Metro Detroit takes lead on U.S. population loss rankings

By PAUL J. WEBER • Associated Press • March 27, 2008

Detroit lost more than three times as many people as any other metro area in 2006 and 2007, according to Census Bureau estimates to be released today.

Its population declined more than 27,300. Other areas losing more than 5,000 people were Pittsburgh, Cleveland, Columbus, Ga., Youngstown, Ohio, and Buffalo, N.Y.

Four Texas metropolitan areas were among the biggest population gainers as Americans continued their trend of moving to the Sun Belt.

Dallas-Fort Worth added more than 162,000 residents between July 2006 and July 2007, more than any other metro area. Three other Texas areas — Houston, Austin and San Antonio — also cracked the top 10.

Atlanta saw the second-largest population jump with just over 151,000 new residents. Phoenix was third with more than 132,000, and was followed by Houston, Riverside, Calif., Charlotte, N.C., Chicago, Austin, Las Vegas and San Antonio.

Of the 50 fastest-growing metro areas, 27 were in the South and 20 were in the West. Two were in the Midwest, one — Fayetteville, Ark. — straddles the South and Midwest and none was in the Northeast.

Experts credit much of the growth in the South to relatively strong local economies and housing prices that are among the most affordable in the U.S.

“People are running away from unaffordable housing, from the economic slowdown,” said Karl Eschbach, a state demographer in Texas. “I would expect Texas to stay at the top of a slowing game.”

According to figures compiled by Eschbach, 16% of Americans who moved to other states between July 2006 and July 2007 came to Texas, which led the nation for the second straight year in that category.

Home prices continue to be a big factor. A report earlier this month by Global Insight found that housing prices in the Dallas area were undervalued by as much as 30%.

Ann Sekesan, a pharmacy technician, moved her family from Pennsylvania to suburban Fort Worth last June after seeing spacious homes in Texas for under $200,000 on a television show.

“After we saw that on TV, my husband and I looked at each other and said, ’Have you ever been to Texas?” Sekesan said. “It’s amazing the size of a home you can get down here. It’s just incredible.”

Among other Census Bureau findings:

• On a percentage basis, the Palm Coast, Fla., area was the fastest-growing in the nation. Population there jumped by 7.2% to more than 536,000. The next areas experiencing the biggest surge in growth were St. George, Utah; Raleigh, N.C; Gainesville, Ga.; and Austin.

• The New Orleans area, recovering from Hurricane Katrina, grew by 4% or nearly 40,000 people, putting it 16th in terms of raw numbers but eighth for percentage growth. During the same survey last year, the population of New Orleans dropped by nearly 290,000 people.

Up north dream homes a nightmare to unload

Saturday, March 22, 2008

As economy slumps, second homes lose value as they sit unsold for months

Joel J. Smith / Special to the Detroit News

When Paul Bucci hung the "For Sale" sign on his Higgins Lake vacation home, he never dreamed he'd still be looking for a buyer 16 months later.

But in all that time Bucci, who built the house six years ago, has received only a single offer of $99,000.

That's $30,000 less than he had in mind for the three-bedroom chalet near a golf course.

"This isn't a shack. This is a beautiful year-round home," said the frustrated Bucci, a Chrysler worker from Grosse Pointe Farms. "I'm keeping the 'For Sale' sign up. I'll just sit on it if I have to. But I'm not giving it away."

Bucci, like thousands of other property owners, is learning the hard way that the fallout from a troubled economy has rippled out to the lakes, rivers and swimming pools of Michigan's venerable northern vacation home market.

Many homeowners are stuck paying the mortgage on an up north cottage they can't unload because other families, who might once have ventured into the vacation-home market, are cutting back in light of job-security fears, stricter lending standards, the high cost of gasoline burned on weekend drives north or other economic concerns.

Unfortunately for sellers, this "buyers" market has come when many second-home owners are facing layoffs, lost overtime, cuts in pay or simply want to move out of Michigan and seek work elsewhere.

They are desperate for the money they have tied up in their vacation property but can't get their hands on it -- at least not very quickly.

