11.2 percent decline in Metro Detroit is third worst among 20 largest U.S. cities, report says.
Thursday, December 27, 2007
Nathan Hurst / The Detroit News
Metro Detroit home prices fell hard in October, down 11.2 percent compared with the same month last year, according to a report released Wednesday.
The Standard & Poor's/Case-Shiller Home Price Index, which tracks short- and long-term changes in home prices for the nation's 20 largest metropolitan areas, pegged the Detroit area as having the third worst October price declines in the nation, falling behind the boom-and-bust towns of Miami, which saw a 12.4 percent drop, and Tampa, Fla., with an 11.8 percent decline.
Las Vegas, Phoenix and San Diego were the only other cities included in the report to post double-digit declines in October over the same month in 2006. Only the Charlotte, N.C.; Portland, Ore.; and Seattle areas saw price increases, according to the report.
Atlanta and Dallas, once two of the nation's hottest housing markets, saw cooling for the first time in the S&P/Case-Shiller report, with one-year decreases of 0.7 percent in Atlanta and 0.1 percent in Dallas.
While the declines in many cities were attributed mostly to a rapid cooling of an overheated housing market and the recent credit crunch, the problems in Metro Detroit have been exacerbated by Michigan's high 7.4 percent unemployment rate -- the worst in the nation -- and troubles in the domestic auto sector.
The price dip has also been accelerated by a high number of foreclosure auctions and sales by banks that have seized properties from owners who have defaulted on mortgages.
Typically, those homes sell for much less than their counterparts.
The effect on Michigan homeowners is nothing new.
In August, the region's median home price -- half the homes sold for less, and half sold for more -- fell by nearly 18 percent, from $188,275 in 2006 to $154,919, according to data compiled from Realcomp Inc., Metro Detroit's largest multiple listing service.
Karen Kage, chief executive officer of Realcomp, said earlier this month that foreclosure sales have had a profound effect on reported average and median home prices.
"These are not normal sales under normal circumstances," she said. "There has been such an unusually high number of foreclosure sales in the past year that have affected that number."
Metro Detroit's high rate of foreclosure has been among the nation's worst.
In November, one in every 391 Michiganian households faced a foreclosure filing, the sixth highest rate in the nation, according to RealtyTrac, an Irvine, Calif.-based company that tracks such data.
The unusually high rate of foreclosure has helped bring down the average Metro Detroit home price by nearly 14.8 percent since December 2005, the region's all-time peak for prices, according to the Case-Shiller report.
The glut in homes on the market has meant tempered forecasts for 2008. Lawrence Yun, chief economist for the National Association of Realtors, predicted home sales would be up to 5.7 million in 2008, up slightly from an estimated 5.67 million this year. But that prediction comes as the National Association of Home Builders has predicted that short-term demand for new homes will likely be at its lowest since 1985.
Thursday, December 27, 2007
Nathan Hurst / The Detroit News
Metro Detroit home prices fell hard in October, down 11.2 percent compared with the same month last year, according to a report released Wednesday.
The Standard & Poor's/Case-Shiller Home Price Index, which tracks short- and long-term changes in home prices for the nation's 20 largest metropolitan areas, pegged the Detroit area as having the third worst October price declines in the nation, falling behind the boom-and-bust towns of Miami, which saw a 12.4 percent drop, and Tampa, Fla., with an 11.8 percent decline.
Las Vegas, Phoenix and San Diego were the only other cities included in the report to post double-digit declines in October over the same month in 2006. Only the Charlotte, N.C.; Portland, Ore.; and Seattle areas saw price increases, according to the report.
Atlanta and Dallas, once two of the nation's hottest housing markets, saw cooling for the first time in the S&P/Case-Shiller report, with one-year decreases of 0.7 percent in Atlanta and 0.1 percent in Dallas.
While the declines in many cities were attributed mostly to a rapid cooling of an overheated housing market and the recent credit crunch, the problems in Metro Detroit have been exacerbated by Michigan's high 7.4 percent unemployment rate -- the worst in the nation -- and troubles in the domestic auto sector.
The price dip has also been accelerated by a high number of foreclosure auctions and sales by banks that have seized properties from owners who have defaulted on mortgages.
Typically, those homes sell for much less than their counterparts.
The effect on Michigan homeowners is nothing new.
In August, the region's median home price -- half the homes sold for less, and half sold for more -- fell by nearly 18 percent, from $188,275 in 2006 to $154,919, according to data compiled from Realcomp Inc., Metro Detroit's largest multiple listing service.
Karen Kage, chief executive officer of Realcomp, said earlier this month that foreclosure sales have had a profound effect on reported average and median home prices.
"These are not normal sales under normal circumstances," she said. "There has been such an unusually high number of foreclosure sales in the past year that have affected that number."
Metro Detroit's high rate of foreclosure has been among the nation's worst.
In November, one in every 391 Michiganian households faced a foreclosure filing, the sixth highest rate in the nation, according to RealtyTrac, an Irvine, Calif.-based company that tracks such data.
The unusually high rate of foreclosure has helped bring down the average Metro Detroit home price by nearly 14.8 percent since December 2005, the region's all-time peak for prices, according to the Case-Shiller report.
The glut in homes on the market has meant tempered forecasts for 2008. Lawrence Yun, chief economist for the National Association of Realtors, predicted home sales would be up to 5.7 million in 2008, up slightly from an estimated 5.67 million this year. But that prediction comes as the National Association of Home Builders has predicted that short-term demand for new homes will likely be at its lowest since 1985.
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