Bloomfield Hill’s Median Income Ranks Top in Southeastern Michigan

In Southeastern Michigan the average median income was $50,750 in 2015, according to the American Community Survey. Of the seven counties in the region, Wayne County had the lowest median income at $41,210 while Livingston County had the highest at $75,200. Although Livingston County had the highest median income in the region it was Oakland County that had the most number of communities with median incomes above $100,000. In total, there were 12 communities in Oakland County with median incomes above $100,000 and the city of Bloomfield Hills had the highest median income, both county and region-wide, at $172,768.

Income disparity is a growing issue at the national and local levels. In Michigan, this disparity is particularly exemplified due to the fact that the average hourly wage in the state has decreased from what it was a decade ago. According to a recent Crain’s Detroit article, the median hourly wage in Michigan in 2017 is $17.32 and in 2007 it was $18.67. In 2010 in Michigan, residents had a 46 percent chance of out earning their parents, according to a recent Stanford study, which is highlighted in the Crain’s article. The example in the article used to highlight this decline in wages is that in 1977 a newly employed high school graduate at General Motors was earning about $26 an hour (number adjusted with inflation) and today that wage is about $16. Other aspects that contribute to an individual’s economic mobility include access to jobs, particularly those with higher wages, and educational attainment.

In next week’s post we will see how median income has changed regionally since 2000 and 2010, further exploring the claim that upward mobility has declined.

 

Percentage of Occupied Rental Units Continues to Climb in Southeastern Michigan

There were nine municipalities in Southeastern Michigan that experienced more than a 100 percent increase in occupied rental units between 2010 and 2015, according to the American Community Survey. Sylvan Township in Washtenaw County had the largest increase at 301 percent. In 2010 the township had 2.32 percent of its housing stock serving as filled rental units and by 2015 that increased to 9.3 percent, or a total of 109 rental units. Overall in Sylvan Township in 2015 there were 1,169 occupied housing units. All the municipalities with such high rental rate increases were among the smaller communities in the region.

Detroit, the largest city in the region, had an 11 percent increase in rental units. In 2010, 46 percent of the city’s occupied housing stock was rental units and in 2015 that number increased to 51 percent, or about 124,000 units. There were only four Census tracts in Detroit (two in the north east corner and two on the west side) where the percentage of rental units increased by more than 150 percent. The northwest area of the city had about 25 Census tracts that experienced an increase between a 25 and 75 percent in occupied rental units. On the opposite side of the spectrum, there were 178 Census tracts in Detroit where the percentage of occupied rental units decreased by up to 60 percent. The data we are looking at in this post is related to occupied housing units, meaning increases and decreases can be directly correlated with the number of occupied rental units and overall occupied housing units. Overall, in 2010 in Detroit there were about 272,000 occupied housing units, of which about 124,000 were rentals. In 2015 the total number of occupied housing units decreased to about 256,000 while the number of rental units increased to about 129,000.

 

In a recent post we discussed how Highland Park had the highest percentage of occupied rental units in the region at 64 percent. Between 2010 and 2015 there was an overall 6 percent increase. In 2010 there were about 5,000 occupied housing units of which about 3,050 were occupied rental units. In 2015 there were about 4,500 occupied housing units, of which 2,880 were occupied rental units.

Other areas to note that have experienced increases in the percentage of rental units are the inner-ring suburbs that border Detroit. For example, Redford experienced an 87 percent increase in occupied rental units between 2010 and 2015, Eastpointe experienced a 61 percent increase, Ferndale experienced a 46 percent increase, Warren and Hazel Park each experienced a 26 percent increases.

 

There were 42 municipalities that experienced a decrease in the percentage of rental units occupied between 2010 and 2015 in the region. Similar to the municipalities with among the highest percentage of occupied rental unit increases, those with the decreases also had smaller populations and housing stocks. For example, the city of Huntington Woods in Oakland County experienced a 35 percent decrease in the occupied rental units. However, in 2015 there were about 2,500 total occupied housing units, 77 of which were occupied rental units.

 

While we do know that the total number of rental units has increased over the years as a reflection of the economy and the housing crisis, this post also brings to light how a community’s overall housing stock must also be considered.

