The high number of Detroit foreclosed homes contributed to the decrease in the nationwide average house sales price in the second quarter, as surveyed by the Federal Housing Finance Agency.
FHFA explained that if home price declines in Detroit and in 3 other metro areas, namely Las Vegas, Phoenix and Orlando, were not considered in the survey, the nationwide average house sales price actually climbed up by 2.4 percent in the quarter ended June. As these 4 cities were included in the study, the nationwide average house price fell by 1 percent from the average price in the quarter ended June 2008.
According to FHFA, most house sales in the 4 cities consisted of foreclosure sales and short sales. Out of the 32 biggest metropolitan areas studied by FHFA, Detroit had the lowest average house sales price in the April to June quarter, with the price falling from $189,000 in the second quarter last year to only $158,400 in the quarter ended June this year.
In a survey of foreclosure filings in the 203 largest metro areas of the U.S. by a real estate research firm, the city of Detroit, including nearby Warren and Livonia, posted more than 35,300 default notices and foreclosure sale notices in the first half of this year. With a foreclosure rate of one out of every 54 housing units or 1.86 percent of all households, Detroit is 38th in the 203-metro-area chart.
In charts of city foreclosures in 2006 and in 2007, the high number of Detroit foreclosed homes put the city on top, as the big automobile corporations and other manufacturing companies laid off workers. But as the pace of job dismissals slowed slightly, foreclosure filings also slowed by 8 percent from the previous 6 months and by 16 percent from the first 6 months of 2008.
In a report on metropolitan area employment and unemployment in July released by the U.S. Bureau of Labor Statistics on September 1, Detroit figured on top of jobless rates.
Out of 372 metro areas, the Detroit area had the biggest increase in unemployment rate compared to July last year, with an increase of 8.4 percentage points. Its July jobless rate was 17.7 percent.
Among 49 metro areas with a population of 1 million or more based on the Census 2000, the Detroit area also posted the highest jobless rate in July. With a lot of homeowners losing their jobs, the number of Detroit foreclosed homes continued to rise, pushing down home prices further.
back to top
Comments on this entry are closed.