'I bought a house for $1,000'

NEW YORK (CNNMoney)

Antjuan Wyatt and his wife recently closed on a three-bedroom, 1,500-square-foot house in a leafy, middle class Detroit neighborhood.

The house needs some work -- new furnace, new plumbing, new windows. But that's OK, because Wyatt bought the place at auction for $1,000.

"We were looking for a home in the suburbs, but the prices were too high," said 27-year old Wyatt, who works at a local Chrysler plant and dabbles in real estate on the side. "I was surprised I got this for $1,000."

In four months (and $30,000 in repairs), Wyatt hopes he can move into the refurbished gem with his wife and their two kids.

Wyatt bought his home through a new program run by the Detroit Land Bank, an entity charged in early 2014 with addressing the huge number of vacant homes in the city. While some cities struggle to find innovative ways to build new housing, Detroit struggles to manage the homes in place.

The problem is hard to overstate. In the early 1950s, 1.8 million people lived in the city. Last year, the population was 700,000.

"We have housing stock for over a million people who don't exist anymore," said David Szymanski, chief deputy treasurer in Wayne County, which includes Detroit. There are currently 80,000 dilapidated properties in Detroit and 100,000 empty lots -- a third of the city's total. Tens of thousands more homes face foreclosure.

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The county tries to auction these homes, but it doesn't always work, said Szymanski. Of the 30,000 homes auctioned in the last three years, owners of 22,000 didn't pay property taxes. This lack of tax revenue is a main reason why Detroit can't keep the lights on and the streets clean, which leads more people to leave the city, which leads to more foreclosed and eventually abandoned homes.

In many cases, the taxes aren't paid because unscrupulous landlords or speculators would intentionally let the county foreclose, and then just buy the house back at auction for a fraction of what was owed in back taxes.

The county is trying to fix this, and has enacted a rule allowing a home to be seized if it isn't torn down within six months or improved within two years of purchase.

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The land bank is trying to avoid this altogether. Its auctions only let people buy one home a month -- discouraging speculators and developers. They also require that buyers not owe any back taxes or have any housing code violations.

"We want people moving into them, we want families moving into them," said Craig Fahle, a land bank spokesman. "That's what's going to reestablish the real estate market in this town."

 

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The idea is to get more people into homes like Kate Daughdrill, who bought a three-bedroom house at a county auction in 2011 for $600.

Daughdrill, 29, has since bought seven other vacant lots around her house, and now runs an urban farm in addition to working as a visual artist. The first year after she bought her home, she raised a pig and traded the meat for electrical work.

While Detroit's population is still declining, these cheap homes have proven popular with creative types like Daughdrill, who can then spend more time on their passion and less trying to pay the rent. Equally important is the chance to help with the rebuilding of Detroit.

"When people are present and show care for a home, they can transform that home and that whole block," she said. "Having a presence starts that shift."

James Haddrill, a 35-year old sculptor who grew up in the Detroit suburbs, bought a three-bedroom house a block away from Daughdrill at a 2011 county auction for $500. When he bought it, it was being used as a crack house.

James Haddrill in front of the hosue he bought for $500

"It was filled with clothes, couches, mattresses," said Haddrill, who evicted the occupants himself and now uses the house primarily as a studio. "Cleaning it was one of the craziest experiences of my life."

All these people said buying a home through the land bank or the county was a relatively easy process. Haddrill suggested they market the program to artists in other cities -- like New York -- where space is becoming prohibitively expensive.

Wyatt said city offerings -- especially the schools -- will have to get a lot better before more people move to Detroit.

Both the county and the land bank are marketing these homes, but buyer interest will have to grow quickly if they want to avoid even more vacant buildings -- the county is set to foreclose on a record 80,000 homes in 2015.

What's innovative about your city? Let us know by posting your photo and description to #CNNCities on Instagram. 

One property insurance claim can hike your premiums by hundreds

File just one property claim to your insurer and you can expect to see your premiums soar by hundreds of dollars in some states.

On average, filing a single claim -- for anything ranging from a stolen bicycle to tornado damage -- will result in your monthly premium being raised by 9%, according to a report released by InsuranceQuotes.com. File a second claim and premiums climb by an average of 20%.