Percentage of Rentals on the Rise in Southeastern Michigan

Between 2010 and 2015, 72 percent of the communities in Southeastern Michigan experienced an increase in the percentage of homes that served as rentals, meaning majority of the communities experienced a decrease in residents serving as homeowners. Of those communities, there were 11 communities in Southeastern Michigan that experienced rental rate increases above 10 percent between 2010 and 2015. The city with the largest increase was Milan, located in Monroe County, at 20.2 percent. According to data from the U.S. Census Bureau, in 2010 23.1 percent of the homes in Milan served as rentals and by 2015 that increased to 43.3 percent.

At the county level, Wayne County experienced the largest increase in communities that saw rental rates increase. According to the data, 93 percent of the Wayne County communities experienced an increase in rentals between 2010 and 2015. Of those Wayne County communities, Belleville experienced the highest increase at 15.1 percent. In 2010, 27.4 percent of the homes in Belleville were rentals and by 2015 that increased to 42.4 percent.

Overall, the areas of Southeastern Michigan that experienced the greatest increase in the percentage of homes serving as rentals between 2010 and 2015 were Detroit, and its inner-ring neighbors, along with the western side of Macomb County. Of the inner-ring suburbs, Harper Woods experienced the highest percentage increase in homes being rented at 13.2 percent. In 2010, 24.7 percent of the homes were rentals and by 2015 that increased to 37.9. Just below Harper Woods was the city of Ferndale, another inner-ring suburb, with an increase of 12.8 percent. In 2010, 27.5 percent of the homes in Ferndale were being rented and by 2015 that increased to 40.3 percent. Eastpointe, Utica and Roseville, all Macomb County cities, two of which neighbor Detroit, came in just below Ferndale with rental rate increases at 12.2, 11.6 and 11.3, respectively. Of these three communities, Utica, which is in the northwestern part of Macomb County, had the highest percentage of rentals in both 2010 and 2015. In 2010, 35 percent of the homes in Utica were rentals and by 2015 that increased to 46.7 percent.

Of all the communities in Southeastern Michigan, Detroit ranked 60th when examining how rental rates increased between 2010 and 2015. In 2010 the percentage of homes being rented was 45.5 and in 2015 that increased to 50.6. Within the City’s limits there were six Census Tracts that experienced rental rate increases between 25 to 52 percent. A pocket of the city’s northwest side, near Palmer Park and Rosedale Park, appears to be experiencing rental rate increases up to 25 percent. There is also a pocket on the city’s west side that is experiencing a decrease in rentals. In Southwest Detroit there are seven Census Tracts that each have experienced a decline in the percentage of rental homes by up to 22 percent; there is a similar pocket with nine Census Tracts just west of Highland Park.

 

As our previous posts show our region has experienced hundreds of thousands of home foreclosures from 2010 through 2014 as part of the Great Recession. In all probability most of those homeowners have become renters, assuming they have not left the region. This explains much of the shift to rental ownership, though some could come from the construction of new rental properties or the demolition of homeowner properties. The foreclosures and decline in home ownership represent a massive loss in wealth for homeowners and a massive increase in revenue for rental owners.

Wayne County has Highest Medicaid Births in Southeastern Michigan

The political battle over the Affordable Care Act continues to swing back and forth in Washington, but it’s consequences will be felt directly in Southeastern Michigan. Data on Medicaid payments for prenatal care and births in Southeastern Michigan make clear that the ACA, in particular the Medicaid expansion, led to an increase in federal support for prenatal care and births in our region, particularly in two counties.

Births paid for by Medicaid grew between 2010 and 2015 in Monroe and Wayne counties. In 2010, 45 percent of the births in Monroe County were paid for by Medicaid and in Wayne County that number was 46 percent. By 2015 that number increased to 49 percent in Monroe County and 56 percent in Wayne County. In that time frame Monroe County also had the largest decrease and increase. In 2013 50 percent of the births in Monroe County were paid for by Medicaid and in 2014 that number dropped to 32 percent, before increasing back to 49 percent in 2015.

According to the Michigan Department of Health and Human Services, a Medicaid patient about $8,000 is allocated to each woman to cover prenatal, birth and postpartum care.

