The Craig Fahle Show

Will Duggan’s Housing Auction Make Detroit Homes More Valuable?

June 14, 2014

In its first month, the Detroit Land Bank auctioned off 33 homes, allowing the public to bid on properties from cottages in East English Village to sprawling four-bedroom houses in West Boston-Edison.

From This weeks edition of Crain's Business: The Neighbors Wanted program, as Mayor Mike Duggan calls it, has drawn nearly $1 million in bids, with an average price of $22,000 per property.

That's significantly above the city’s median home price, which hovers around $11,000.

"The whole thing has been surprising," said Dekonti Mends-Cole, deputy director of the Land Bank. "We didn’t realize that there was such a level of pent-up demand. A lot of the people who are bidding are either Detroiters or individuals living in inner-ring suburbs."

One historic property was such a hot commodity that it crashed the auction website — buildingdetroit.org — and forced the agency to reschedule the auction even after the virtual gavel crashed down at $135,000. The 3,000-square-foot home later sold for $97,900 to the original winner.

Realtors and appraisers are cautiously optimistic that the auctions will help the city's real estate market rebound. Detroit is one of RealtyTrac's 10 hottest markets, with prices climbing in strong neighborhoods and inventory so tight that move-in-ready homes are snapped up within days and in all-cash deals.

"One thing for certain is that getting properties out of public ownership is a good thing," said Brandon Boudreau, COO of Detroit-based Metro-West Appraisal Co. LLC. "That will help the market no matter what."