Detroit fact of the day markets in everything

by on November 25, 2009 at 3:03 pm in Economics | Permalink

Here's all you need to know about the real estate market in Michigan: The 80,000-seat enclosed Silverdome, built for $55.7 million in 1975 to house the Detroit Lions, has sold for $583,000.

And you thought your home had lost its value during this recession.

Think about it this way: $583,000 will get you a decent, but not terrific, house in a nice neighborhood in Northwest Washington.  [TC: will it?]

According to this story from the Detroit News, the Silverdome — which is a bubble dome, pictures of which you can see here and here — was hoped to fetch at least $1.3 million; maybe as much as $3 million. The dome comes with 27 acres.

The full story is here and I thank Greg Finley for the pointer.

Tom T. November 25, 2009 at 3:29 pm

Even for that price I’d want them to throw in the Lions.

David Zetland November 25, 2009 at 3:40 pm

I sure hope that they don’t use this (SOLD!) as an excuse to subsidize construction of a NEW stadium!

Ted Craig November 25, 2009 at 3:49 pm

It was for sale because the Lions and Pistons already moved into new stadiums. The new owner claims he’ll use it for professional soccer. There were other offers on the table, but the city held out for money. At the time the Lions announced they were leaving (about 10 years ago), the property was considered very valuable.

Slocum November 25, 2009 at 4:42 pm

Here’s all you need to know about the real estate market in Michigan

Nah, not really. $580K will also buy you a nice, but not top-of-the-line house in Ann Arbor. The old Pontiac Silverdome is so absurdly cheap because the pro teams moved out years ago, the upkeep is high, and if you bought the property for the land only, you’d have to add in the cost of demolishing the stadium. And, lastly, it’s in the city of Pontiac — which is currently in receivership and has poverty and unemployment rates comparable to those in Flint and Detroit.

Brad Humphreys November 25, 2009 at 5:55 pm

There is some additional information in an article in the Globe and mail:

http://www.theglobeandmail.com/report-on-business/toronto-developer-acquires-pontiac-silverdome/article1374848/

The buyer is a small time Canadian real estate developer who sent in a bid without ever seeing the facility. He knows nothing about operating large sports venues. MLS wants nothing to do with him. There were only 4 bids submitted.

Stinky November 25, 2009 at 6:16 pm

$583k will definitely get you a nice house in many suburbs around northwest WA. It’ll also get you an upscale 2-bedroom condo in the fashionable part of downtown Seattle. (If you don’t believe me, I’ll sell you mine for that price.)

Lord November 25, 2009 at 8:08 pm

At 35 years old, it should be fully depreciated or close to it.

Simon Kinahan November 26, 2009 at 12:01 am

Round here, 583k is pretty much entry level. You might get a condo for that in. A house anywhere not next to the freeway sound barrier is going to cost more. And our house prices have started to rise again.

Andrew November 26, 2009 at 3:45 am

Subjective value wins again!

Maybe they could build an aircraft plant in it, but noone would go there because of the union presence. Who wants to be the one to roll the dice on the place that killed Detroit?

It’s not economists for subsidizing these things afaik. Except maybe in New Jersey for bad basketball teams where the land is almost free for the taking. It is the politicians that don’t believe in subjetive value. At least they don’t have to take the blighted Detroit property to build a stadium there.

http://www.nypost.com/p/news/local/brooklyn/top_court_eminent_domain_ok_in_nets_qrgy89FUr0TKb1VY62DiWI

Brian Courts November 26, 2009 at 8:22 pm

At that price, I am surprised the Red Wings, reported to be looking for a new home, didn’t buy it. While it would need to be changed for hockey, at these prices it seems to be as good as you will find in the Detroit area.

Huh? The Red Wings aren’t looking for a new home for the sake of a new home — they want something better than Joe Louis Arena, which the Silver Dome most certainly is not (especially for hockey!).

Also, the idea that the new owner is going to use an 80,000 seat stadium for soccer in the US is absurd unless they plan to cover about 70,000 of those seats.

ElChupacabra October 23, 2010 at 10:00 am

I think that the value of a property decreases over time.And it is normal because you can’t expect to sell something with the same price or even more after 30 years.Things tend to depreciate over time.Real estate Austin TX

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