11-29-07What the the housing market holds for Detroit, Michigan Metro area for the end of 2007. This article republished by Art Daniels and Mark Maupin from the Detroit News sums up the facts:
Metro area home prices down 9.6%
Detroit region's third-quarter decline is third largest among 20 U.S. metro areas.
Detroit News staff and wire reports
DETROIT -- Home prices throughout Metro Detroit fell an average 9.6 percent in the third quarter over the same period last year, according to data released Tuesday.
Nationally, prices fell an average 4.5 percent year-over-year, according to the Standard & Poor's/Case-Schiller housing price index. That's the most significant drop since S&P began the index in 1987, and yet another indication that the nation's housing market is continuing to buckle under economic pressures and credit market troubles.
Metro Detroit had the third largest home-price decline among the 20 metro areas included in the index. This region was tied with San Diego and trailed Tampa and Miami.
According to one of the index's creators, there's a significant chance of a recession as a result of the falling housing prices, subsequent foreclosures and turmoil in the financial markets.
"Over 50 percent," said MacroMarkets LLC Chief Economist Robert Shiller, giving his odds for a recession. Other economists have put the chance of recession at one in three.
"We're in the aftermath of the biggest housing boom in history, so how do we use historical data to judge the outcome?" he said. "We're out of the range of the normal variation in the data and I take that as very significant."
For Metro Detroit homeowners, the reality is likely worse than the S&P/Case-Schiller index indicates.
The Detroit News reported in September that prices on residential properties in Metro Detroit had fallen an average of 18 percent from August 2006 to August 2007, based on data released by Realcomp, the Farmington Hills-based multiple listing service for the region. Realcomp compiles data from nearly every real estate transaction in Metro Detroit -- including foreclosures.
In contrast, the S&P/Case-Shiller quarterly index uses estimates from communities throughout the region, and does not take into account the full impact that foreclosure sales have on bringing down home values.
Don Grimes, an economic researcher at the University of Michigan, said homeowners here have been hit particularly hard, but it could be worse.
Metro area home prices down 9.6%
Detroit region's third-quarter decline is third largest among 20 U.S. metro areas.
Detroit News staff and wire reports
DETROIT -- Home prices throughout Metro Detroit fell an average 9.6 percent in the third quarter over the same period last year, according to data released Tuesday.
Nationally, prices fell an average 4.5 percent year-over-year, according to the Standard & Poor's/Case-Schiller housing price index. That's the most significant drop since S&P began the index in 1987, and yet another indication that the nation's housing market is continuing to buckle under economic pressures and credit market troubles.
Metro Detroit had the third largest home-price decline among the 20 metro areas included in the index. This region was tied with San Diego and trailed Tampa and Miami.
According to one of the index's creators, there's a significant chance of a recession as a result of the falling housing prices, subsequent foreclosures and turmoil in the financial markets.
"Over 50 percent," said MacroMarkets LLC Chief Economist Robert Shiller, giving his odds for a recession. Other economists have put the chance of recession at one in three.
"We're in the aftermath of the biggest housing boom in history, so how do we use historical data to judge the outcome?" he said. "We're out of the range of the normal variation in the data and I take that as very significant."
For Metro Detroit homeowners, the reality is likely worse than the S&P/Case-Schiller index indicates.
The Detroit News reported in September that prices on residential properties in Metro Detroit had fallen an average of 18 percent from August 2006 to August 2007, based on data released by Realcomp, the Farmington Hills-based multiple listing service for the region. Realcomp compiles data from nearly every real estate transaction in Metro Detroit -- including foreclosures.
In contrast, the S&P/Case-Shiller quarterly index uses estimates from communities throughout the region, and does not take into account the full impact that foreclosure sales have on bringing down home values.
Don Grimes, an economic researcher at the University of Michigan, said homeowners here have been hit particularly hard, but it could be worse.
posted by Ralph Marcus (Mark) Maupin | 6:01 PM
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