The headlines tend to read something like: “China is buying up Detroit.”
In truth, there’s not much hard evidence to support that kind of dramatic claim.
But by all accounts, Chinese investors are eyeing Motor City real estate – they just don’t seem in a big rush to buy.
Are foreigners really buying up cheap land in Detroit?
When Detroit went bankrupt in July 2013, it made headlines all over the globe.
That’s how many people in China found out about the city’s glut of incredibly cheap real estate – sparking a lot of excited Internet chatter.
Then some Detroit real estate agents started talking about growing interest from Chinese property buyers. They reported some clients looking to snap up properties in bulk, and on the cheap.
And finally, a China-based international real estate website listed Detroit as the fourth most-popular U.S. city for Chinese homebuyers. But those rankings came from counting search terms, not tracking actual deals.
All this added up to some rather dramatic headlines, but hard numbers have been elusive.
So how might we gauge Chinese interest in vast swaths of Detroit real estate? Enter the Wayne County property tax foreclosure auction.
“One of the indicators of (if) is there actually interest from China – and are the funds flowing into Detroit – would be participation in our auctions,” says David Szymanski, Deputy Wayne County Treasurer. “Because our auctions sell thousands and thousands of parcels of property at very reasonable prices.”
In Wayne County’s 2013 auction, nearly 20,000 properties hit the auction block – about 90% of them in Detroit. Some could be had for as little as $500.
Three years ago the auction went online, and investors from all over the world could join in the bidding. But when Szymanski crunched the numbers for the most recent auction, he found that 99% of purchases still came from the U.S. – and most of those from Michigan (click here to see a list of top buyers).
And while a tiny portion did go to foreign investors from places like Canada, Peru, and Singapore, not a single one appears to have come from China.