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In 2015, according to data from the Michigan Department of Health and Human Services, Wayne County had the highest percent of births paid for by Medicaid than any of the other counties in Southeastern Michigan. Of the births in Wayne County in 2015, 56 percent of them were paid for by Medicaid; this was equivalent to 13,145 births. As a comparison, across the entire state of Michigan 43.5 percent of births were paid for by Medicaid. Regionally, Livingston County had the lowest percentage of births paid for by Medicaid at 17 percent, that was equivalent to 317 births.

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Detroit 30-Year Mortgage Rates Below National Average

  • The average 30-year mortgage interest rate in Detroit is lower than the national average (weekly);
  • The Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area shows home prices continue to increase monthly and annually.
  • The unemployment rate increased at the State and local level(monthly);
  • Regionally, Washtenaw County’s unemployment rate remained the lowest;
  • The Purchasing Manager’s Index for Southeastern Michigan dropped below 50 but is expected to increase (monthly);
  • The Commodity Price Index dropped to its lowest point in over a year (monthly);

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On March 15, 2017 the Federal Reserve Raised the federal interest rate by .25 percent; it now ranges between .75 and 1 percent. This is the third time the rate has been raised since the financial crisis. Prior to last week rates were raised once in 2015 and once in 2016. The rate increase has been attributed to strong job growth, more investment from businesses into operations and a higher rate of consumer spending.

This rate increase will impact credit products, such as mortgages and auto loans, in addition to savings, home equity lines of credit and credit cards. Another item that may be affected is new home starts, a statistic that is not readily available through the Southeastern Michigan Council of Governments website, as it once was.

Above are three average 30-year mortgage interest rates at the national, state and local levels. These rates were provided by bankrate.com, which does a national survey of large lenders on a weekly basis. As a 30-year fixed rate mortgage is the most traditional type of home financing this was chosen to show the rate differences. The State of Michigan had the lowest average interest rate for the week of March 16 at 4.14 percent and the national average was the highest of the three at 4.44 percent. Detroit’s average 30-year fixed mortgage interest rate was 4.42 percent, which according to bankrate.com is an increase from the previous week. According to bankrate.com, Detroit’s rate for an average 30-year fixed mortgage rate in the Detroit area is equivalent to about an additional $4.50 a month on a mortgage for $165,000. Such an increase brings the average monthly payment to about $819.

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The above charts show the Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area. The index includes the price for homes that have sold but does not include the price of new home construction, condos, or homes that have been remodeled.

According to the index, the average price of single-family dwellings sold in Metro Detroit was $109,790 in October 2016. This was an increase from $6,520 from October of 2015 and an increase from $11,570 from October of 2014.

**This information has not been updated since December of 2016. It was presented in a previous post, however due to the relation to the information above we are republishing it.**

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According to the most recent data provided by the Michigan Department of Technology, Management and Budget, the unemployment rate for the State of Michigan slightly increased to 5.2 in January of 2017 from 5 the previous month. Detroit, however, had a big increase. Unemployment in the City of Detroit increased from to 9.8 in December to 12.3 in January. The January unemployment rate for Detroit in 2017 was 1.2 points higher than it was the previous year at that time.

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The chart above displays the unemployment rates for each of the seven counties in Southeastern Michigan for January of 2016 and 2017. For 2017, St. Clair County had the highest rate at 7.7 while Washtenaw County had the lowest at 3.4. St. Clair and Wayne counties were the only two in the region with unemployment rates above 7 in January. Four of the seven counties (Livingston, Monroe, Oakland and Washtenaw) all had unemployment rates at or below 5.

While in 2016 St. Clair County again had the highest unemployment rate for the month of January, regionally, and Washtenaw County had the lowest, it is interesting to note that unemployment rates were higher across all counties in 2017. Wayne County had the largest difference between 2016 and 2017 at 1 point; the unemployment rate was 6.2 in 2016 and 7.2 in 2017.

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The Purchasing Manger’s Index (PMI) is a composite index derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 indicates the economy is expanding.

According to the most recent data released on Southeast Michigan’s Manager’s Index, the PMI for December 2016 was 53.3, a significant drop from an index of 61.9 the prior month. History shows though that January traditionally has a lower PMI readings and it is expected to increase for February.

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The January 2017 Commodity Price Index dropped to the lowest it has been since September of 2015. At that time the Commodity Price Index was 41.2 and this most recent reading was 41.7. There is speculation from the Institute of Supply Management-Southeastern Michigan that this drop could reflect policy changes from the new federal administration, especially as gas and oil prices are up.

