A cold sort of arctic chill has struck Michigan real estate. Record foreclosures have sent most of Michigan into a steep decline as double-digit unemployment cools the housing markets.
Michigan real estate has been in a housing recession for more than a year as more and more residents flee the state for jobs and a better life. It may be many years before Michigan is able to recover from the credit crunch, if ever.
Statewide home sales are slumping and prices are falling in what is amounting to the worst housing down turn since the Great Depression in Michigan. Homes in Detroit are being vacated by home owners, who are unable or unwilling to make higher mortgage payments as adjustable rate mortgages reset.
In Detroit the crisis has gotten so bad that the city's mayor called a special conference of mayors from around the country to come up with solutions to handle homes that have been left to dilapidate and hurt neighborhoods. Home prices are declining as rapidly as they appreciated in the real estate boom.
 |
| City |
Forecast |
| Detroit |
− 16.7% |
| Grand Rapids |
− 8.9% |
| Lansing |
− 6.5% |
| Marquette |
− 7.5% |
Real estate investors and wanna-be investors have traveled to Michigan to snap up foreclosed homes at cheap prices.
Detroit was the height of the auto industry, but the economy has drastically changed with more lay-offs in the industry expected. Detroit has been a vulnerable city depending on the auto industry for jobs in an industry besieged by foreign competition. The lack of American auto maker's ability to meet growing demands for cheaper better made cars has hurt the American auto industry, which should realize more than any other industry that there is growing global competition.
The plight of American auto makers has transferred to Detroit home owners and surrounding communities as job cut backs cause higher unemployment resulting in more foreclosures. Detroit is forecast to see further erosion in its real estate market this year by Housing Predictor and deflate an average of 16.7% in housing values.
In Grand Rapids, which isn’t as dependent on the auto industry and has developed other industry the housing market has also slowed. Grand Rapids had experienced appreciation during the real estate boom, but attractive new creative financing is now catching up with the market place igniting a booming foreclosure market of its own.
Grand Rapids will see weakening home sales produce depreciation forecast at 8.9% for the year.
In Marquette the market is less affected than other parts of the state, but home sales are slowing and are projected to slow further over the year. Marquette will see home values decline a forecast 7.5%.
In Lansing the economy is showing great strides of improvement. A long list of new developments is improving the downtown. Multi-million dollar projects are underway boosting the economy and aiding the Lansing real estate market.
A 12-story condo project is underway downtown along with a stadium district. The Lansing housing market, however, will continue on a slow path throughout the year with forecast deflation as some of the lightest in the state at 6.5%.
