Posted by: Brian Powers | October 23, 2009

Metro Detroit Foreclosure Rates Rock Some Suburbs Harder Than City

As most of you are aware by now, the foreclosure epidemic in southeast Michigan is not isolated in the city nor the suburbs, it is everywhere.  Whether you realize it or not, chances are you know someone who is going through difficulty in paying their mortgage.  There are plenty of options out there – loan modification, bankruptcy, or a short sale. But which option is best? Every home owners situation is different, so it all depends. If you know someone having difficulty paying their mortgage and is at risk for foreclosure, please have them contact me so we can review their options.

Here is a good read from the Detroit Free Press about the foreclosure problem we have here in southeast Michigan.

Bank Foreclosures by Zip Code

Foreclosures rock some suburbs harder than city

BY GRETA GUEST and KRISTI TANNER
FREE PRESS STAFF WRITERS

While Detroit is known nationally for its high foreclosure rate, the problem is worse in three suburbs.

Hazel Park, Eastpointe and Pontiac all had higher rates than Detroit, according to a Free Press analysis of metro area foreclosures over the past 3 1/2 years.

“The industrial base of Detroit is supported by the areas around it, so therefore it is not just Detroit that is suffering,” said Marshall Mandell, a foreclosure specialist for Re/Max Classic in Farmington Hills.

Among metro area ZIP codes, Detroit’s 48205 had the highest foreclosure rate, at one out of every 5.2 households, according to data compiled by RealtyTrac Inc. of Irvine, Calif.

By city, Hazel Park was highest, with one foreclosure for every 8.2 households. Eastpointe and Pontiac ranked second and third with rates of 8.3 and 9.2, respectively.

Detroit and its 25 ZIP codes took fourth place with a rate of one foreclosure for every 9.3 households. And it had the highest number of foreclosed homes, with 37,727 bank repossessions from January 2006 through August 2009.

The average metro rate is one foreclosure for every 15.5 households, the analysis found.

Foreclosure epidemic slams suburbs

Two blocks north of 8 Mile in Hazel Park, for sale signs are nearly as abundant as potholes on George Avenue.

The city, all contained in the 48030 ZIP code, is struggling with the highest foreclosure rate in metro Detroit.

One out of every 8.2 households has been repossessed by the lender from January 2006 through August 2009, according to a Free Press analysis of ZIP code data compiled by RealtyTrac Inc. of Irvine, Calif.

“One of the reasons we’re not surprised by this data is we were the No. 1 recipient of subprime loans in Oakland County,” said Ed Klobucher, Hazel Park’s city manager. “Foreclosure is a national problem. Even though we didn’t create it, we have to solve it.”

Eastpointe and Pontiac ranked second and third with rates of 8.3 and 9.2, respectively. Detroit ranked fourth with one foreclosure for every 9.3 households.

The foreclosure epidemic spread throughout metro Detroit, hitting nearly every community.

Birmingham had one foreclosure for every 20.8 households; Dearborn Heights had one foreclosure for every 13.2 households, and Washington Township had one foreclosure for every 12.7 households.

Communities with the lowest rates include Pleasant Ridge, with one foreclosure for every 69.6 households; Wixom, with one for every 58.7 households, and Huntington Woods, with one for every 51.3 households.

Hazel Park officials are utilizing federal and state money to help solve the problem and have an aggressive city program to deal with foreclosures. It received $1.6 million in federal Neighborhood Stabilization Program funds earlier this year.

The city is using some of that money to tear down abandoned homes in bad shape and fuel the rehabilitation of older, occupied homes.

“We are going to try to turn this crisis into an opportunity to improve our housing stock,” Klobucher said.

A drive down George Avenue shows the challenges — vacant homes with weedy lots next to neatly tended homes and a number of vacant lots.

Marshall Mandell, a foreclosure specialist for Re/Max Classic in Farmington Hills, has a bank-owned house for sale on George Avenue in Hazel Park for $9,900.

The two-bedroom, two-bath house has 881 square feet and a detached garage.

He has been handling bank-owned homes for more than six years in Michigan. He said he has his theories about why Hazel Park has suffered more than other cities. Being over the 8 Mile border from Detroit makes it a bit more expensive, and the housing stock isn’t as nice as Detroit’s in some cases.

“I think it would be very difficult to determine why that happened. It could be that those are areas where people are leaving the state and abandoning their homes,” Mandell said.

Another possibility is that overall home prices have fallen so far across metro Detroit that some areas unattainable in the past are now within reach of more people’s budgets, making the lower-priced areas less appealing.

“You can buy a home in West Bloomfield for $250,000 that is a newer, beautiful four-bedroom, two-bathroom home,” Mandell said.

“It’s just amazing, and the prices are still falling.”

Once-popular Detroit ZIP code now plagued by empty homes

Welcome to 48205 — the Detroit ZIP code with the highest foreclosure rate in the metro area over the past three years.

The area is in the northeast corner of the city, just south of Warren and west of Harper Woods. Gratiot bisects the ZIP code.

It had been one of the city’s most stable neighborhoods, known for two- and three-bedroom bungalows. Many city employees, particularly police and firefighters, lived in the area.

It was served by numerous Detroit schools, many now shuttered. For decades, the area’s children swam in the summer and skated in the winter at the Heilmann Community Center.

But 48205 now has the highest foreclosure rate, at one out of every 5.2 households, according to a Free Press analysis of the past 3 1/2 years of ZIP code data compiled by RealtyTrac Inc.

And despite the large number of homes for sale — 143 at latest count — you won’t see many for sale signs in the ground.

The houses for sale, mostly foreclosures, range in price from $50 to $49,900, according to Realcomp, the Farmington Hills-based multiple listing service.

“It’s a tool to use to break into the house or a car,” said Albert Hakim, a foreclosure specialist with Re/Max Associates in St. Clair Shores.

Hakim, who has a number of listings in the neighborhood, took the Free Press on a tour recently.

He showed one house on Edmore at the northern end of the ZIP code. The house sold for $135,000 two years ago, he said.

The house, in foreclosure but not stripped of its copper plumbing or kitchen appliances, is listed by the bank for $19,900. It has three bedrooms and 1.5 baths in 1,200 square feet.

It sits on a street of mostly tidy, occupied brick homes. The lawns are tended and pots of flowers grace some front porches and yards.

But a few blocks south, the neighborhood takes on a more abandoned feel with vacant lots, boarded-up and burned-out houses and trash dumped in tall grass on yards.

“It’s the type of neighborhood where your taxes are more than your house is worth,” Hakim said. “That’s one of the reasons it is so hard to sell a house there.”

http://www.freep.com/article/20091022/BUSINESS07/910220396/1002/Business/Foreclosures-rock-some-suburbs-harder-than-city

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Responses

  1. Grea post Brian! Where’s a link to follow your blog?


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