Sunday, April 24, 2011

The Census on vacancy rates plus the Good, the Bad, and the Ugly about March 2011 real estate in Metro Detroit

It's been more than a month since I promised you all an analysis of the Census for Detroit. I haven't exactly followed through, even though the Census figured in several posts since then, so it's high time I bring you some more news inspired by the Census, even if it is a bit old.

Detroit News: Empty homes dot Oakland County's upscale suburbs
Laura Berman
Last Updated: April 07. 2011 5:47PM
Numbers don't lie: They tell unpleasant stories, including new census numbers pinpointing high vacancy rates in some of Oakland County's most elite suburbs.

The half-secret behind many of the well-maintained facades and manicured lawns of some of the area's most lavish properties is that nobody's home.

Birmingham (9.4 percent) and Bloomfield Hills (10.2 percent) showed vacancy rates significantly higher than 10 years ago. Those rates are similar to Detroit's vacancy rate a decade ago.
Those of you from metro Detroit reading this entry should understand exactly what this means. For those reading who are not familiar with the area, these two towns are very upscale suburbs, the equivalent of Beverly Hills and Westwood/Bel-Air in Los Angeles. Imagine those areas with 9-10% vacancy rates. That would be very distressing.
Tiny Lake Angelus, with 132 households in north Oakland County, is historically a pocket of the county's wealth. Always private, the census takers also found that 13.2 percent of the residences were unoccupied. Vacancies in Farmington Hills were 6.8 percent, up from 3.3 percent in 2000.
The first one--eep! This enclave of Richistan is not doing well at all! The second shows that things are bad, but that areas that are more solidly middle-class instead of rich, people are staying in their homes if they can.
"One of the striking things is that the foreclosure crisis has hit parts of Oakland County that we would have thought are untouchable," said Andy Meisner, Oakland County treasurer.
This is one of the signs that things are not business as usual (BAU), nor are they going to be for the foreseeable future. Too bad. In a BAU climate, I'd be very optimistic about an economic recovery around here. There's nothing a lot of energy for economic activity wouldn't fix. But this isn't BAU, so I'm not very optimistic about BAU solutions.

Back to the article.
Vacancy is a distress signal and communities try to hide the red flags of emptiness. Owners — even banks — maintain the lawns and exteriors, and when they don't, neighbors call the city.

"Even our blight is better," quipped Annabel Cohen, a Bloomfield Township homeowner who hasn't noticed any deterioration.
Snerk You wish. Also, let's see how long that lasts.
Others aren't as chipper, saying that as the crisis goes on, homeowners are more likely to be as distressed as their unsold properties.
Lots more at the link in the headline. I will passon on one bit of advice from the article before moving on--watch the lawns this summer to see which houses are really occupied, and which are just being kept up to look that way by the bank. Also, keep in mind that those figures are from a year ago. Things could be worse by now. Or, they could be better.

The Detroit Free Press has more articles about the real estate situation here in Metro Detoit. I'll give the good, the bad, and the ugly. First the bad.

Metro Detroit home sales dip 7% in March
10:05 AM, Apr. 11, 2011
Metro Detroit home sales sank by 7% in March with only Macomb County showing positive traction in a continually weak housing market.
Macomb County had 912 sales last month, up 6.4% from 857 a year ago. Livingston County sales were down to 198, a 10.4% drop from 221; Oakland County sales were 1,416, a 6.5% drop from 1,515; and Wayne County sales were at 1,868, or 12.5% down from 2,134 in March 2010.
Now the good hidden in the bad.
Metro Detroit's home prices sink
Apr. 12, 2011
Median home sale prices were down 13.3% in metro Detroit to $58,000 last month, compared with $66,900 in March 2010. Prices were down in all counties, but sales prices in the city of Detroit rose by 10%, to a median of $8,505 from $7,725.
Prices are also down, but note the price rise in Detroit proper. That's an early sign of a possible recovery, even if it's starting at a very low level. In a BAU environment, I'd say that the local market is very close to a bottom. The BAU people agree.
Kathy Coon, broker/owner of Real Living Great Lakes in Rochester Hills, said that prices are coming up despite the March readings.

"Once the appraisers see what is going on in the market, the prices will start coming back up," she said. "The good houses right now are selling really quickly, those that are priced right and in good condition. We are seeing the good foreclosures selling really quickly with multiple offers."

Inventory of homes on the market has fallen by 17% in the last year, with 23,630 houses for sale in metro Detroit in March, compared with 28,486 a year ago.

Karen Kage, CEO of Realcomp, said that inventory levels are low now. Of the 32,317 homes on the market throughout southeast Michigan and the Thumb areas covered by Realcomp, fewer than 5,000 are foreclosures.
Speaking of foreclosures, here's the ugly.

Foreclosures rise during March in Michigan
Apr. 14, 2011
In Michigan, foreclosure filings rose in March by 4.37% from February and fell 17.4% from March 2010. The state ranked fifth for its foreclosure rate of one filing for every 311 households last month. Total filings for March in Michigan were at 14,615.
The bad news is that foreclosures are up from the month before. The good news is that they are down year-over-year. As I wrote above, in a BAU environment, this would be very good news. These are not normal times, so don't assume BAU will continue to apply, as much as we'd like it to.

I have more Census news to bring you, but I'll save that for a future post.


  1. Great Post...I'm a 25 year old single female and I just paid cash for a home in west Detroit bordering Dearborn Heights...$9,200...Its in one of the nicer neighborhoods in the city, however, I there are about 4 vacant homes on my block alone...they are in great condition but they are vacant...that worries me although I'm pretty sure someone will scoop them up....hopefully no investors because generally speaking, in the city, renters don't take very good care of their properties.

  2. Hi, Kisha, and welcome to Crazy Eddie's Motie News! I see that you're following the blog, so stick around and keep commenting, especially if you make insightful comments like the one you just left. I appreciate having more ground-level views of real estate and other economic and environmental realities here in metro Detroit.

    Speaking of which, did you read my follow-up to this post?