"Winning a small claim could actually cost you money in the long run," said Laura Adams, InsuranceQuotes.com's senior analyst. "Homeowners need to be really careful. Even a denied claim can cause your premium to go up."

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And the size of the claim has little impact. Filing a small claim increases your rates by just about as much as filing a catastrophic one. "The insurers have found that people who make a claim are more likely to make another," said Adams. "You've become a riskier customer."

Yet, the type of claim does matter. Liability claims, such as from personal injuries, are the most expensive type of claim, with insurers raising premiums by an average of 14%, InsuranceQuotes.com found.

 

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Other claims that lead to big premium increases are theft and vandalism, which often indicate that the home is in a neighborhood that is unstable or falling prey to blight. In bad neighborhoods, these crimes can recur, and the high premiums reflect that.

The premium increases also vary greatly by state. Homeowners in Wyoming saw the biggest increase in their premiums -- an average of 32% -- after a claim was filed. While the hikes are high, the state tends to charge fairly low premiums of about $770 a year, considerably lower than the $978 national average.

Policyholders in Connecticut, Arizona, New Mexico and California also saw large hikes of 18% or more.

Meanwhile, homeowners in Texas, where insurers are not allowed to raise premiums on the basis of a single claim, saw no increase. And homeowners in New York and Massachusetts paid very little more after filing claims.

Average premiums range from a low of $513 a year in Idaho to $1,933 in Florida, where frequent hurricanes drive insurance costs up.

Once your premiums are raised, it can be difficult to get them reduced.

Insurers keep a database called the Comprehensive Loss Underwriting Exchange, or CLUE, which tracks seven years' worth of your auto and property insurance claims, as well as any inquiries you may have made about a claim. The database then compiles a report based on your claims history that is then used to determine whether to cover you and how much to charge.

The information is available to all insurers so even if you switch providers, your rate with the new carrier may be just as high.

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"You can't escape your claim history," said Adams.

But you are not completely without hope. Here are some ways to try and keep your homeowner's insurance costs down:

Raise your deductible. But not so high that you can't afford to pay out-of-pocket costs if damage occurs.

Don't make small claims. Getting a few hundred dollars back if a tree limb falls on your shed may feel good but you could be paying that back to your insurer over the next few years -- and then some.

Don't use homeowners insurance as a maintenance tool. Don't file a claim to pay for small repairs, such as when wind blows some old shingles off your roof. Use it for catastrophic repairs only.

Shop around often. Look for quotes once a year. There's lots of competition in the industry and you may be able to buy equal coverage and service for a lower price. 

Why everybody is moving to Texas

NEW YORK (CNNMoney)

More Americans moved to Texas in recent years than any other state: A net gain of more than 387,000 in the latest Census for 2013. And Austin was the fastest growing major city.

Jobs is the No. 1 reason for population moves, with affordable housing a close second.

"It take two things to draw people inland in big numbers: jobs and housing affordability," said Nela Richardson, chief economist for the real estate broker Redfin.

Texas and other heartland states have two advantages that translate into affordable housing: Plenty of cheap land around cities and easy regulations that enable developers to build quickly.

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Nine of the top 10 fastest growing U.S. metro areas last year were ones where homes were more affordable than the U.S. average, according to Redfin. Many were in Texas, Oklahoma, Utah and other heartland states.

Five Texas cities -- Austin, Houston, San Antonio, Dallas and Fort Worth -- were among the top 20 fastest growing large metro areas.

Some smaller Texas metro areas grew even faster. In oil-rich Odessa, the population grew 3.3% and nearby Midland recorded a 3% gain.

 

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Jobs was the main driver in Austin, where population rose by 2.6% between 2012 and 2013. That's nearly four times faster growth than the United States as a whole.

Jobs are plentiful in Austin, where the unemployment rate is just 4.6%. Moody's Analytics projects job growth to average 4% a year through 2015.

Just as important, many jobs there are well paid: The median income of more than $75,000 is nearly 20% higher than the national median. The median home price is $243,000, higher than the U.S. norm, but a price level that income can support.

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During the boom years, population actually grew faster in high-priced markets like New York and San Francisco.

