Tuesday, March 20, 2007

GOING ONCE, GOING TWICE, SOLD TO THE MAN WITH A DECENT CREDIT LIMIT ON HIS VISA CARD

I'm no expert on automobiles, housing, or economics, but I'm gonna go out on a limb here and say the following indicates industry-wide & city-wide mismanagement: Reuters informs us that in Detroit, the cost of a car outstrips that of a house.

Apparently (and this really should come as no surprise), the combination of the failed local automotive industry, urban blight, and "rising cost of mortgage financing for Detroit borrowers with weak credit" is sending housing prices down faster than you can say foreclosure.

A closet in Grosse Point or Bloomfield Hills probably costs more than a house in Detroit city limits.

I'd like to dig further for some snarky commentary, but this really is no joke. People with almost nothing are losing their last shreds of wealth or savings. And the city that once upon a time housed America's manufacturing muscle continues its 40 year slide into the third world. And most ominously, that particular manufacturing sector marches without pause into irrelevance and decay.

Lots of cities, most notably Green Bay, have claimed the nickname, Titletown, U.S.A. I think it should be Detroit, where one can get title to a house at an auction with a checkbook.

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12 Comments:

Blogger Thrillhous said...

Love the label.

I've never been to Detroit, but from what I've read and seen, it sounds a lot like Atlantic City, only without the gambling. Maybe they should bring in gambling, go for a Vegas makeover.

10:40 AM  
Anonymous John Royal said...

I have been to Detroit. I went to see a Tigers game at Comerica Park. Didn't stay in Detroit, of course, stayed with a friend in one of the nice suburbs.

It's kind of strange. In the area around Comerica, it was a combination of really run-down ghetto and yuppie-type places. There was a fancy theater, a 2nd-City comedy club, a gigantic sports bar, and Ford Field being built across the street.

But I've been lots of places, and I swear, this is one of the few places that I really don't want to go back to -- I'd go just long enough for a ball game.

I didn't see any sign that the city thought that it had a future.

Oh, and for what it's worth, Detroit does have gambling. There were several casinos in downtown Detroit, and many just over the lake in Canada. But the Vegas work-over didn't seem to be taking.

11:40 AM  
Blogger Mort said...

The automakers don't have the big brass ones anymore. Bush is talking with them, but saying all the things they don't want to hear. Reality is a beotch after all. What's a poor corporate fascist to do?

12:38 PM  
Blogger George said...

Cities are so 20th century, Mike. We'll all be living virtually soon, so the outside world won't matter.

12:42 PM  
Blogger Mr Furious said...

I've been in Michigan for six years, and here's what I can say about Detroit... the ballpark is beautiful. I go to several Tiger games a year. Yes, there is a beautiful theatre across the street, some big bars and now, Ford Field. But as some one who came to MI from NYC, I can tell you the most shocking thing about Detroit is that when you leave a game and walk a block or two back to your car, you walk in the shadow of huge vacant skyscrapers. Twenty- thirty- maybe even forty-story buildings with no windows.

The fact that this has to be the most valuable real estate in the city and it is vacant is almost inexplicable.

Now, in the last few years, there have been inroads and improvements—there is downtown loft living in some of those same buildings. But there are no services. What is the point of living downtown in an area where every other block still looks like Beirut, when you still need a car, because there are no jobs there. That you have to drive a half hour out of the city to find a grocery store?

I went to the Detroit Institute of Arts for the first time in Dec. A first-rate art museum just down the road from the ballpark "oasis." But in between is desolation.

In New York they talked about the "broken window" theory. That a broken window in your neighborhood led to grafitti, led to loitering, to drugs, to crime, etc... What is a Detroit resident supposed to feel about their neighborhood when they have forty stories of broken windows? Or entire broken blocks?

The Michigan Central Train Depot (photo) stands off to one side of downtown as you approach the city on the highway. It is a grand building, and people have tried to come up with grand plans for it. But in the meantime you can see straight through it from a half mile away because it is gutted. Good for nothing except illegal urban spelunking. A constant reminder that what was once great is now garbage.

12:42 PM  
Blogger Mr Furious said...

By the way, the best (solo) Robert Plant song ever?

"Worse Than Detroit."

12:44 PM  
Blogger Mike said...

From what I've heard, one gambles with his life when he wanders a few blocks away from the "developed downtown" area.

What's a poor corporate fascist to do?

Take the assembly line, and move it south-of-the-border, or across the big pond, etc.

We'll all be living virtually soon, so the outside world won't matter

What's this future tense thing? You still leave the home? You go . . . outside?

Furious -

I hear you, man. Even though I've never been to Detroit (and don;t plan to change that), the pictures I've seen and the stories I've heard make me really, really sad. I love cities, and I love the culture & community that built them. Detroit, though, is a tragedy.

Lots of villains, from every class, color, and community, and no one -- in 40 years -- that dared to step up to the plate and try to reverse things.

It strikes me as a model for what not to do, on the individual, community, municipality, corporate, state & federal level.

(Similar story with Newark, but it was never a city of Detroit's scale, though it was pretty big once.)

1:32 PM  
Blogger Coop said...

I can charge a house in Detroit on my Amex.

11:06 PM  
Blogger Dwilkers said...

Mike...did you read the story you linked?

You:

People with almost nothing are losing their last shreds of wealth or savings.

From the article:

Prices have gained less than 2 percent per year in the five years since 2001, when the auto industry entered a renewed slump...

Michigan was the only state to see home prices fall in 2006. The national average price rose almost 6 percent but prices slipped 0.4 percent here, according to a federal study.


Everything else in the article related to housing price is anecdote, not data.

An increase of 2% per year isn't a loss, and an average national increase of 6% - over twice the growth rate of the economy - is hardly an imploding housing market as you call it in the next post.

------------

My favorite hyperbolic statement from this morning's internet journey comes later in that same article though;

a sprawling, four-bedroom mansion...fetched just $135,000

Wow a 4 bedroom house is a mansion now. I live in a mansion. Who knew?

8:41 AM  
Blogger Mike said...

An increase of 2% per year isn't a loss, and an average national increase of 6% - over twice the growth rate of the economy - is hardly an imploding housing market as you call it in the next post.

Dwilkers, this isn't even keeping up with the (real) rate of inflation.

8:56 AM  
Blogger DED said...

Sad.

5:53 PM  
Blogger Mike said...

Indeed it is.

7:35 PM  

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