Residential homes worth $1?

At least one was in Detroit:

One dollar can get you a large soda at McDonald’s, a used VHS movie at 7-Eleven or a house in Detroit. The fact that a home on the city’s east side was listed for $1 recently shows how depressed the real estate market has become in one of America’s poorest big cities. And it still took 19 days to find a buyer.

It was actually sold for negative $9,999, as the bank was force to pay closing costs and real estate sales commissions. The house was gutted by looters prior to the sale and completely non-functional – still back taxes were over $5,000 (and likely accruing).

Intrinsic (or purely sentimental) value aside, homes are an asset like anything else, and assets are widely priced at the present value of future cash flows. The lender may well have made the right decision here.

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