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Some Startling Financial Figures

Yeah, yeah. I read your comments, Dear Blog Readers. I know you think (sometimes) that I'm repeating well-known information about this region's economic future. Well, sometimes, these facts are so stark they bear repeating.

This week, Oakland County Executive L. Brooks Patterson – manager of what is arguably one of the best-run counties in the region if not the nation – noted the following:

Property values (in Oakland County) will continue eroding for the next three years and could fall 50 percent or more from their peak three years ago. Patterson also said property tax revenues may not return to 2007 levels for 10-15 years, forcing local governments and schools to make cuts amid strained budgets.

Ugh. Does Metro Detroit have a 10-15 year time frame to recover?

The executive's presentation also estimated that Oakland County will have about 10,000 foreclosures for 2010, exceeding the record set in 2008. (The rate decreased slightly in 2009, but the county credited that to the federal government's intervention). And those foreclosures are just the beginning.

With over 60,000 jobs lost in Oakland County in 2009, even if we assume that prior to losing their jobs many of today's unemployed had savings accumulated after long-term careers in the automotive and construction sectors, it still could be two years or longer before they enter the foreclosure cycle fueling another round of taxable value declines.

I'm always one for seeing rainbows, unicorns and cotton candy. But even I find these numbers startling in what is widely considered to be the nation's fourth wealthiest counties.

And this is all more reason why Oakland County -- and all of us -- have to be concerned about Detroit, the region's falling housing values and the real issue of job creation.

Those I talk to about this issue say there is a bright side: Lower home prices means more affordable housing in all of Oakland County. The same obviously is true in Wayne and Macomb. If this county's economic strategies – along with those of the rest of Metro Detroit – can increase the number of available jobs, then the other attractive things about living in the D will draw people here to stay.

No answers. Just pondering the obvious.

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  • 1

    One of the long term fallouts from the housing crisis that no one wants to talk about is that because prices are so low people who would have previously been unable to buy into certain areas can now do so. This would seem to be a good thing but since some of these new buyers will only be barely able to afford these reduced priced homes they will be unlikely to afford to improve them or maintain them properly. Also, when the inevitable happens and school districts in these areas ask voters for millage increases, these same new homeowners will in all likleyhood say "no".

    Now I am not being a snob or worse, a racist in this observation, but merely trying to point out another cloud in an otherwiise bright sky as far as falling home prices are concerned. It IS good that more people have access to better homes, but it is not a good thing in the long run. I truly fear an overall decline in what makes certain areas more desireable and a resulting decline in the quality of life throughout the entire region. Afterall, house prices are affordable in places like Mississippi and Alabama, too, but I wouldn't trade the quality of life there just to save a few bucks on the cost of a home. You get the quality of life that you're willng and able to pay for.

  • 2

    The best thing in the long run would be architect designed houses and townhouses that are of first class concrete and steel construction.

    They last with minimal upkeep.

    We've got to quit running around chopping trees as if wood is the only answer... we have depleted our once beautiful forests because of the housing lust.

    And it took a lot of effort to Metropolitanize Toronto.
    Here everyone has the old mine, mine attitude of the 4 year old.


  • 3

    No, Ms. Dybis, Some things do not bear CONSTANT repeating. Please move on. Tell us something we do not already know that is bad and that is fine. I, personally, see no benefit to this region by the constant harping on the negative without any solutions being offered. Like you said, you have no answers. Then what is the point? I for one am looking for SOLUTIONS to problems, not just observing and reporting on them. That's what I would do if TIME gave me this space. I will report very soon (No doubt on yet ANOTHER negative story) some of the solutions on which I am working.

  • 4

    Oh quit your whining, "kevinuofdhigh." This region is full of babies who can't face the truth. Fact is, grown-ups who own property find news like this quite relevant, and most of us don't give a crap what "solutions" some haughty high school child has to offer. It might seems clever to spout cliches about finding solutions, but it's a well-worn, knee-jerk substitute for reasoned thought.

    Sarcasm aside, It's hard to find solutions if people bury their head in the sand and refuse to let people point out the region's problems. It's like going to a doctor and saying "Don't examine me to see what's wrong; just give me a prescription."

    Reality has both good and bad news. To insist on only one side is to create a fantasy world that offers no real solutions at all.

  • 5

    My Stanley,

    I am a 45 year old man, not a child. I was raised to solve my differences with my intellect, not resorting to childish name calling. If you would have read what I said, the point was that old news is not new news. Rehashing of the same negativity gets us nowhere. Stop me if I'm wrong, but there is no shortage of people pointing out this region's problems. There IS a shortage of reporting on those of us doing something about it. You sir, have offered nothing but dismissive dribble.

    I face the facts everyday. I listen to people afraid to invest in this region everyday because all they hear is negative news. That is my reality, not fantasy.

  • 6

    Agreed. This is totally depressing, especially for those of us who, at one point, had a decent amount of equity in our homes. Interestingly, not everyone is under water. In some ways, the people who aren't are in worse shape than those who are. The trend these days is to allow your house to be foreclosed on or short sell it to get out from under a top heavy mortgage. People who do that get to live off what would have been their mortgage payments. They have newfound disposable income while living in their homes for free. I heard about one family who stopped paying their mortgage three years ago, and the bank still hasn't gotten around to foreclosing on them due to the backlog of foreclosed properties. But, for those of us who have been dutifully making our payments on time for years, the remaining mortgage is still less than what we owe even though our property values are halved, largely as a result of the short sales and foreclosures. Believe it or not, it's the homeowners who play by the rules that are in the worst possible spot.

  • 7

    In a round about way, I agree with both Stanley and Kevin. The problem I have is that the ONLY things the national media reports on are Detroit's problems. There is no attempt at balanced reporting. When it comes to Detroit, if it's not negative, it's not reported. As Kevin pointed out, outside investment in Detroit in everything from tourism to manufacturing is harmed by the biased, one sided and irresponsible actions of the national media.

    But as Stanley said, Detroit has buried its head in the sand for far too long. We have all known about the crime, the corruption, and the decay for decades but for some reason have chosen to ignore it hoping perhaps, that it would suddenly and magically, disappear. That's not gonna happen. Maybe the exposure and humiliation the national media has heaped on our heads will finally wake us up. Time we realized that we created most (not all) of this mess and it's up to us to clean it up.

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