Detroit Bankruptcy Looms with Deficit of $446 Million in Budget of $1.6 Billion

[MarketNeutral]

Have to click on the link. Too many graphs to puck with (but you need to see them for the article to make any sense):

http://www.howestreet.com/articles/index.php?article_id=12997

Snip (it goes down hill from here):

The Economic Base

The deterioration of the economic base of the city has accelerated. There were an estimated 81,754 vacant housing units (22.2 percent of the total) in Detroit before the recession; that number increased to an estimated 101,737 (27.8 percent of the total) in 2008.

The average price of a residential unit sold in the January through November, 2009 period was $12,439, down from $97,847 in 2003. Remaining businesses and individuals are challenging property tax assessments on parcels that have lost value and, in some cases, cannot be sold at any price.

More than half of employed city residents work outside the city limits; the metro area has the highest unemployment rate of the 100 major metro areas in the U.S.

[Horn]

They could cut it in half by creating the world's largest wrecking ball, and selling the demolition coverage rights to Fox.

[iOWNme]

Family homes in Detroit are selling for as little as $10 (£6) in the wake of America's financial meltdown.

Homes in Detroit sell for $10 (http://www.telegraph.co.uk/news/worldnews/northamerica/7427691/Detroit-family-homes-sell-for-just-10.html)

http://i.telegraph.co.uk/telegraph/multimedia/archive/01595/Detroit_1595630c.jpg



The once thriving industrial city has suffered a dramatic decline following the global economic crisis.

According to Tim Prophit, a real estate agent, the crisis has led to a unprecedented portfolio of homes, but they are failing to sell.

He said there were homes on the market for $100 (£61), but an offer of just $10 (£6) would be likely to be accepted.

Speaking on a BBC 2 documentary, Requiem for Detroit, to be screened on Saturday, Mr Prophit said: "The property is listed by the city of Detroit as being worth $35,000 (£22,000), but the bank know that is impossible to ask.

"This part of town has got a lot of bad press in the media because it featured in Eminem's film 'Eight Mile', but that particular road is fifteen minutes up the road and that is a long way in Detroit."

Homes offered in viewing brochures as early 1920s example of colonial architecture would once have made handsome homes but are no longer sought after.

Mr Prophit, of The Bearing Group, said: "This house was foreclosed by the bank a couple of months ago and was offered to us to sell.

"But we can only put the boards up on the windows to protect the property, we can't be here 24 hrs a day to stop the squatters and the crack addicts from moving in.

"Detroit is a city in decline. We are known as the Murder Capital of America, because of the number of deaths each year."

Mr Prophit said: "Since the subprime mortgage crisis and the collapse of Fannie Mae and Freddie Mac, the banks have been foreclosing on properties at an increase of 15 per cent every nine months.

"Last year my firm the Bearing Group dealt with 394 foreclosed properties which all sold for under $1000.

Five years ago the average home price in Detroit was hovering around the $100,000 (£61,000) now that has fallen to $11,500 (£7,000).

Detroit, home to the three big US car makers, General Motors, Ford and Chrysler, Detroit has been hit by a perfect storm of unemployment, falling house prices and the near bankruptcy of the automotive industry.

Figures from the U S Bureau Of Labor Statistics show Detroit has the worst unemployment in the entire country at 17.7 per cent.