Foreclosures Are Easing In Detroit
August 4th, 2008
Detroit has long been under the siege of foreclosures but perhaps the sun is peeping out. From figures and numbers it appears that foreclosures are easing in Detroit. At least that is the forecast of Realcomp that deals in real estate in Detroit and Wayne County. The sale of houses has increased in this region for the fifth running month.
The prices being offered are real bargains. The average price for a foreclosed unit in May was less than $39,000 while that of non-foreclosed ones was $124,500. In Detroit there were 644 sales of foreclosed houses and 395 sales of non-foreclosed units. In May the MLS listings continued to be high at 66,000 but it is a good climb down by 7.44% from the sales of May 2006. From 2006 the year to date sales have increased by 12.7%. The pending sales for May this year has also increased hinting that in June the trend will continue in all probability.
The MLS figures show that foreclosures continue to pull down the market. The prices have been reduced by nearly 69% in Detroit. Houses that had been purchased for $27,000 about a year ago is now being offered for $8,500 for foreclosed units and $8,625 for the non-foreclosed ones. Michigan ranks 5th in USA.
Layoffs have mired the situation in Motown or Detroit. This has been continuing since the oil and gas crisis struck in the 70’s and 80’s. Starting from here it spread like a virus across the country. According to the findings of the Labour Department the unemployment rate has increased during the past year. But there is another side to the picture. Beyond the Big Leave reports that although ageing workers have been laid off, industry is picking up enough so as to attract the younger group, although they will have to settle for lesser pay packets. Once the people have money in their pockets the prospects of buyers will increase – it is hoped. The automobile industry is rearranging itself to manufacture smaller cars and this means 46,000 new workers might be absorbed in Michigan only. It will most probably plug the bleeding.
In Michigan foreclosures have primarily been because of the slump in the car industry. A localized recession had set in that forced people to succumb to foreclosure. Without pay packets it was impossible to keep the foreclosure wolf from the door. Here the subprime issue had not dominated the scene.
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