"There are a lot more homes for sale and they are on the market for a longer period of time," said Rick Stein, co-owner of RE/MAX Bayshore Properties in Traverse City. "In some cases the market time has doubled or tripled in just a year or two.

"There is a price that every property will sell for. It's just a matter of if you're willing to accept that price and how long you'll wait to get it."

For many, it'll be a long wait.

For example, there are 3,568 properties listed for sale with real estate agents in the Traverse City area.

Not all are cottages, of course, but competition for buyers will jump dramatically in four to six weeks as the summer selling season approaches.

"Part of the problem we're seeing is there is no sense of urgency on the part of the buyers," said Stein, who has been a real estate agent for 30 years.

"Buyers are looking, looking and looking. Everybody is waiting for the bottom of the market whenever that comes. They all want a deal."

Selling first home instead

Joyce Adams-Pranion of Grosse Pointe Park has become so frustrated with trying to sell her two-bedroom log cabin on Saddleback Lake in Oscoda County that she has torn down the real estate sign and listed her downstate residence for sale instead.

She said that if she and her husband, Doug, who is disabled, can sell their Metro Detroit home, they will move up north, where the cost of living is cheaper.

"I've had that property listed for three years," Adams-Pranion said. "People wanted to give me half of what I paid. We've cut the price from $129,000 to $104,000. But buyers are so ridiculous they want us to give it away for free."

Jeffrey Mansell built a house near Sugar Loaf ski resort in the mitten's northwest corner. He built it to sell it for profit, but his dream never materialized. For two years, as the house sits empty, Mansell has been paying $1,100 a month on that $175,000 loan, and better than $250 a month more in property taxes and maintenance costs.

"I haven't got a single offer on the property," said Mansell, a highway light engineer from Salem Township. "Right now, I'm just stuck with it. I hope with mortgage rates dropping, I'll be able to sell it. I never dreamed it would take this long."

Shoppers are savvier

Northern Michigan real estate agents say they are selling about the same number of homes as in the past, but for lower prices and after a lot more time and effort.

Daniella M. Bell is a member of the $4 million club for 2007 as an associate broker with Coldwell Banker Schmidt Realtors in Cadillac.

She said the high inventory has made it a buyers' market and buyers today are more savvy and educated than before.

"Buyers won't buy property unless they think they are getting a good deal," Bell said. "The sellers are beginning to see that they have to be more realistic in their pricing if they are going to sell their property. If a home has been on the market for some time, generally it's because it's priced too high."

She said northern Michigan long has been southeast Michigan's prime target area for vacation homes, second homes and retirement living. But Bell said that with financing tight, people who are interested in moving north to live or retire are dependent on selling their Metro Detroit property first.

"That just isn't easy to do these days," she said.

At Michaywe, a 900-unit development with a golf course in Gaylord, 65 properties are for sale. Real estate agents expect that number to climb to about 100 as the summer approaches.

"I know people who have two homes for sale -- one here and one downstate," said Fred Smith, the Coldwell Banker agent at Michaywe. "Whichever one sells first, they will move into the other one. It's tough selling a home today.

"There is nothing written in stone that thou shall make money on real estate. People have to bite the bullet sometimes and take the loss."

Bargains to be had at 2 metro home auctions

790 foreclosed Michigan properties on the block

BY GRETA GUEST • FREE PRESS BUSINESS WRITER • March 23, 2008

Residential real estate buyers will have two chances to get deals hundreds of properties at auction.

The first auction starts Tuesday and runs through Sunday. Up for auction are 790 foreclosed Michigan properties. Nearly 700 are in metro Detroit and are valued from $2,000 to $500,000 and come with title insurance. The rest are in other Michigan cities such as Jackson and Kalamazoo.

"Bank-owned foreclosure auctions are a great way for buyers to find exceptional values on homes because lenders are anxious to unload loans costing them money," said Dave Webb, principal of Hudson & Marshall, auctioneers for the property.

Metro Detroit had the highest rate of foreclosure in 2007 among the 100 largest cities, according to RealtyTrac Inc.

