IRVINE, CA-The number of available single-family homes plunged in recent years as the construction industry underwent a wrenching decline. The National Association of Realtors estimated that in April the nation still only had a 5.2 month supply of homes. But for those willing to take a chance by buying a fixer-upper bargain home, the best cities for this are mostly located in the Midwest, according to a recent report from RealtyTrac, a California-based online provider of real estate and foreclosure data.
Detroit leads all cities with 3,773 bank-owned properties built before 1960 and valued under $100,000. Rounding out the top three, Chicago and Cleveland, respectively, have 1,649 and 1,318 of these properties. Eleven of the top 15 cities are in the Midwest.
Homebuyers and investors who consider fixer-upper homes may find fewer competitors, enabling them to buy at a lower price point and build some quick equity with rehab, RealtyTrac reports. According to the firm's analysis, the nation has more than 51,000 potential foreclosure fixer-uppers.
“Low-priced homes are still plentiful in many markets, particularly in the form of foreclosures,” said Daren Blomquist, vice president of RealtyTrac, in a prepared statement. “While these homes may be in need of more work than a typical home and are certainly harder to find now than in previous years, buyers and investors willing to put in a little extra legwork and sweat equity can often find the best deals in their markets on these foreclosure fixer-uppers."
According to the report, the top 15 cities for buying these fixer-upper bargains are:
- Detroit, MI
- Chicago, IL
- Cleveland, OH
- St. Louis, MO
- Cincinnati, OH
- Philadelphia, PA
- Milwaukee, WI
- Phoenix, AZ
- Toledo, OH
- Birmingham, AL
- Dayton, OH
- Columbus, OH
- Jacksonville, FL
- Indianapolis, IN
- Lansing, MI
As GlobeSt.com reported in May, “A slow economy and tight financing mean that most consumers are willing to put aside their preferences to get a much lower price on an existing home—particularly distressed homes in foreclosure that we show on average sell for 30% below the average price of a non-distressed home,” said Blomquist. “Demand is still very strong for these distressed homes, where multiple offers and bidding wars are not uncommon. These bidding wars are starting to push the price of distressed homes and all existing homes higher, and over the next year the gap between the price of an existing home and new home should continue to shrink—which will likely push more homeowners to consider buying a new home rather than an existing home.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
