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As neighbourhoods wilted in a blitz of foreclosures, prices sank like stones. The house was put on the market for $1,100 last January, but still found no takers. A would-be purchaser was also liable for a $4,000 bill in back property taxes and a large unpaid water bill. Desperate to get rid of a home that by then had been comprehensively looted of anything of value — including its front door — the bank lowered the price to $1, and eventually found a buyer willing to take a gamble that one day the market might recover.

There have since been several other reports of American homes selling for a dollar or little more, but the latest turns in the credit crisis have offered little hope that bargain hunters can turn a quick profit. The kind of decay that was primarily restricted to poor black neighbourhoods is spreading to much grander homes.

A short drive west from the barren wastes of Traverse Street lies the historic Detroit neighbourhood of Boston-Edison, named for two of the streets that form its boundaries.

It was here in 1904 that Henry Ford, then a budding automotive tycoon, built his first Detroit home, a sprawling mansion in Italian Renaissance Revival style, surrounded by elaborate gardens.

Today it is home to Jerald Mitchell, a retired anatomy professor from nearby Wayne State university, and his wife, Marilyn, who runs a local group that is attempting to save the Boston-Edison district from collapse. “We’re accustomed to adversity,” Mitchell admitted, “but the current situation is unprecedented.”

To a British visitor it seems utterly unthinkable that such a graceful, family-friendly neighbourhood, just a few minutes’ drive from the city centre, should not have buyers queuing up. Yet in some ways the plight of Boston-Edison seems even more shocking than the $1 home on Traverse Street — you wouldn’t expect to pay much for a derelict ruin in a largely abandoned black neighbourhood; but who could have thought that a six-bedroomed mansion in good condition on a beautiful boulevard lined with oak trees and handsome front lawns could be bought for only $30,000?

Mitchell and his wife belong to a neighbourhood association that is fighting to save Boston-Edison from the curse of “Detroitification”.

At a time when many of the affluent whites were fleeing the city to the suburbs, the Mitchells moved in at the Ford mansion determined to preserve a valuable element of the city’s history.

“We were urban pioneers who made a commitment,” said Mitchell. “And we weren’t alone.”

Over the years the district acquired a rare residential mix, with Jewish professors living next door to black professionals in a green and elegant enclave that bears comparison with Hampstead in London.

Yet the same financial forces that produced a $1 home on Traverse Street have emptied dozens of homes in the Boston-Edison neighbourhood.

From their elegant, wood-panelled living room on Longfellow Street, Victoria Koski and her English husband, Trevor, watched in dismay as foreclosure notices began to appear and homes around them were boarded up.

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