Friday, March 2, 2012

Homes for under $500? - Updated

Update: $500 homes link corrected

While we await Real Estate data for the month of February in the Village on the Edge of the Rainforest, one can't help but cast an eye to our neighbours south of the border and watch with utter amazement.

On a national scale experts predict that the bottom of the housing market collapse is still several years away, but that is not stopping buyers from plunging in oblivious to concerns they are not timing the exact bottom of the market.

And why not. In some cases prices simply can't go any lower without giving the houses away.

CNBC describes it as the greatest real estate fire sale in history, and it's not hard to understand why.

In some of the most foreclosure-ravaged parts of America, investors are buying up property and treating the housing market like it was some big box store and they are anxious shoppers wiping out whole shelves at a time.

Hedge funds and private equity shops like McKinley Capital Partners have started to quietly become landlords by buying up inventory. Joining them now are Main Street investors.

in Forest Park. Illinois, Condo units that sold for $180,000 during the boom are now going for as little as $13,500. People don't just buy one... they buy five at a time to rent out.

In California, Waypoint Homes, which has already purchased 1,000 single-family homes, got $250 million in funding in January from Menlo Park private equity firm GI Partners for more bulk buys.

The trend has accelerated as Fannie Mae releases a bulk sale of 2,500 homes. The conclusion of the robosigning scandal means bulk buying is about to undergo a quantum change. The coming auctions will not only put mammoth amounts of inventory up for bid; they will also streamline and automate current procedures.

In Charlotte, North Carolina, Cheryl and Bob Littlefield, who have five children, are already making the bulk buy work.

Two years ago they bought a lovely little house for $16,000. After putting in a few grand, they cleared $600 a month, after taxes. It went so well they bought another house. And then another. Now they own eight and are in the midst of exploring financing to do a bulk deal for several more.

Property management outfits have popped up all over the place, from the high-end down to online companies like, which charges as little as $25 a month.

But nothing holds up a mirror to our real estate market like what is going on in Detroit, Michigan where last year Business Insider profiled homes that you could buy for less than $500

Less than $500 each!

In fact, the 1,500 square foot home pictured above was listed for sale for only $250.

On February 12th of this year (2012), Business Insider profiled 13 Detroit homes you could buy for less than $100!

Granted, they are pretty sketchy looking homes... but when locals will drop $120 for a pair of Lululemon pants, what's $100 for a house?

In Vancouver you can't find a 1 bedroom basement suite where you could pay $500 for a month just to RENT.

The disconnect is beyond words.


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  1. Those homes are for rent at $500 not for sale.
    The first line of the ad plainly states "Cute house for rent".

  2. It's amazing what a difference an artificial line drawn along the 49th parallel can make.

  3. I think that you have made a mistake, it looks like these homes are for rent not for sale. What a difference it would make in my life if I could rent a place like that for $500 instead of the shoe box of a basement apartment for $900. Could this happen in Canada one day? I think you can own in Windsor for $40 000 but then you have to live in Windsor, no offence.

    1. Sorry, forgot to say love the blog and tune in every day to see what you've got next.

  4. Link to article on $500 homes has been updated and corrected. Thanks for pointing it out.

  5. I guess you have never visited Detroit? YES. It is that bad!! There isn't a place in Canada to compare these hoods!!