Economic Growth Slow for Southeastern Michigan Counties

According to four performance indicators, identified by the National Association of Counties (NACO), Southeastern Michigan has yet to fully recover from the recession. There are counties though, that are faring better than others, regionally. For example, Washtenaw County has recovered beyond it’s pre-recession peak recovery on all four performance indicators, while Wayne County has only overcome one of those peaks.

The four indicators NACO uses to determine county economic growth are:

  •   Unemployment Rate
  •   Job Growth (total number of jobs available)
  •   Economic output growth (Gross Domestic Product)
  •   Median Home Value Growth

To determine if there has been growth NACO first graphed annual values from 2002 to 2016 indicating which year between those two was the pre-recession peak (Or nadir, in the case of unemployment). If the 2016 value had not reached the pre-recession peak, which was typically 2005 for majority of the indicators for Southeastern Michigan, NACO deemed there to be no recovery in that area for that county.

Overall, the data shows that economic output recovery and median home values have been the slowest recovery throughout the region. Four the seven Southeastern Michigan counties have yet to experience pre-recession GDP values (adjusted for inflation) and two of the seven have yet to experience median home value recovery. All of the counties have had their unemployment rates drop to pre-recession numbers, or less.

Living

According to NACO, Livingston County ranked in the highest section for economic recovery due to the fact that indicators showed job, unemployment, gross domestic product and home price recovery rates in 2016. For the total number of jobs available Livingston County’s pre-recession peak was in 2005, as was its GDP and median home price value. All three of these increased by 2016. The data also shows that between 2015 and 2016 the county’s unemployment rate dropped to 3.8 percent, which was a 1.1 percent decline from the previous year. Livingston County’s job growth rate increased by 1.8 percent, its economic output growth rate increased by 2.6 percent and its median home prices grew by 7.4 percent between 2015 and 2016.

The image below shows that Livingston County’s economic indicators have been showing signs of a stronger economy, however its economic output growth rate and its median home prices growth rate both fall below that of the average mid-sized county economies’.

None the less, there is job growth in Livingston County and the top five specialized industries in the county in 2016 were:

  •   Professional and business services
  •   Construction
  •   Real Estate
  •   Financial activities
  •   and Arts and Entertainment

Macomb

Macomb County has only recovered in two of four performance areas to its pre-recession peaks, according to NACO. One of those two areas that experienced recovery is in job growth; the pre-recession peak was in 2005 and recovery began in 2009, and has continued to climb. Additionally, the unemployment rate was at 5.1 percent in 2016 is below the county’s 2002 pre-recession low point of 6.4 percent. The GDP peaked in 2005 by 2016 it had yet to climb back to the inflation adjusted number; however the county has experienced a steady increase since the 2009 low point. Median home values also have yet to reach the pre-recession peak in Macomb County, which was in 2005.

Between 2015 and 2016 Macomb County had a job growth rate of 1.3 percent, an economic output growth rate of 2 percent and a median home prices growth rate of 5.8 percent. Also, between 2015-16 the unemployment rate dropped 1 percent to 5.1 percent. While there has been economic growth in Macomb County, a look at the charts show that it has been slow and it remains below that of other large counties across the country.

With a job growth rate at 1.3 percent between 2015-16, the top five specialized industries in Macomb County by employment are:

  •   Manufacturing
  •   Construction
  •   Federal Government
  •   Management and Enterprises
  •   Military

Monroe

By 2016 Monroe County experienced growth in three of the four performance indicators, according to NACO. While it experienced job, unemployment rate and home price recovery, its economic output growth rate was not considered favorable compared to pre-recession numbers. Monroe County’s GDP peaked in 2003 and by 2009 recovery had begun. However, in 2016 that recovery had yet to reach the 2003 inflation adjusted value, although it was close.

Also, according to NACO, between 2015 and 2016 Monroe County had a jobs growth rate of 1.2 percent, an economic output growth rate of 1.9 percent and a median home prices growth rate of 4.1 percent. The unemployment rate was at 3.3 percent in 2016, a 1.1 percent decrease from the prior year and a 2.2 decrease from 2002.

