700 Metro Detroit homes at auction will be going cheap
With prices ranging from $5,000 to $600,000, housing downturn could be an investor's dream.
Nathan Hurst / The Detroit News
DETROIT -- More than 700 Metro Detroit houses will hit the auction block this weekend as lenders try to get rid of foreclosed properties that have languished on the market for months -- even years, in some cases.
The auction, which begins today and runs through Sunday, features homes with estimated market values ranging from $5,000 to more than $600,000 in communities from Detroit to Bloomfield Hills, according to Hudson & Marshall of Texas Inc., the Dallas-based property liquidation firm handling the event.
Company spokeswoman Crystal Wright said the auction will be the largest in the firm's history.
"The bottom line is that the housing and mortgage market fallout has created a lot of business for companies like Hudson & Marshall," Wright said. "It's definitely unfortunate for the original homeowners, but the foreclosure market is creating a lot of opportunities for some would-be buyers that may have felt priced out of it before."
The firm held its last auction in Detroit back in May, when about 300 homes hit the block; similar-sized events have been planned throughout the fall in cities across the country.
The auctions are the end result of a rash of foreclosures nationwide, many caused by payment defaults in adjustable-rate mortgages as the loans' interest rates have reset to higher levels -- along with the payments.
As homeowners fell behind on the mortgage payments for their houses and condominiums, banks took the properties back and attempted to sell them to recoup their costs. But an oversupply of properties and a lack of buyers have left many of those foreclosed homes sitting stale on the market, while still draining funds from the banks to pay for utilities, maintenance and insurance costs.
Many of the homes up for auction this weekend will sell for well below their market value, according to David Webb, a Hudson & Marshall executive in charge of the company's home auction division.
Most have an undisclosed minimum reserve price, although some marked as "absolute sales" will go for the highest price, however low it may end up being. The company says more than 90 percent of winning bids are accepted on properties, which are being sold "as is."
Wright said both the frequency of the company's auctions and the number of homes sold have increased as the nationwide residential real estate market weathers a rough and tumble downturn. Michigan's market has been particularly hard hit, with Metro Detroit home prices falling quickly as foreclosure rates have skyrocketed.
In August, the state had the sixth highest number of foreclosure filings in the nation, a total of 15,565, according to data released earlier this week by RealtyTrac, an Irvine, Calif., company that tracks such data. That's the equivalent of one filing for every 288 homes, an increase of 126.68 percent over last year.
A majority of those foreclosures are concentrated in southeast Michigan. Wayne County, for example, ranked fourth among U.S. metropolitan areas in foreclosures last month, according to RealtyTrac. Other states with high foreclosure rates include Nevada, California, Florida and Arizona.
Bill Nazur, a Los Angeles-based foreclosure market expert, said this weekend's auction could prove to be fruitful for buyers and investors seeking a good bargain, but he speculated that turnout at the event could be stymied by the region's huge glut of homes.
If the 2007 Wayne County Property Auction held earlier this week is any indication, he could be right. County Treasurer Raymond J. Wojtowicz called that auction off Tuesday after only 205 of 2,600 properties were sold to reclaim unpaid tax debts.
Nazur said lucky buyers willing to take the properties on as long-term investments could stand to turn decent profits. But, he cautioned, auctions like these are no way to make a quick buck.
"These are long-term investment properties," Nazur said. "If you're buying in an area like Detroit with all of that inventory, you're not going to turn a profit overnight."
With prices ranging from $5,000 to $600,000, housing downturn could be an investor's dream.
Nathan Hurst / The Detroit News
DETROIT -- More than 700 Metro Detroit houses will hit the auction block this weekend as lenders try to get rid of foreclosed properties that have languished on the market for months -- even years, in some cases.
The auction, which begins today and runs through Sunday, features homes with estimated market values ranging from $5,000 to more than $600,000 in communities from Detroit to Bloomfield Hills, according to Hudson & Marshall of Texas Inc., the Dallas-based property liquidation firm handling the event.
Company spokeswoman Crystal Wright said the auction will be the largest in the firm's history.
"The bottom line is that the housing and mortgage market fallout has created a lot of business for companies like Hudson & Marshall," Wright said. "It's definitely unfortunate for the original homeowners, but the foreclosure market is creating a lot of opportunities for some would-be buyers that may have felt priced out of it before."
The firm held its last auction in Detroit back in May, when about 300 homes hit the block; similar-sized events have been planned throughout the fall in cities across the country.
The auctions are the end result of a rash of foreclosures nationwide, many caused by payment defaults in adjustable-rate mortgages as the loans' interest rates have reset to higher levels -- along with the payments.
As homeowners fell behind on the mortgage payments for their houses and condominiums, banks took the properties back and attempted to sell them to recoup their costs. But an oversupply of properties and a lack of buyers have left many of those foreclosed homes sitting stale on the market, while still draining funds from the banks to pay for utilities, maintenance and insurance costs.
Many of the homes up for auction this weekend will sell for well below their market value, according to David Webb, a Hudson & Marshall executive in charge of the company's home auction division.
Most have an undisclosed minimum reserve price, although some marked as "absolute sales" will go for the highest price, however low it may end up being. The company says more than 90 percent of winning bids are accepted on properties, which are being sold "as is."
Wright said both the frequency of the company's auctions and the number of homes sold have increased as the nationwide residential real estate market weathers a rough and tumble downturn. Michigan's market has been particularly hard hit, with Metro Detroit home prices falling quickly as foreclosure rates have skyrocketed.
In August, the state had the sixth highest number of foreclosure filings in the nation, a total of 15,565, according to data released earlier this week by RealtyTrac, an Irvine, Calif., company that tracks such data. That's the equivalent of one filing for every 288 homes, an increase of 126.68 percent over last year.
A majority of those foreclosures are concentrated in southeast Michigan. Wayne County, for example, ranked fourth among U.S. metropolitan areas in foreclosures last month, according to RealtyTrac. Other states with high foreclosure rates include Nevada, California, Florida and Arizona.
Bill Nazur, a Los Angeles-based foreclosure market expert, said this weekend's auction could prove to be fruitful for buyers and investors seeking a good bargain, but he speculated that turnout at the event could be stymied by the region's huge glut of homes.
If the 2007 Wayne County Property Auction held earlier this week is any indication, he could be right. County Treasurer Raymond J. Wojtowicz called that auction off Tuesday after only 205 of 2,600 properties were sold to reclaim unpaid tax debts.
Nazur said lucky buyers willing to take the properties on as long-term investments could stand to turn decent profits. But, he cautioned, auctions like these are no way to make a quick buck.
"These are long-term investment properties," Nazur said. "If you're buying in an area like Detroit with all of that inventory, you're not going to turn a profit overnight."
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