Rush for Low-Priced Detroit Foreclosed Homes for Sale

by Peter Vernon on cities

Another batch of bargain-priced Detroit foreclosed homes for sale has been offered at auction by a private auction firm this month. Additional units are available for buyers at certain real estate websites.

The home prices at the auction, which ranged from $3,000 to $200,000, and the high number of bank foreclosed homes at the auction in Detroit, showed the still bloated inventory of foreclosures and the continued decline of house prices in many parts of the city.

In the Detroit metro area, nearly 48 percent of all mortgaged houses are underwater because of the continued fall in prices. Despite an encouraging uptick in home prices in February, house prices in the area are still expected to fall further, based on the research work of university analysts.

University of Michigan professor Dennis Capozza predicted that house prices in the Detroit area will fall further by about 30 percent over the next several years.

Nevertheless, while homeowners and housing officials are concerned about the surge in Detroit foreclosed homes for sale and the decline in prices, investors and rehab contractors have been rushing to make the situation profitable for them.

One former condo builder has seen a good opportunity in the crisis and is now benefiting from foreclosed homes in Michigan and from the Neighborhood Stabilization Program that was launched to mitigate the foreclosure crisis.

Bernie Glieberman formerly owned the big home building firm Crosswinds Communities, but the crisis shuttered it down, so he founded Home Renewal Systems to buy foreclosures, fix them and resell them under the NSP program.

According to Glieberman, the only viable housing business in the area during these times is that which is done through the NSP. He said that his firm earned $1.5 million last year and expects to earn $7 million this year from the houses that were repaired and renovated and from the additional 100 homes to be fixed and resold.

Glieberman is also spending time salvaging housing developments started by his failed firm Crosswinds Communities. He explained that there are still great opportunities for rebuilding in communities that have declining housing stock such as Westland, Ferndale, Oak Park and River Rouge.

The state of Michigan received $253 million in 2009 under the first NSP round of funding. With the additional $223.9 million allocated by the federal government to the state, Glieberman and fellow NSP contractors can expect to fix, resell and earn more from Detroit foreclosed homes for sale.

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