Toxic Water & Real Estate: An interview with a Realtor from Flint

What happens to a real estate market when the water is unsafe to drink? In light of the tragic situation unfolding right now in Flint, Michigan, I thought this would be a timely conversation. So I reached out to Realtor Ryan McFarlane who has sold nearly 1000 homes in Flint. This brief interview isn’t an exhaustive case study, but only one conversation centered on real estate (which has so much to do with people). I’d love to hear your take in the comments below.

Flint real estate agent interview - by sacramento appraisal blog - image purchased from 123rf and used with permission

Tell me about yourself. How long have you been in real estate? How much business have you done in Flint?

Realtor Ryan MacFarlane - MichiganMy name is Ryan McFarlane. I originally got into real estate around 2004. Overall I’ve sold over 3000 homes, and about 1000 of them have been in Flint; the company I work for now was actually started in Flint.

What is the population of Flint?

According to the census, the population is 99,763. However, it used to be 141,553 in 1990. When GM closed down their plants, it was devastating for the housing market and job market in Flint as a blue collar town.

What is the City of Flint like for those who have only read it about it recently?

I would say there are still some nice areas of housing. People are investing in Flint and trying to bring up the Downtown area. Though when you get off the beaten path, there are some rough patches. There are still good areas, but there are many bad areas. Some people say it’s all bad, but it’s not that way. There are also some good things going on, but the attention is often on the bad things.

flint listing - by sacramento appraisal blog

How much do properties tend to sell for in the city?

As of right now there are 352 active properties on the market in the City of Flint. The low end is about $500 and the highest listing is $229,000. In the last year the highest sale was $350,000, but it was over 6000 sq ft and a custom home in a historical area. Otherwise most properties in the city are going to sell under $30,000. The majority of sales are bank-owned properties. Sometimes properties literally sell for nothing since people call me and want to transfer the quitclaim deed to someone else. Sometimes a bank-owned property is in such bad condition that it is worth absolutely nothing. Other times a home will be bulldozed and the land will be sold (often a neighbor will buy the land). Some owners will not pay their taxes too because they might end up paying say $1000 for taxes when the property is only worth $500.

What is the median income of Flint residents?

The median income is $24,834 according to the U.S. Census Bureau.

flint vs sacramento

How much does a typical house rent for in Flint?

I would say on average about $500 per month.

How much are water bills right now in Flint? How does this compare to surrounding areas?

A family of 4 told me recently their bill was $250 per month, and the bill has to be paid even though they cannot use the water. Even vacant houses are being charged $50-60 per month for water. Some surrounding areas bill on a quarterly basis, and the quarterly water bill ends up being about the same as someone’s monthly bill in Flint.

NOTE from SacBlog: Most articles online state Flint residents are easily paying $140 to $150 per month for water they cannot use. This is obviously only an average since Ryan mentioned above that some residents are paying $250. Keep in mind $150 per month is 7% of a household’s monthly income (based on the median income in Flint). Also, if a home rents for say $600, the water bill is 25% of rent. Imagine a $1500 rental in Sacramento and having a $375 water bill (that’s 25%).

flint listing 2 - by sacramento appraisal blog

Some say it’s illegal to sell a house with toxic water. Is that true?

Legally there is nothing that says you cannot sell. There was a recent article from the Michigan Association of Realtors that said you can sell them, but you need to disclose the water issue on the seller’s disclosure form to make people aware of the water issue. Though buyers would have to be living in a cave to not know about the water issue already, so the disclosure is only a formality.

Some appraiser colleagues working in the Flint area say FHA and USDA have asked appraisers to verify where a home is getting water from since FHA/USDA don’t want to guarantee loans on properties using Flint water. Have you found this to be the case too?

Most of my deals have been cash buyers, though there have been people getting loans though too.

NOTE from SacBlog: Who is lending in Flint? Please comment below. I want to hear if any FHA and conventional lenders are making deals happen. Unsafe water is a clear health and safety issue, which would seemingly prohibit FHA deals from happening.

flint listing 3 - by sacramento appraisal blog

What impact are you seeing the toxic water issue to have on the local market in terms of values?

In some senses we may see a slight decline in sales and out-of-state investors are probably not going to be buying properties. But at the same time, sales are going to happen. From a practical standpoint the water issue has to be fixed. Nobody knows when that will happen, but we all know it will presumably happen. Flint is still one of the most affordable places to buy for locals. At the end of the day, values are already so low that they cannot go down much more than they have already. However, anything that is considered “higher-end” will probably be impacted since buyers will definitely look at what they can buy somewhere else for the same price (and not have water issues). But I don’t think there will be much effect under $30,000. You just can’t pick up homes in other nearby places for those low prices.

NOTE on rents from SacBlog: It’s interesting to consider what may happen with rents in outlying areas near Flint. If residents leave the city, will rents elsewhere increase? This reminds me of some reports of price gouging with rents in Porter Ranch in Southern California, which is the community where residents had to be evacuated due to an ongoing methane gas leak.

Have you heard or seen any impact on the commercial sector?