The auction will take place Tuesday and Wednesday at 1 p.m. at the Doubletree Hotel in Dearborn. On Thursday, there are two auctions at 1 p.m. and 7:30 p.m., also at the Doubletree. On Saturday and Sunday, the auction starts at 1 p.m. and moves to the Ford Motor Co. Conference & Event Center in Dearborn.

All homes are sold as-is and potential buyers can attend open houses today from 1 to 3 p.m. The properties are listed at www.hudsonandmarshall.comv or buyers can call 866-539-4172 for more information.

Winning bidders need to make a cash deposit of $2,500 or 5%, whichever is greater, on the day of the auction. Usually, the properties close within 30 days.

Webb said Hudson & Marshall has been conducting real estate auctions in Detroit since 1999. Back then, they would auction around 100 properties. That number has grown sevenfold.

"The best stuff will sell Saturday and Sunday," Webb said. "During the week, we put our really low-dollar investor stuff out. Thursday night at 7:30 will have some of the better stuff."

The listings include homes in Detroit, Novi, Bingham Farms, Ferndale, Plymouth, Bloomfield Hills, Dearborn, Oak Park and other cities.

Another auction focuses on the other end of the market -- new homes and home sites. NRC Realty Advisors in Rochester plans to auction them on April 19. They include 16 new builder homes and condominiums and 273 build-ready lots in seven subdivisions.

The properties were developed by Fritz Builders of Romeo and Michael Moceri of Novi. They are in Almont, Armada, Hartland, Lapeer, Metamora, Northville, Romeo and St. Clair.

Suggested opening bids for the homes that were originally from $250,000 to $2.5 million is $60,000. The $2.5-million price tag came on a 5,700-square-foot luxury log cabin in Northville that is part of the auction.

"In distressed real estate markets such as Detroit, buyers have been able to pick up tremendous bargains when they buy at a real estate auction," said Laurie Tarver, NRC senior vice president.

To view the properties, go to www.nrc.com/806 or call 800-747-3342, ext. 806. The houses and condominiums will be open for viewings on April 4, 5, 12 and 13.

The auction is at the Royal Park Hotel, 600 E. University Drive, Rochester.

Taxes rise, home values fall, owners say, 'Huh?'

Proposal A to blame; many seek help from review boards

BY CECIL ANGEL • FREE PRESS STAFF WRITER • March 14, 2008

All across the tri-county area, there's a different kind of March madness going on that doesn't involve basketball.

Property owners such as 80-year-old Eloise Carswell of Southfield are dissatisfied with their annual property tax assessments and are flocking to their local review boards seeking reductions. A lower property assessment generally means lower taxes.

Carswell said it would be hard to sell her three-bedroom, 2,136-square-foot house with the kind of taxes she has to pay. "This is not pennies," she told the board of her $6,000 yearly tax bill.

With the state recession and rampant foreclosures, disgruntled property owners basically want to know one thing:

"How can my taxes be going up when my property value is going down?" said Westland City Assessor James H. Elrod.

The answer is in Proposal A, the state law passed in 1994 that limits the increase in property taxes to the rate of inflation. So while selling prices soared in the 1990s, taxable values rose much slower. But now the taxable values can continue rising with inflation -- between 2% and 3% -- even though assessed values are now falling.

In Wayne County, projected property assessments in 2008 have dropped about 5%, and in Macomb, they've dropped 7%. Oakland expects a drop of about 0.4%.

State law requires that tax review boards meet in March and field complaints. Property owners are especially frustrated in light of the state's economic recession and the foreclosure crisis that have caused the market value of homes to drop.

How it's all determined

What may seem straightforward to property owners is actually not so simple.

Cities and townships perform mass appraisals comparing sales of comparable homes in the same neighborhood. Elrod said that drops in property values can vary depending on the neighborhood.

In Westland, there was a 7% drop in property values overall. In some neighborhoods, assessed values went up, but in others, values decreased by as much as 22%, according to city records.

How does a homeowner know when to appeal the assessment? He or she should look at the taxable value for 2008 on the assessment notices, Wayne County Assessor Gary Evanko said.

"If twice that number is more than what you think you can sell your house for, go see the Board of Review," Evanko said.

