Median U.S. House Prices Crash To $6,000 in Detroit
Housing-Market / US Housing Jun 13, 2009 - 06:03 AM GMTBy: Mike_Shedlock
A few years ago, after my dad passed away, we sold his Danville, Illinois house for the grand total of $14,000 which was then split among 4 siblings. Friends where I live now cannot ,fathom a house selling for $14,000.
Moreover, it was a livable house. When I grew up I never thought much about it. In fact, I thought we were solidly middle class. The house had 3 bedrooms and one very tiny bathroom. I have 2 sisters and one brother. We must have learned to share because I recall no significant fights over the bathroom or for that matter anything else.However, Danville (then a city of 44,000 now 32,000) is one thing, and Detroit is another.
In 2008 Detroit ranked as the United States's eleventh most populous city, with 916,952 residents. At its peak in 1950 the city was the fourth largest in America. The name Detroit sometimes refers to the Metro Detroit area, a sprawling region with a population of 4,425,110
Although I am a deflationist, I must admit surprise that the median home price in Detroit has fallen to a stunningly low $6,000.
Please consider a Detroit Free Press article Home sales rise as prices keep falling.
Metro Detroit home sales rose by 12.6% in May as compared with last year, yet home prices continued their fall -- an indication that the market hasn't hit bottom yet.
Overall, 5,955 homes were sold in May, compared with 5,288 sold in May 2008, according to Realcomp, a Farmington Hills-based multiple listing service. The median sales price for homes sold in May was $50,000, a 44.3% drop from $89,700 in May 2008.
Foreclosures continue to drag down prices. In May, foreclosure sales accounted for 60% of all homes sold. And the median price of foreclosed sales in the metro area was $26,400 compared with a median sales price of $110,000 on non-foreclosed homes.
In the city of Detroit, the median sales price in May was $6,000, down 29.4% from May 2008.The Danville / GM Connection
When I grew up, Danville had some industries such as the Peterson/Puritan aerosol filling plant, Hyster lift trucks, and the Tilton Foundry.
Tilton is a small town with a population of about 3,000 sharing a border with Danville. It was the home of the GM Central Foundry.
Five Brothers Plus One
Here is an interesting post about the GM / Danville connection called Five Brothers Plus One.
My name is Lee Cooper and I worked for General Motor for two years back in 1964 and 1965. We all worked at the Tilton Plant in Tilton, Illinois near Danville, Illinois. All five brothers worked over 25 years and at least two worked longer.
By the time the plant closed many of my relatives had worked there and some are still working in different positions, including management. I would hate to see GM close its doors.
The Tilton/Danville plant was constructed during WWII in 1943 by the Defense Plant Corporation to produce heavy axle castings for military trucks. GM operated the plant during the war then purchased the plant after its conclusion, incorporating it into its Central Foundry Division in 1946. The GM Central Foundry Tilton plant closed in 1993.I suppose I could say GM has been the kiss of death anywhere it has been. The reality, however, is anyplace dependent on manufacturing in general and union manufacturing in particular has been the kiss of death.
Times change. Cities that adapt thrive. Cities that can't or won't, don't.
By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.
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