Motor City Revival Means 14-Fold Return for Home Bet
http://www.bloomberg.com/news/2012-09-19/detroit-mortgage-column.html
A two-story brick house in Detroit sold for $47,214 last month, two years after U.S. Bank seized it in a foreclosure. For the home, with blue-striped awnings and white shutters, it was the fourth owner since December, when investor Buy Right Properties LLC purchased it for $3,383.
Real estate values in some Detroit neighborhoods are surging as the states automobile industry recuperates and investors flip bank-seized properties. Home prices gained 7.2 percent in July from a year earlier, the citys biggest jump in more than a dozen years, according to mortgage-data firm FNC Inc. In comparison, an index of prices in the nations largest 100 cities increased 0.6 percent in the same period.
The combination of the auto industry comeback and the home market hitting bottom is pretty powerful, said Robert Dorsey, FNCs chief data officer, from his office in Oxford, Mississippi. Theyve been going to round-the-clock shifts in some of the auto plants, and that translates into housing demand for a city that was as low as you can go.
Private-equity firms and other investors are snapping up foreclosed homes, helping to buoy prices in areas where values plunged during the recession, such as Southern California, Arizona and Florida. The hardest-hit regions are leading a nationwide housing recovery being fueled by a tight supply of homes and Federal Reserve efforts to keep mortgage rates low.