Yes. Businesses serve bottled water and they seem to be careful about water filtration. A few years ago GM had a nearby used motor facility just on the border of Flint. After doing some water testing, apparently the water was not good enough to spray on their motors.


I hope you enjoyed this brief interview. Thank you again to Ryan McFarlane for his time and insight.

Questions: What if anything stood out to you about what Ryan said? What would you expect to see happen in a real estate market when the water is toxic? What would happen in your market?

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  1. says

    Great job getting this interview Ryan. I was excited to read it. It is very interesting hearing the Flint story from a local home value and real estate market prospective. The biggest surprise in Ryan M’s answers is that some people are getting financing.

    • says

      Thanks so much Gary. I’ve been excited to share this. I hope people like it and maybe pick up a nugget or two for Flint conversations. What a sad situation.

      I hear you on the financing angle. In an appraiser forum I recently asked if there were any local appraisers working the Flint market because I wanted to know what they were writing in their reports about the water issue. At the time I didn’t have this post in mind, but I was simply curious what appraisers were doing. I was surprised to hear one appraiser say he is using an extraordinary assumption that the water in Flint meets EPA minimum guidelines (for FHA appraisals). I get that appraisers are not water specialists, so they really cannot be the party to verify if water is adequate or not, but using an extraordinary assumption in light of all the mass media coverage seems risky – especially if bottled water is being passed out to residents (which shows the water really does have issues). A different appraiser told me FHA and USDA have asked appraisers to verify the water source for any properties located in Genesee County.

      I’d love to hear anyone’s take.

      Thanks again, Gary.

  2. says

    The first thing that came to my mind is that I am curious about how much earnings a real estate agent can make in this area. Since there salary is based on a percentage of how much a house sells for I would think you need to be moving a lot of houses. That’s gotta be tough in that area. This was a very interesting interview Ryan, thanks for sharing.

    • says

      Thank you, Tom. I actually wondered the same thing. I’m guessing the REO deals come with a flat fee if they are under a certain price level. That’s really just a blind guess though. There are hard costs associated with selling, and those are very unlikely diminished because the price is low (MLS listing fee, photos, signs, online marketing, etc…). I’d love to hear from someone in the know.

  3. says

    Great investigative reporting! It is tragic and in my opinion, unconscionable. This has been 2 years. Even if people are drinking and cooking with bottled water, they still have to shower or bathe. Lead is not something you want anywhere near you. It’s funny that lead has been out of paint since 1978, but it is actually in these people’s drinking water. Crazy. Thanks for the post my friend.

  4. says

    Very interesting article Ryan and so tragic for those folks. The Wiki article cites a high volume of children being impacted-very alarming. Hopefully these folks can get the assistance they need. It will be interesting to measure the real estate market going forward. Thanks for the article.

  5. CT Appraiser says

    Flint, MI real estate strikes me as a classic ‘buy low, sell high’ long-term investment opportunity. In Feb 2013, Detroit was the nation’s pariah, yet less than 2 years later, (July 2015), it had some of the nation’s hottest housing success stories. In Flint right now, some owners are listing free houses b/c they’re desperate to get off the tax rolls. The entire world knows the city’s water woes, but that will get fixed fairly quickly, imho, due to the intense pressure that has even Barack Obama talking about it this week. So I believe Flint buyers with foresight may do very, very well on their bets starting at $500.

  6. says

    I enjoyed reading your interview. Hope they will be more like it in the future regarding other problem areas, perhaps in North California.

  7. Lori says

    I’m in a situation where a home I inherited has water that is flammable! I asked Dep to test it- they gave me results with over 20 contaminants MEK, acetone and then said it was a mix up with their field sample– my water is clear!! Yes you read that right!! Flammable water!! Mek acetone in a field sample – and I’m near a super fund ironically!! Now I’m being told to get house appraised to pay inheritance taxes?? I didn’t put this in my name yet?? What do you think it was built 1983 two story seperate two story garage – 13 acres! Person that lived here passed from cancer!

    • says

      Yikes Lori. That is a tragic situation you have. First though, I am so sorry to hear of your loss.

      I’m curious. Are there other homes nearby with the same issues? From a value standpoint it won’t be easy to appraise unless other homes are subject to the same issue (that would tell us what the market is willing to pay for a home with toxic water / potential issues with pipes / contamination (much like Flint homes I imagine)). Part of me wonders if the soil has issues though here since you mentioned you are near a Superfund site. If you haven’t checked the EPA’s website yet, I’d be curious to see if you can track down any more specific information on the nearby Superfund site and maybe how extent the damage is.

      I wasn’t sure if you were wondering about appraisals for inheritance / tax purposes, but that is a common thing. When someone inherits a property an appraisal is usually done based on the date of the previous owner’s death. I find the new owner learns about this type of appraisal and often reaches out to an appraiser maybe 3-6 months down the road. In short, an appraiser could inspect the property today but base the value on whatever date the previous owner passed away. If you sell for more down the road you will likely be taxed on the difference between the appraised value on the date of death and the resale amount.

      Let me know if you have any questions.

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