Detroit House vs Parking Spot: Crazy Property Prices

by Silicon Valley Blogger on 2009-06-1721

Property prices gone wild! So this is what passes for prime real estate these days….

I thought we were in a real estate recession, but apparently, there are still places around the nation that command stratospheric prices. This is real estate irony at its best — a private, open air parking spot was snapped up for a cool $300,000 in Boston, while in Detroit, we get homes that average $11,500 at foreclosure prices.

Detroit House vs Parking Spot: Property Prices Gone Crazy

What’s even crazier is that the Boston parking spot has broken pricing records despite the weak economy. It beat the price for last year’s most expensive parking space, which went for a reported $250,000 and which likely threw the pricing curve for other such lots that normally go for an average $137,000. Here’s how the nondescript spot looks like:

Insane? Probably just as much as how insane it is in hard-hit Detroit, where foreclosures have mercilessly befallen neighborhoods due to widespread job losses (you can blame some of it on GM). Well, if you’re in the market to buy a foreclosure, you know where to look!

Just to show you how far home values have declined in some parts of Detroit, here’s an incredible story I came across: I can’t believe this tale about a couple who purchased an abandoned home for $100 with the following unbelievable particulars:

parking spot

Pricetag for the house: $100. The buyer called a real estate agent with the Department of Housing and Urban Development, who confirmed that bids on the foreclosed property started at $95 for the property, $5 for the house. There were no back taxes — no one seemed to be sure who once owned the house, it had been empty for so long.

“Inspection was fine and the foundation was good,” says the buyer. The inspector also adds: “If you didn’t mind scraping some peeling paint, doing some surface treatments, putting in new utilities, windows and repairing the roof … this could be pretty interesting.”

Our real estate market covers quite a wide spectrum here: from parking lots paved in gold to decrepit homes desperate for some TLC. What a contrast. I do find this to be more of a positive story than anything because of one thing — the fact that if you happen to be a handy do-it-yourself type, you can really snag some great deals at bargain basement prices. If you’re resourceful and don’t mind a fixer upper smack dab in a neighborhood that needs a bit of work and care, you won’t need $300,000 to buy a house in the United States these days. For that kind of money, you can now buy 3,000 houses in Michigan where you can build a whole community with your friends!

Copyright © 2009 The Digerati Life. All Rights Reserved.

{ 21 comments… read them below or add one }

EscapeSomewhere June 17, 2009 at 10:39 pm

I have seen some stories on the house prices in detriot. 300k for a parking space seems bizarre. Do they give loans for that? For 300k it seems you could just have a driver take you to work or get a taxi/limo every day for quite a while.

If you put 300k into some investment vehicle and it returned 5% that is a 15k a year or 58.8 dollars a workday. Personally I would rather just take a cab. That way I would not have to worry about driving and could get some work done on the way to work each day.

kosmo @ The Casual Observer June 18, 2009 at 9:29 am

(shrug) hey, brick is expensive.

Silicon Valley Blogger June 18, 2009 at 9:36 am

Kosmo, is it the brick or location of the brick? Either way, it seems excessive, and EscapeSomewhere’s idea of just using cabs all the time (or when you need to) should amount to less than a cumulative $300K (do you think?). Then again, if you own the spot, you can always turn around and sell the spot to someone with deep pockets later.

kosmo @ The Casual Observer June 19, 2009 at 6:38 am

It’s definitely the brick. Brick is way cool.


Stacy June 19, 2009 at 9:12 am

Repairable house for $100? W00t!!!

House surrounded by a few hundred other empty wrecks in a dying rustbelt city known internationally for its horrendous crime rate and total lack of prospects? No thanks

Silicon Valley Blogger June 19, 2009 at 9:31 am

Definitely a tradeoff: money vs risk. It’s like anything else right? In this case, it’s more of the high risk/low cost scenario. There are always going to be people who’ll take the deal — perhaps those who are already living in the surrounding areas. I used to live in a high crime area and when you’re living in it, it doesn’t seem as bad as what outsiders deem it to be….

Frank Curmudgeon June 19, 2009 at 1:41 pm

Brick looks good, but it’s a royal pain to keep clear of ice, which, having once parked regularly in that very alley, I can tell you is a big deal.

jon doe June 19, 2009 at 2:17 pm

until you get shot

Dominican Real Estate June 20, 2009 at 8:19 pm

I just came across a short sale potential in a section of Newark NJ that I’m totally thinking about.

Less than a two years ago the house was valued at $350,000. Now it comps out at less that $175,000

Its insane how drastic some of these markets have dropped.

Clare July 1, 2009 at 8:04 am

I think this is interesting to see, seems a little expensive for the car park space – I would want a nice car to park in it. As said as well above do banks secure against this type of load because how do you put a price on a car park space.

In Detroit now is the time to buy for anyone looking for a home or a property investment opportunity. I cannot believe the variation of price between the car park space and the property. It shows that somethings is worth what someone will pay for it.

Apartments Barcelona July 2, 2009 at 3:45 am

Personally I too would prefer taking a cab daily rather than investing 300K…

Dubai Property July 5, 2009 at 2:56 am

What about the possibility of buying a house and convert it into a parking space? Is it possible?

Barcelona July 6, 2009 at 2:17 am

Buying and Converting — This looks like a COOL IDEA!

Barcelona July 6, 2009 at 2:17 am

Buying and Converting — This looks like a COOL IDEA!

San Diego Foreclosure Properties August 1, 2009 at 3:43 pm

I’m having a hard time understanding how parking spaces could sell at such a premium in Boston when homes are selling in Detroit at some of the lowest prices of all urban areas in the country. I suppose it comes down to the old rule of location, location, location.

jessiev August 12, 2009 at 9:07 pm

that is crazy. i wonder what the neighborhood looks like, though – for that $100 house.

mcalpine August 13, 2009 at 12:04 pm

The reason the guy was able to afford to spend 300k on a parking lot in the first place is because he was educated, which made him smart enough to know that investing in something with a potential high end return in the future is a lot smarter than paying some taxi driver to take you to work everyday with nothing in return. Go figure!

The $100 house is also another stupid investment. Where is the property value going to come from in the long term? Does he plan to inject a couple grand into the remodeling of the house then 5 years down the road sell it to the highest bidder? And knowing all along the soaring crime rates and abandoned homes in the area are the very reason the property value was driven down in the first place? Who would be dumb enough to pay anything over $100.

Real Estate Rocks! August 29, 2009 at 8:25 pm

People can make a killing on investing in parking lots. Now might be the best time to do exactly that!

Michael January 8, 2010 at 8:57 pm

It’s tough to believe that someone would actually want to sell that parking spot. Looks like a great spot, what, with the brick and all, and $300,000 is a steal. $100 for a house, though? Insane… Psht who’s got $100 for a house?

Pardon my sarcasm.

Bob December 13, 2010 at 6:56 pm

Nice analogy!

Silicon Valley Blogger September 3, 2011 at 11:48 am

Found this interesting site on Detroit. It shows you how Detroit has turned into ruins. Are you forward thinking enough to take the risk and purchase real estate there at a big bargain price? Check out this typical run-down school:

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