The $100 House: 'Wonderful and Sad'

March 20, 2009— -- Sarah Wagner and Jon Brumit closed a real estate deal today on a home they bought for $100, a sale price even lower than the closing costs.

Both artists in their mid-30s with limited incomes, they are taking a chance on moving from Chicago to a declining, working-class neighborhood of single-family homes, mostly built in the 1920s, in Hamtramck, Mich., a city on the eastern edge of Detroit.

"People feel very inclined to tell us, 'That's very dangerous. I don't know why you'd do that,'" Brumit said.

Their reasons are more than economic. They were recruited to the neighborhood by another pair of artists, Mitch Cope, 35, and Gina Reichert, 34, whose lives were already bound up in the risks of living there. For better or worse, Cope and Reichert saw a flicker of hope amid the ruins.

New statistics released Thursday show that Detroit's unemployment rate, already the highest of any large American city, rose to 22 percent from 17 percent between November and January. During the worst days of the 1930s Depression, national unemployment reached 25 percent.

More than 11,000 homes have been foreclosed in Detroit. The neighborhood where Brumit and Wagner are moving, and where Cope and Reichert already live, is one of the ground zeroes of the foreclosure crisis. It was once a Polish enclave, but is now a mixed neighborhood of Polish, African-American and Bangladeshi residents.

Three years ago, Cope and Reichert bought a former Polish deli that they converted to an art studio and home. They also run a storefront gallery called Design 99 not far from where they live.

When the foreclosure crisis hit, "a lot of houses started going empty," Cope said. "And that's when we became interested in doing something."

One reason home prices have plummeted so dramatically is that banks and mortgage holders simply want to clear the books of properties that generate tax obligations, maintenance and code violation fees. In the stock market, it's called "capitulation."