Housing Crisis: Detroit Tries to Find Homebuyers

Housing Crisis: Detroit Tries to Find Homebuyers

On a recent Sunday afternoon, Joy Santiago, a real estate agent, stood atop the front steps of a vacant eight-bedroom Colonial-style mansion, bullhorn in hand. “All right, 10 minutes,” she declared, ushering in the 50 or so people on the Lonely Homes Tour, an aggressive effort to sell foreclosed properties in Indian Village, one of Detroit’s last solidly middle-class neighborhoods.

Even with an abundance of home bargains — the redbrick, 97-year-old Colonial’s asking price was $29,000 — that’s no easy task. If there’s any city that symbolizes the most extreme effects of the nation’s economic crisis and, in particular, America’s housing crisis, it is Detroit. The median sale price of homes here has plunged from $59,700 in August 2005 to $8,000 just two months ago. Nearly one-quarter of the 4,200 homes for sale in Detroit are foreclosed, and already dismal sales fell nearly 20% from September 2008 to this year. In a city where the population has plummeted from 2 million in the 1950s to barely 900,000 today, vast stretches of once robust blocks have become fields of weeds and rubble.

Those grimmest aspects of Detroit city life are just a few blocks from Indian Village. For decades, the neighborhood managed to defy that fate. It was carved out in the late 1800s, barely three miles from Detroit’s downtown, as an enclave for the city’s emerging industrial barons. Even as Detroit’s wealth moved farther into the city’s suburbs in the wake of World War II, Indian Village’s Tudor- and Georgian-style homes — many with large backyards and carriage houses — attracted politically connected white collar professionals.

But not even the neighborhood’s lawyers, judges, principals and auto-industry executives have been immune to the economic crisis battering Michigan, the state saddled with America’s highest unemployment rate. Some have lost their homes. Some who left have been unwilling to lower their homes’ prices. At the same time, banks have become more discerning when it comes to issuing mortgages to prospective buyers. By one estimate, about 15% of the 350 homes that make up Indian Village are foreclosed.

Residents have taken various steps to prevent vacant properties from becoming magnets for criminals: regularly mowing lawns and installing curtains or even baby monitors. Detroit’s crime, failing schools and shortage of supermarkets selling fresh, reasonably priced fruits, vegetables and meats have been barriers to attracting the kind of professionals that have transformed other once struggling cities. One longtime resident, Steve Wasko, recalls real estate agents dismissing Indian Village, saying, “We don’t have time to come ‘down there,’ like ‘down there’ is crossing some line you never travel without a passport.” Some agents, Wasko says, simply gave the keys and alarm codes of homes to prospective buyers without bothering to vet their backgrounds. “That’s like giving the goods to potential thieves,” he says.

Last year a group of Indian Village residents launched a search for a real estate agent who would commit to the neighborhood. They soon found Santiago. She had left Ann Arbor, Mich., for Detroit in the late 1980s to work as a booking agent for techno-music DJs. By the late-1990s, she’d become a real estate agent and frequently worked in Indian Village. The timing was good back then: in her first year, Santiago says, she sold one house a week. “Everyone had a job. Everyone wanted to have the American Dream — homeownership,” the 41-year-old says.

One of Santiago’s first marketing ideas was what she christened the Lonely Homes Tour. The first tour, in September 2008, drew carloads of prospective buyers. More important, it generated considerable buzz about Indian Village’s mansions. The next installment came last month. Residents lined the leafy streets leading up to Indian Village with ads promoting the tour. Of course, they also touted the event on Facebook.

And lo and behold, there wasn’t a single empty seat on the two tours’ buses. A caravan followed Santiago to each of the seven stops. At one point, the caravan rolled up to a sturdy four-bedroom, 2,400-sq.-ft. Colonial built in 1925 that’s priced at $39,000. Then came the tour’s most expensive home: an eight-bedroom, 8,500-sq.-ft. 1917 Colonial. The price: $189,000. One woman covered her nose to keep away the smell of mildew. Her husband carefully took notes about the cracked wooden floors. People looked in awe inside the elevator of one house. Santiago stood by, answering questions about the house’s history and original owners and handing out business cards to the young and middle-aged professionals from the suburbs or downtown condos who were looking to trade up to bigger home at a bargain.

So far, Indian Village residents seem satisfied. Wasko says, “If I were a real estate agent, I’d act like Joy: I’d work my butt off on Sunday afternoon and not roll my eyes and say, ‘Maybe this won’t get the sale.’ ”

That effort just might be paying off. One day after the tours, Santiago says, she got several calls for second showings. About six people from the Lonely Homes Tours have made offers. “People heard about Indian Village, but without an event like this,” Santiago says, “they wouldn’t have made it.”

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