First home in Detroit's online auction sells for $30,100

This three-bedroom home was auctioned for $30,100 -- the first of three this week.

NEW YORK (CNNMoney)

"We had an open house on April 27th and more than 2,000 people showed up," said city councilman André Spivey, whose district includes East English Village, where most of the homes are located.

All bids start at $1,000. The first sale took place on Monday and drew 88 bids. The winning bid hit $34,100.

Spivey said that was a pretty strong price. The three-bedroom, 1,400-square-foot home needs a new furnace and water heater, but was otherwise in good condition.

A second home sold on Tuesday for $30,100. It also needs a water heater and furnace -- and a new roof and gutters.

And on Wednesday, a three-bedroom, 1,200-square-foot cottage needing roof and window repairs went for $42,200.

The average home in the area is estimated by Zillow to be worth about $40,000.

Related: How Detroit bankruptcy affects my life

Winning bidders in the auctions, which are run by the Detroit Land Bank Authority, must rehabilitate the houses and move someone into them within six months.

Spivey said the sales will slow or reverse blight, remove targets for vandals and squatters, and send properties back onto the tax rolls of the bankrupt city.

"Plus, I'm very excited to get some new neighbors," he said.

Detroit mayor Mike Duggan greeting attendees to an open house for auction homes with starting bids of $1,000.

Detroit plans to auction 11 more properties in coming weeks and represent a drop in the bucket. The city alone owns 16,000 vacant properties that were seized for unpaid taxes or other bills.

Bidders must register online, and sales are restricted to Michigan residents and companies. They must not have any building code or blight violations or tax foreclosures on their records.

Winning bidders have to come up with a 10% down payment within 72 hours and close and make a full payment within 60 days if the purchase price is less than $20,000, or within 90 days if it's more than $20,000.

First Published: May 7, 2014: 5:42 PM ET

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