In Oakland, '$80 is $80'

Oakland County may be one the richest county in the state but it, too, has seen property values decline.

Farmington Hills City Assessor Dean Babb said his office fielded about 50 calls from people complaining about their taxes going up, but their assessments going down.

"If people are coming to question that and want to know why, everyone's going to be sympathetic, but the board can't control the calculation of the taxable value. That's mandated in the law."

Still, Claudia and Bradley Trudeau went to Farmington Hill's City Hall on Wednesday with that common quandry:

While their appraised and taxable value of their two-bedroom, two-bath condominium on Orchard Lake Road fell, their property taxes increased.

Claudia, a 51-year-old occupational therapist, and her husband, a 62-year-old retired letter carrier, said it didn't add up.

They pointed out their neighbors were slashing prices of for-sale condos from about $200,000 to the mid- and low $160,000s.

And yet the Trudeaus' property taxes were going up about $80, they told the Board of Review. That might not seem like a big hike, Claudia Trudeau said. "But," she added, "$80 is $80."

Farmington Hills tax assessor Dean Babb explained there was nothing he could do. He already reduced the couple's assessed value to $97,740 down from $104,060 the year before, he said. And it was state law, not the city, that controlled the taxable value of the home, he said sympathetically. Assessments fell in Farmington Hills about 5.68%.

Board of Review Chairwoman Dorothy Jeffres added: "What he's saying is you have to pay your taxes. And we'll see you next year."

Sales help make case for change

There were hints something was wrong with Eileen McDonell's property tax assessment.

For one, her bank notified her in 2004 that her escrow account was short. But it wasn't until earlier this month when she was chatting about taxes with her daughter-in-law Brigid McDonell -- who also lives in a townhouse condominium on Ravencrest near Newburgh Road in Westland -- that it all came together.

"When it went up, I never even realized it," said Eileen McDonell, 90. "I didn't know what other people were paying."

Somehow, the tax cap on her home established under Proposal A had been lifted, and her taxes shot up, the women surmised. McDonell's combined summer and winter 2007 taxes were $3,564.81.

McDonell, a widow, purchased her 1,190-square-foot, two-bedroom townhouse with her daughter Patricia Evans in 1999 for $159,000.

Evans died in 2004, and her children inherited her share of the home. They signed a quitclaim deed making it seem as though Eileen McDonell had just bought the home.

"We believe that's what triggered it," said daughter-in-law Brigid McDonell, 66.

The drop in value is what led the women to Westland City Hall on Wednesday to explain how condo prices in their development had fallen, making a case for lower taxes.

Eileen McDonell mostly observed as her daughter-in-law peeled off copies of sales over the past year. She showed the Westland Board of Review printouts of a condo that sold for $174,900 in October 2006 and sold again for $152,900 on Feb. 1.

She later explained to the board her theory as to why her mother-in-law's assessment increased.

Board member Tracey Sabotchick said the board would not be making any decisions Wednesday because it investigates each case. Eileen McDonell can expect to hear from the board by June 1, she said.

Oakland increase tied to addition

When Jeff Fendelet and Heather Kaminski bought their home in Commerce Township in 2005, their taxes were about $1,900 a year. Now, they pay about $2,700 a year.

After their tax assessment this year showed their home's value at nearly $170,000 -- about $15,000 more than it was appraised for in 2005, when they purchased the home -- they decided to appeal.

The couple, who are engaged, explained to the board that they bought their home for $152,000, about $3,000 less than its market value. They said a real estate agent told them last month that the house couldn't fetch more than $160,000.

But their assessment shows the home valued at more than $175,000. The couple is being taxed on the home's assessed value -- which is actually $87,970, half of the property's estimated market value.

"Our house is not valued at that," Kaminski, 31, told the board.

The board said that a small addition the couple made to the house may have increased its worth. Board member Barbara McNutt explained that the assessment might seem high in a market where home values are declining because the assessments were based on home sales between Oct. 1, 2006, and Sept. 30, 2007.

The couple will have to wait a few weeks to find out what the board decides.

Fendelet and Kaminski said they disagree that the 10-by-10-foot addition raised their home's value so much. Now they say they may not build the addition above their garage as they had planned.

