According to the report released by a mortgage research company, Detroit metropolitan area has reported one foreclosure per 33 homes from July to September. Only Stockton metropolitan, California has a higher foreclosure rate at 1 per 31 households. Currently, Detroit foreclosures are around 4.5 times of what the national average is.
Foreclosures in Detroit have managed to push the metro area at the number two spot on the top 100 largest metropolitan areas foreclosures list. Currently, there is one foreclosure filed per 29 households. The Detroit metro area comprises of Wayne County, which reported 28,705 foreclosure properties and a 26% rise in the previous 6 months. Other cities which make the top 10 on this list are Chicago, Detroit, Denver, Dallas, Las Vegas, Phoenix and Sacramento.
As of August 2007, Detroit foreclosure filings had increased by 53%. Wayne County foreclosures lead the way in Michigan State with 2,698 for the month of August. Following Wayne closely are Macomb and Oakland Counties at second and third positions respectively.
Prime reasons for hike in foreclosure filings? Most important reason is the high unemployment rate in Wayne Country, besides usual contributing factors such as ARM, real estate price increase and increasing home inventories. With a slowing down in the economy, people who invested in real estate in order to make quick money now find themselves stuck with these properties as they are unable to sell them.
The Detroit foreclosures market scenario is not much different than Wayne County’s. With many long-term investors finding themselves in foreclosure trouble, there is an increase in the vacant homes inventory. There is also a lack of those who want to rent the properties as many residents of Michigan State are leaving it in search of better employment and lifestyle opportunities.
However, help is at hand for Michigan foreclosures market, which witnessed a 40% rise since last year, as President Bush authorizes the Federal Housing Administration (FDA) to permit anyone with a subprime loan to refinance. An estimated 80,000 homeowners on the brink of foreclosure will be able to refinance with FDA’s help.
Does this signal the end of subprime woes for homeowners facing foreclosure possibility in America? Only time will tell. But one thing is for certain, that Detroit foreclosures are most likely to climb down from their high ranking spot and offer some relief to a tense real estate market.