Record Job Losses Driving Detroit Distressed Properties
Record job losses continued to drive Detroit distressed properties, based on studies by the Brookings Institution and real estate firms.

The Brookings report said that the Detroit metro area suffered a total job loss of 15.6 percent over the period from the start of the recession to the final quarter of 2009. Only two metro areas suffered worse than Detroit: New Orleans, which posted a total job loss of 16.4 percent, and the Cape Coral-Fort Myers metro area, which suffered a 17-percent job loss rate.
There were only two metro areas which gained jobs during the recession: the Texas metro areas of McAllen-Mission-Edinburgh and Austin. The McAllen area gained 0.7 percent more jobs and Austin gained 0.4 percent more jobs.
Of the 100 large metro areas surveyed by Brookings, only 21 areas posted job growth rates in the last quarter of 2009. Additionally, almost two-thirds were not showing rates of post-recession job recovery that approach the rates of job recovery after the recessions in the 1980s, 1990s and in 2001.
According to data from the Michigan Department of Energy, Labor and Economic Growth, the Detroit unemployment rate in December decreased to 14.9 percent, down from the November rate of 15.4 percent but far above the December 2009 rate of 10.6 percent.
But some local leaders have been saying that the actual jobless rate was closer to 50 percent, as the official unemployment figures do not include part-time workers looking for better jobs and job seekers who have given up their job hunting efforts.
In February, the number of distressed properties in Detroit continued to surge. Foreclosure postings in Wayne County, which includes Detroit, reached 5,782 filings, a staggering spike of 69 percent from filings 12 months before. Detroit, which functions as the administrative city of Wayne County, was among the largest cities in the U.S. and in Michigan before the collapse of the auto industry.
Amid the continued spike in foreclosures in February, local real estate brokers were encouraged when the price median and nondistressed sales improved in metro Detroit.
In Wayne County, the price median rose to $15,157, an increase of more than 26 percent compared to the February 2009 median. Total sales of non-foreclosures also surged to 590 units while foreclosure sales dropped from 1,359 units to 1,057 units.
With these initial improvements in prices, it is hoped that investors and owner-occupants who bought Detroit distressed properties finally see improvements in their prospects for profits.