Taxed out of Michigan?

In Macomb County, a similar song is being sung.

Joshua Vance thought he'd take advantage of the housing crunch by buying a foreclosed home for $135,000 and fixing it up so he could raise his two young children in a nice neighborhood in Clinton Township.

Three years later, Vance is thinking of moving -- not just out of his 2,400-square-foot house, but out of Michigan.

His frustrations grew when he opened his tax bill to discover that the assessor pegged the value of his house at $260,000.

While the estimated value was about $10,000 less than it was last year, Vance said the township didn't reduce the value enough in response to the continuing decline of the state's economy. A licensed real estate agent, Vance estimates his house is worth no more than $220,000.

"It's extremely elevated," Vance told the Clinton Township Board of Review this week, in hopes of getting his taxes reduced. "I think it's optimistic, especially considering the current economic situation."

Now he has a tough decision to make -- stay or move.

"I want to stay loyal to my state, but I have a family to raise," Vance said.

Changing economic times

In good economic times, Theodore Whittlesey could better understand why an assessor would raise the value of his two New Baltimore industrial lots beyond what he paid for them in January.

But with all of the "For Sale" signs he sees throughout southeast Michigan, Whittlesey said property values estimated by municipalities should drop.

Whittlesey bought the two lots for about $330,000 apiece in hopes of finding a buyer. Then, he opened his tax bill and found out that New Baltimore estimated that each property was worth about $30,000 more than what he paid.

"It's worse out there than people think," Whittlesey said. "It's turning out that you can't sell a house for as much as the assessed value. You really can't."

When Whittlesey made his case to the Board of Review, imploring the assessor to reconsider the assessment, he got an optimistic reaction.

"The assessor needs to look at this," member Charlene McEachin told Whittlesey. "If there is an error, we will fix it."

This year's assessments hit Whittlesey's wallet in another way. The assessor increased the value of his rental storage units in New Baltimore by $60,000, to nearly $500,000.

He said the units are worth $400,000, especially since he can't find anyone to rent about a third of them.

"Things aren't going well right now," Whittlesey said. "That should be reflected in the assessed value."

Michigan 6th in nation for foreclosures

BY GRETA GUEST • FREE PRESS BUSINESS WRITER • March 13, 2008

Michigan ranked sixth nationwide for foreclosure filings in February, according to figures from RealtyTrac Inc.

The Irvine, Calif.-based Web site reported that Michigan foreclosures were up 1.96% from January and up 17.84% from February 2007.

Michigan ranked in the top 10 nationally for its foreclosure rate of one foreclosure for every 409 households and for the number of filings at 10,957 in February. The national rate was one foreclosure for every 557 households.

RealtyTrac figures include filings in all three phases -- notice of default, notice of sale and bank repossessions.

Michigan's breakdown includes 1,163 notice of default filings, 6,798 notices of sale and 2,996 bank repossessions for the month.

Overall foreclosures nationally fell 4% in February to 223,651 compared with January. Although the trend shows improvement, foreclosures are still up 60% when compared with February 2007.

Said James J. Saccacio, CEO of RealtyTrac, "The year-over-year increase of 60% this February was significantly higher than the 19% year-over-year increase from February 2006 to February 2007, indicating we have still not reached the peak of foreclosure activity in this cycle."

Nevada, California and Florida held the top three spots nationally for their foreclosure rates.

Bargains drive up sales of homes

Uptick from weak '07 sales signals Metro housing market may be rebounding, but prices are lagging.

Nathan Hurst / The Detroit News
March 12, 2008

DETROIT -- After more than three years of declines in home sales, prices and new construction, Metro Detroit could be taking a step toward a housing recovery.

For the third month in a row, sales of single-family houses and condominiums in the four-county region have increased over the same month a year ago.

In the February data released Tuesday, sales were up 13.8 percent over February 2007, according to Realcomp, the Farmington Hills-based multiple listing service. In December sales were up 7.3 percent from the same month a year earlier, and in January they were 15.2 percent.

In contrast, Metro Detroit home sales for all of 2007 were off 14.4 percent from their peak in 2004.

