Ypsi (city) foreclosure rate curving downwards

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A few posts ago, I suggested that sale prices of houses in Ypsilanti are starting to swing up over the last few months. How about the other popular metric of the housing market--the foreclosures?

Foreclosure activity, as we expect, is a downward force on home values, because the bank-owned homes dumped on the market soak up buyers. Over the last few years, from city assessing records, we can see that bank sales in the city go for half or a third the price of private sales:

With average MLS sale prices bumping along at $80,000 during that entire two year period, we can see that it was the bank sales dragging down the price. Fewer foreclosures means fewer bank-owned homes glutting the market, meaning prices can start recovering. Fortunately, Ypsi (the city, at least) is on the right side of that curve.

SEMCOG puts out a report every once in a while on "Foreclosure Quick Facts"; February 2011 was their most recent. You can grab the spreadsheet of individual community stats for the 7-county area from the bottom of that report. With a little bit of work, you can sort all of Southeast Michigan by foreclosure rates (see attachment).

SEMCOG's data shows the City of Ypsilanti as having 1 in 92 housing units go into foreclosure in 2010. This is less than half the foreclosure rate of southeast Michigan as a whole (1 in 40), and lower than even the Washtenaw County rate (1 in 76) or surrounding townships (Ypsilanti Twp: 1 in 37; Superior Twp: 1 in 34).

In fact, Ypsi City was at the 10th percentile for foreclosure rates by municipality in 2010--90% of municipalities in the 7 county area had higher foreclosure rates.

To some extent, this measure is skewed by the city's multi-family rental properties: basing the measure on foreclosed housing units means that single-family homes "don't count as much" in the measure.

Fortunately for us, the (now-former, sadly) City Assessor had put together the measure of structures in foreclosure over the past 8 years--by that measure, 1 in 55 residential structures was foreclosed on in 2010, still pretty favorable by comparison to the regional by-unit count. Oh, and dropping:

If we want to call 2003-2005 a "baseline", we're still at more than twice that rate, but down by more than a third from the 2008 peak. (The 2011 number in there is based on 50 Sheriff's Deeds recorded by the County in the first 3 quarters of 2011, multiplied by 4/3 to estimate the full year.)

Foreclosures are still an issue in the City, and we've still got some stock of bank-owned homes to clear out to allow prices to rise, but at some point our own housing market becomes less an issue than that in surrounding communities: in the first 9 months of 2011, Ypsilanti Township had 275 foreclosures, compared to the City's 50. Whether you adjust that for population, dwelling units, or structures, the Township's foreclosure rate remains frighteningly high, and there's only so much the City can do to stabilize its property values when surrounded by a community with 2-3 times its foreclosure rate.

SEMCOG_ForeclosureTables_Feb2011.xls90.5 KB

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next time: mapping foreclosures

I was hoping to include a map of those 50 city foreclosures and 275 township foreclosures referenced, to look for patterns--I'm especially interested in the Township's balance between the older, northeastern portion and the new-build portions further south--but I don't have a parcel layer for the township yet. Maybe next week.

Haven't foreclosures been

Haven't foreclosures been delayed due to the banks inability to prove ownership of the mortgages and now are expected to spike upward again this year when they "clear" that up. Foreclosures in 2011 seem to have increased for County tax foreclosures and as anecdotal evidence more houses in my neighborhood have been foreclosed this year then in any recent year.

Foreclosure timing is the

Foreclosure timing is the wild-card, yep -- are we seeing any real decrease or just a damming-up that will burst sometime soon? That shoe could drop and bump up our numbers, though certainly will hit everybody else as well.

I haven't done any in-depth look at the tax foreclosures, though again there's a timing issue -- the tax foreclosures typically happen 2-2.5 years (or more) after you stop paying, while the mortgage foreclosures typically happen after 3-6 months, so I expect the tax foreclosures to see peaks a year or two later than the peaks in mortgage foreclosures. But that's just a guess.