 

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Rapid price gains made buyers less concerned about overpaying for homes. Plus, they had banks lining up to lend them money.

Once rapid home price jumps were taken out of the equation, affordable housing markets with strong economies became even more attractive to people looking to relocate. 

Make a shipping container your home for less than $185K

NEW YORK (CNNMoney)

One of the biggest Chinese imports to the United States these days are affordable, eco-friendly houses -- or at least the building blocks for them.

Most international freight today travels in huge steel containers that can stack on the decks of ships and be offloaded onto the backs of tractor trailers. Sometimes the containers get shipped back to Asia. But most of the time, they sit idle around U.S. ports.

Architects have figured out a way to make these containers useful: Convert them into guesthouses, studios, even single-family homes.

Architect Adam Kalkin's Quik House, for example, is a 2,000 square-foot home that is made out of six shipping containers. The two-story home offers three bedrooms and two and a half baths, a laundry room, pantry, mudroom and other amenities.

The basic price of the Quik House is $119,000, which includes the six modified containers with stairs, walls, glass for windows, pre-fitted electrical and plumbing systems and aluminum glazing frames that are factory installed.

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But there is still a lot of work to be done: Buyers are responsible for buying the land, securing building permits and getting the home hooked up to local water and sewer lines and the gas and electric grid, among other things.

The typical cost to assemble and hook up the Quik House and make it habitable is about $184,000.

But there are add-ons, too. Like a stainless kitchen package, with Viking stove, dishwasher and a fireplace for an extra $25,000.

 

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And while the home is pretty eco-friendly from the get-go (you're already recycling six shipping containers), you can also add on options like a solar power system or "green" roof.

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Getting your own Quik House can be, well, quick. It can be delivered within 10 weeks and assembled on site in a day, according to the builder. From ordering it online to the day you move in shouldn't take longer than six months. (There is currently, however, a six-month waitlist.)

Here's how much it will cost you to make a container your home: 

From container to home: Breaking down the cost

Item	Cost
Base price for six factory modified containers	$119,000
Site preparation (excavation, laying foundation, etc.)	$14,000
Assembly	$2,500
Heating and cooling system	$7,000
Plumbing	$7,000
Electrical	$7,000
Roofing	$3,000
Insulation	$5,500
Flooring	$5,000
Shelves and closets	$2,000
Doors and hardware	$2,000
Glass installation	$4,000
Wall finishes and painting	$6,000
Total	*$184,000, plus shipping

Source: Quik Build LLC.
Note: Does not include the cost of the land. Shipping costs can range from $3,000 to $12,000 depending on how far the home is from Quik Build's factories in New Jersey or Liverpool, England.

Baby Boomers face big housing crunch

NEW YORK (CNNMoney)

America's Baby Boomers are facing a serious housing crunch, with many expected to struggle to afford their homes come retirement.

By 2030, the number of adults age 65 and older will more than double to 73 million, according to a report by the Harvard Joint Center for Housing Studies and the AARP Foundation.

And many of these retirees will need to put so much of their income toward housing -- more than 30% --that they will have to cut back on other expenses like transportation, medical care, even food, the report found.

A big part of the problem: many Baby Boomers will enter retirement with less savings and more debt than previous generations.

A growing number of seniors are carrying mortgage debt into retirement, with more than 70% of younger Boomers ages 50 to 64, and 40% of those age 65 and older still owing money on their home in 2010. Even worse, they owed even more money on their loans, which is putting many older Americans in a "financially precarious" position, the report found.

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Meanwhile non-housing related debt among the 65-plus crowd climbed from an average of $4,300 in 1992 to $7,200 in 2010, mainly as a result of credit card and auto loan debt.

Adding to Boomers' burdens, less money is expected to come in. Over the next decade, the number of households age 65 and older living on less than $15,000 a year -- below the poverty level for a two person household in 2014 -- is projected to grow by nearly 40%.

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The authors of the report argue that the government isn't doing enough to help low income seniors. In 2011, just one-third of low income seniors who were eligible for federal rental assistance received any assistance at all.

 

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The report recommends a variety of fixes, including property tax relief for seniors, increased federal rental assistance and improved programs to help seniors "age in place" in their homes, instead of in costly institutions.