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US Homes still selling for $1 in Detroit

Property Here - Tuesday, January 22, 2013

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TWENTY dollars doesn't buy much these days but in Detroit it will buy you a house - actually a dozen, with change left over.

Australia was this week named one of the world's most expensive places to buy real estate, so for those disheartened with the local market, look no further than the US city where homes cost less than a cup of coffee.

According to the website realtor.com, 47 houses in Detroit are listed for $500 or less, with five properties listed for $1 and several at various amounts between $50 and $80.

Unfortunately for the owners, banks and US economy at large, there is no catch, with some homes once worth 100,000 times more than their selling price. Most of the properties have been on the market for more than a year as buyers baulk at a ghost town of boarded up houses, regardless of the $1 price tags.

Constant foreclosures make Detroit more abandoned each day - between 2000 and 2010, the city's population fell from the nation's 10th largest city to 18th.

One in five houses now stands empty in the city that launched the automobile age, forged America's middle-class and gave the world Motown.

Detroit has been in decline for decades; its population is now well below a million. But the recent mortgage crisis and the fall of the big car makers into bankruptcy has pushed the city into a realm of its own, even among other property-battered locations across the US.

One-third of its residents live below the official federal poverty line, at 11 per cent Detroit's unemployment rate is well above the national rate, and the average price of homes sold in city last year has been put at $7,500.

Business Insider reported that Detroit’s unpaid property taxes totalled $17.6 million last year, but the city prefers homes to be occupied rather than have unsold lots.

Hence it still has some of the cheapest real estate on offer in the developed world, long after $1 homes became a thing of the past in other parts of the US.