Detroit on the brink of bankrupty??

[Joel Owens]

Just read this article. I knew Detroit wasn't doing well but this is really bad.

It would seem the city part is very unstable and not a place to invest with all the uncertainty surrounding it.

Anxiety in Detroit Over a Prized Car Trove

[Tom A.]

I agree with John. The likely outcome is a cleaner balance sheet and enhanced viability going forward, as in a corporate restructuring.

The threats to assets like the historical car collection or the truly outstanding art collection at the Detroit Institute of Art are worrisome from a cultural perspective but not likely to affect real estate investment.

There's a real difference in perspective between those on the "inside" and folks around the country. The talk about bankruptcy makes outsiders nervous, understandably. What locals think however is that it will likely make things better. The problems outsiders fear will occur have actually already happened, and most Detroiters have just had to adjust to poorer police response time, unmaintained parks and other issues with city services over the last 5, 10, or 20 years. There's even a certain resiliency that's developed in the neighborhoods with the knowledge that in some matters, you're on your own.

Despite all the issues, parts of Detroit are thriving. At a suburban REIA last night the speaker, owner of a RE licensing school and a licensed broker and appraiser herself noted that the highest increase in value in SE Michigan last year was in the Midtown Detroit neighborhood which went up 40%.

This is not a case of $5K houses now being worth $7K. :-) Midtown is home to universities, cultural institutions and medical complexes and one of the top destinations for young professionals that choose to live in the city. Rents are also spiking there.

See this 6/18/13 article from the Detroit News, "Downtown Detroit rents go through roof":

From The Detroit News: http://www.detroitnews.com/article/20130618/BIZ/306180020#ixzz2WsNorQNq