Market experts said the three-month uptick in sales could be a sign that Metro Detroit's long, slow journey to a housing market recovery has begun. Since 2005, home prices have dropped, foreclosures have soared and new construction has sunk to its lowest level in 40 years.

The sales boost is a shot in the arm the region needs, said Don Grimes, a senior research specialist with the University of Michigan in Ann Arbor. "Otherwise, it'll just keep dragging on and on."

But the experts caution that the next steps -- rebounds in home prices and new construction -- won't happen for quite some time.

The sales mostly are being driven by bargain-basement prices, especially for houses in foreclosure, which are bringing buyers back into the market.

Real estate agents have noticed that more homeowners who have had their houses on the market for a long time are pricing those homes to sell, so they can buy a new house at a bargain price, too.

Median sale prices in February demonstrate the effect of foreclosure sales on the local market.

In Detroit, for example, February sales were up 49.4 percent from a year ago, but nearly 58 percent of the sales involved foreclosed homes, with a median sales price of $10,000. In contrast, the median price of foreclosed homes in February 2007 was $27,000.

In Oakland County, foreclosure sales made up nearly 35 percent of transactions in February, with a median price of $91,395, compared with $123,000 last year. The median price of non-foreclosure sales for the month was $176,500, compared with $191,000 a year ago.

Prices likely won't rise soon

Metro Detroit homeowners shouldn't expect significant price gains any time soon, said Dana Johnson, chief economist for Dallas-based Comerica Bank.

"The latest data on house prices still show a pretty ugly decline in the Metro Detroit area," Johnson said. He's predicting prices won't start rebounding until the end of the year, at the earliest.

While that might be disappointing for home sellers, it's not a bad thing for the market as a whole, Johnson said. Recovery in the housing sector will be driven largely by price declines, which will eventually draw buyers into the market.

As home sales rise, inventories will drop, making those homes remaining on the market more in demand, experts say. Only after that demand has been realized will new construction numbers start to pick up, as well.

Until that happens, real estate agents said the lower prices are keeping them busy, with more value-conscious buyers looking at properties.

"There is a tremendous amount of perceived value," said Nanci J. Rands, a broker with SKBK Sotheby's International Realty in Birmingham. "A lot of people have been on the sidelines waiting for that one perfect property that they just couldn't resist at a price that was attractive.

"We have seen many more people calling for appointments now than even a month ago, more than we could explain with the usual spring turnout," Rands said. "There are a lot of properties available at quite attractive prices."

February home sales leap 12.8%

Low prices draw buyers, exec says

BY GRETA GUEST • FREE PRESS BUSINESS WRITER • March 12, 2008

Sales of homes and condos in metro Detroit rose 12.8% in February compared with a year ago, according to figures released Tuesday by Realcomp.

There were 3,591 home and condo sales in the metro area in February compared with 3,184 in the same month in 2007. Realcomp figures are tallied from listing agents' reports of closed sales.

Karen Kage, president of Realcomp, a Farmington Hills-based real estate listing service, said the reason for the rise is that many of last year's foreclosures -- stemming from the sharp decline in the housing industry that began in August 2005 -- are being sold and, with prices down as much as 15% in some areas and interest rates stabilizing, buyers are beginning to step forward.

Detroit saw the greatest improvement as 804 homes and condos were sold in the month compared with 538 in February 2007, a 49.4% jump.

While the area is expected to see its high foreclosure trend continue, the February sales figures are a hopeful sign for the market as spring nears, Kage said.

"We started to see things go up in the fourth quarter of last year but nothing like we are seeing now," Kage said. "We are very optimistic that sales will continue to rise.

"If you are a first-time buyer, I have never in my 30 years in the business seen a better time to buy," she said.

Other highlights from the February sales report include:

• Macomb County sales rose 21.7% to 483 from 397.

• Oakland County sales rose 7.54% to 818 from 761.

• Livingston County sales rose 19.5% to 104 from 87.

• St. Clair County sales fell 9.4% to 87 from 96.

• Wayne County sales rose 28.1% to 1,481 from 1,156.