will launch a $5.5 million dollar program with Liberty Bank to provide rehab loans and down payment assistance for buyers in the DLBA auctions.

To be eligible for the loans, buyers have to the home their primary residence, be a current Detroit resident [[not sure if that means prior to buying), participate in housing counseling, and demonstrate an ability to repay the loan as well as following the Auction rules.

To be eligible for down payment assistance, they have to meet the above criteria as well as have an income at or below 120% of the area median income which is around $32,000. Eligible residents will be able to get up to $10,000 in down payment assistance.

The program is aimed at homes that are in Boston Edison and East English Village and will eventually expand to other neighborhoods. If you check the auction site now, you'll see that homes listed after July 28th are labeled "Liberty Bank eligible" which is the above mentioned loan program.

This is pretty cool. As someone with fairly low amount of capital and a pretty decent job, the down payment could be a struggle for me if I want to participate. Glad to see they are partnering for this to encourage people in my boat to get in on this.

**DetroiterOnTheWestCoast** · July-10-14, 12:21 PM

Originally Posted by Spartan

This is pretty cool. As someone with fairly low amount of capital and a pretty decent job, the down payment could be a struggle for me if I want to participate. Glad to see they are partnering for this to encourage people in my boat to get in on this.

Perhaps that income threshold is appropriate for EEV and some other neighborhoods, but for Boston Edison? How could anyone with that low of an income ever rehab and maintain one of the decaying B-E behemoths?

Thirteen new B-E and Atkinson listings have been posted.

http://www.buildingdetroit.org/Home

I like the look of 1405 Chicago, and it has a new roof and seems to have already been gutted to some extent.

**mwilbert** · July-10-14, 12:45 PM

Originally Posted by DetroiterOnTheWestCoast

Perhaps that income threshold is appropriate for EEV and some other neighborhoods, but for Boston Edison? How could anyone with that low of an income ever rehab and maintain one of the decaying B-E behemoths?

Exactly what I thought when I read that, but I imagine that most people with that level of income won't qualify on the basis of not being able to repay the rehab loan, given the size of loan that would probably be needed. And not all B-E homes are gigantic, especially as you head west.

**Spartan** · July-10-14, 12:58 PM

Originally Posted by DetroiterOnTheWestCoast

Perhaps that income threshold is appropriate for EEV and some other neighborhoods, but for Boston Edison? How could anyone with that low of an income ever rehab and maintain one of the decaying B-E behemoths?

Thirteen new B-E and Atkinson listings have been posted.

http://www.buildingdetroit.org/Home

I like the look of 1405 Chicago, and it has a new roof and seems to have already been gutted to some extent.

Yeah, the income minimum does seem low. I can't imagine buying any house on that kind of salary, let alone one in B-E, while needing help with the down payment.

edit: whoa I totally read that wrong. You have to be UNDER 32K to get assistance? I no longer agree with the program. To me, that is encouraging people to buy that will likely fail. How are you supposed to succeed in purchasing, rehabbing and upkeep with low income and low capital like that?