April 2, 2012 at 7:21 AM ET
Ben Yonge stole away from a business conference last month to make a killing in real estate. As his colleagues broke for lunch, the Orlando broker closed on a nearby four-unit apartment building that in better times had fetched $120,000.
The price Yonge paid: $25,000.
The nation’s housing market is showing some signs of life, but the bust has left a glut of ultra-low-priced properties on the market – including thousands of homes nationwide priced at $10,000 or less. In 10 of the largest metro markets, there were at least 100 homes listed at $10,000 or below, including Atlanta (234), Baltimore (207) and Chicago (165), according to research conducted by Realtor.com for msnbc.com.
Yonge, president of Equity First Realty, a wholesale investment brokerage, called the prices in Orlando "absolutely ridiculous."
“But these are the types of deals you can come across. There are $19,000 condos in the heart of Orlando,” Yonge said. “We could probably count 10 to 15 listings under $10,000 in the Orlando area right now.”
There were 11 homes in that price range available in Orlando in February, the most recent data available for the figure.
Some homes are so cheap that a 14-year-old girl was even able to save enough money to buy one as a rental property in Florida, where she paid $12,000, according to NPR.
And then there is Detroit, which has sustained one of the heaviest housing haymakers among all U.S. cities. In the Motor City, at least 2,300 homes can be had for $10,000 or cheaper, according to the Realtor.com analysis.
“Detroit just has a lot of the characteristics that were some of most hard-hit in the early part of the downturn,” said Steve Berkowitz, CEO of Move Inc., which operates Realtor.com. The median price for existing single-family homes sold in the Detroit area last year was only $54,000, according to the Realtors.
Among the thousands of American homes listed for less than five figures, most are foreclosures – and some individual properties are literally worthless because nobody even wants the land on which they sit, Berkowitz said.
The housing market is rebounding in fits and starts, with sales of existing homes up about 9 percent over year-earlier levels, bolstered by record-low mortgage rates.
But "we’re not surprised” at the sheer volume of super-cheap dwellings on the market, said Berkowitz, adding that so many of those properties must go through a lengthy bank-transaction process that accompanies foreclosure sales.
The number of homes listed at $10,000 and below has risen over the past year in 22 of the 146 metro areas examined by Realtor.com, including Fresno, Calif. (from seven homes under $10,000 to 17); Wichita, Kan. (from 35 to 50); Greensboro, N.C. (from 18 to 33); and Los Angeles (from 10 to 18).
Such bargain-basement properties are vanishing, however.
While 17 cities still had at least 100 homes available for $15,000 and under in February, the number of listings in that price range declined in 16 of those markets since last year, including Atlanta (from 1,249 to 595), Chicago (from 847 to 306), even Detroit (from 5,092 to 3,334), according to Realtor.com.
At the bottom end of the market, Berkowitz said, “I think what you’re seeing is some healing.”
But he cautions that anyone considering grabbing a dirt-cheap property as an investment should understand the community, to be sure a housing-recovery plan is in place or in the works. The best bet is to focus on "high-density areas where the land is in proximity to jobs."
Opportunists like Ben Yonge are on the prowl.
His company plans to refurbish his newly purchased quadplex in Ocala with a fresh coat of paint, new carpeting and other small fixes.
“We’ll have it completely repaired and rental ready within a two-week period,” Yonge said. “Our property managers will go in and immediately start marketing these vacant four units for rent. So it will probably be 45 to 60 days to have them occupied. If they can then generate (in total) a $2,000 per month in rent, that’s about a 25 or 30 percent return on the investment.”
When Yonge drives around central Florida to check on his new units and other properties he arrives in a 2002 Cadillac Escalade – a car that cost him twice as much as the four super low-priced homes he just picked up.
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Bill Briggs is a frequent contributor to MSNBC.com and author of “The Third Miracle.”