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Comment by nikkwong | Hacker News Reader

Hah. I once worked with a guy who put essentially his entire life's savings into 10-15 of these Detroit properties a few years back in 2013-2014. Suffice it to say I was right--there's been little-to-no upward pressure on home pressures in the area, despite the fact that he thought he was soon to strike it rich.

The old mantra holds--like any publicly available asset--if it were a great deal--it would already have been sold!

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He's probably right about the appreciation but wrong about the timeframe.

He's probably right about the appreciation

I'm not saying you're wrong but I'm curious what you have to back that statement up. Detroit is rapidly losing population[0] with no end in sight. Typically for prices to rise, there has to be some kind of demand. I guess you could just gut the supply by wholesale tearing everything down and seeing if you can sell what's left.

0. https://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&...

Property eventually appreciates, you just have to wait long enough. Now, at the extreme you may need to wait longer than a lifetime, but that's not likely to be the case here. However, it could very well be more than 20 years depending on how much he paid.

I don't think it's unreasonable to hold an asset for that length of time if the projected value makes it worthwhile.

> Property eventually appreciates

Ghost towns say otherwise. Property usually appreciates, given enough time, but it's never a guarantee; Detroit is dying-globalization killed manufacturing-it's a bad bet to think it'll appreciate when much of the city is already abandoned.

Yup. You really need some momentum, or some hope of momentum. Cheap prices ain't gonna do it. Right now Detroit is essentially competing with rural areas in price, but giving none of the benefits of a city: proximity to jobs, vibrant culture, amenities. It has many of the disadvantages of a city, in excess, like crime. And the momentum is not positive.

Can Detroit rebounce? Surely. But I don't think a smart investor would make a bet on it, outside of specific neighbourhoods and projects.

Areas of Detroit are apparently rebounding [1] to the point where it's even a bit controversial. (Gentrification is forcing out some black-owned businesses.) But it's very uneven and, yes, I wouldn't bet on the rust belt in general.

[1] http://www.theguardian.com/cities/2015/feb/05/detroit-city-c...

Yep. People have been thinking Detroit would turn around since about 1955. And they've been wrong every year for 60 years now.

If Detroit ever returns it'll be slowly, organically, and not driven by speculation. Nearby neighborhoods are more attractive and inexpensive than downtown (Dearborn, Livonia, etc). Until higher-end businesses and lifestyles return to central Detroit, (not to mention basic city services), surrounding city property values will never climb.

I wish Dan Gilbert the best, but having grown up in the area, I've heard it all before.

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