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Investors and homebuyers can find repo houses for sale easily in Detroit, as thousands of cheap vacant foreclosed homes are available for sale in the city, according to the Detroit Office of Foreclosure Prevention and Response.
Over the past 3 years, the number of abandoned foreclosed properties in Detroit has soared from 46,000 units to78,000 units. Many of these foreclosures have been abandoned as Detroit residents left the city after the auto industry collapsed and made thousands of workers jobless.
At the peak of its industrial power, Detroit surpassed the two-million population level, but now the population has plunged to only around 830,000, leaving thousands of vacant foreclosure homes behind.
In Detroit, the majority of residential units are single-family homes as home builders built to respond to strong housing demand from workers in the auto industry. But early this year, General Motors and Chrysler filed for bankruptcy, closing their Detroit auto plants and closing the income sources for thousands of Detroit households.
In a recent auction of around 9,000 foreclosed houses and lots in Detroit, with many bids starting at $500, just 1,800 foreclosures were sold off, so investors who have vision and patience can still find homes and lots among the remaining foreclosures and then turn them into profitable properties.
The 9,000 foreclosure properties auctioned off last week were all houses and vacant lots foreclosed because of unpaid taxes since 2006. In addition to these foreclosures, investors can also find repo houses for sale among thousands of homes foreclosed because of the failure of homeowners to pay their home loans.
According to a report published by Detroit Free Press, the foreclosure crisis in Detroit was not caused by speculative construction or speculative investments that occurred in most other cities. A large majority of foreclosures in the city occurred because of the failure of the auto industry and the resulting high level of unemployment.
The unemployment rate in Detroit has reached a staggering 27 percent, with nearby counties also reaching double-digit jobless rates. Three suburban counties even have higher rates of foreclosure than Detroit because of the closure of auto plants in their areas. These are Eastpointe, Pontiac and Hazel Park, which were once populated by families whose breadwinners were working in the auto plants.
For investors looking to find repo houses for sale in Detroit communities with high rates of foreclosure, they can visit the zip code 48205, where one out of every 5.3 households is in foreclosure.