In Monroe County in 2016 the top five specialized job industries were:

  •   Construction
  •   Transportation
  •   Utilities
  •   Agriculture
  •   Mining

Oak

Similar to Monroe County, Oakland County only experienced economic growth in three of the four categories, according to NACO. Oakland County’s GDP has not recovered since its 2003 pre-recession peak; but like many of the other counties in the region recovery began in 2009. Between 2015 and 2016 though, Oakland County’s economic output growth rate did increase by 2.3 percent while its job growth rate rose by 1.4 percent and its median home prices growth rate went up by 6.4 percent. The annual unemployment rate in Oakland County decreased by .8 percent between 2015 and 2016 to a total of 4.2 percent. As has been seen by all the counties discussed thus far, Oakland County’s overall performance indicators remain below other large counties in the country.

In 2016 in Oakland County the top five specialized industries by employment were:

  •   Professional and business services
  •   Financial activities
  •   Real Estate
  •   Information
  •   Management and enterprises

StC

In St. Clair County, total recovery has yet to be seen in both the job growth and economic output growth rate sections, according to NACO. In St. Clair County the total number of jobs available peaked in 2004 and in 2016 that number had yet to reach the pre-recession peak. However, there was a 1.1 percent jobs growth rate increase between 2015-16. Additionally, there was a 1.9 percent economic output growth rate between 2015-16. However, the GDP remained just below its 2005 peak. While those two areas have yet to recover, St. Clair County’s unemployment rate is below where it was at in 2002, its previous low point. In 2016 it had an unemployment rate of 5.7 percent, a decrease of 1.4 percent from the previous year. The county’s median home prices have also experienced growth. In 2016 the median home values had climbed above the previous 2005 peak. Additionally, between 2015-16 there was 4.5 percent increase.

St. Clair County’s top five specialized industries by employment are

  •   Retail
  •   Construction
  •   Utilities
  •   Agriculture
  •   Military

Washt

According to NACO, Washtenaw County has experienced economic growth across the board, with its unemployment rate dropping below 2002 rates and its job, economic output and median home price growth rates all rising above the 2005 values, the county’s previous peak values. In 2016 Washtenaw County had an unemployment rate of 2.3 percent, a 1.2 percent decrease from the previous year and also a decrease from its 2002 rate of 3.6. The county’s job growth rate grew 1.7 percent between 2015 -16. The economic output growth rate for Washtenaw County increased by 2.6 percent between 2015-16. Finally, the median home price growth rate increased by 6.7 percent between 2015-16. The top five specialized industries in Washtenaw County by employment are:

  •   State and local government
  •   Professional and business services
  •   Arts and entertainment
  •   Information
  •   Federal government

Wayne

Wayne County is the only county in the region that has recovered in only one of the four areas, according to NACO. In 2002 Wayne County had an unemployment rate of 6.8 percent and in 2016 it was 6 percent, according to NACO. Since 2015 Wayne County has experienced positive growth rates for jobs, economic output and median home prices, but none have recovered to the pre-recession peaks. Wayne County’s unemployment rate was at its lowest in 2002 while the total number of jobs available was at its highest that year. Home values in the county peaked in 2005 and the GDP peaked in 2003.

While recovery has started in Wayne County, median home values and the total number of jobs available didn’t start to increase until 2010 or after, which is later than the 2009 recovery year many of the other counties in the experienced.

In Wayne County the top five specialized industries by employment:

  •   Healthcare and social assistance
  •   Other services
  •   Transportation
  •   Management and enterprises
  •   Federal government

Washtenaw County’s Unemployment Rate Lowest in Region

  • The unemployment rate across the state remained stagnant while the rate in the city of Detroit decreased (monthly);
  • Regionally, Washtenaw County had the lowest unemployment rate;
  • The number of employed Detroit residents dipped, but increased on an annual basis, (monthly);
  • The Purchasing Manager’s Index for Southeastern Michigan remains strong, and is expected to grow in 2017(monthly);
  • The Commodity Price Index remained at 50 (monthly);
  • The Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area shows home prices continue to increase monthly and annually.

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According to the most recent data provided by the Michigan Department of Technology, Management and Budget, the unemployment rate for the State of Michigan slightly increased to 5 in December of 2016 from 4.9 the previous month. Unemployment in the City of Detroit decreased though, from to 11.3 in October to 10.4 in November (December data was not yet available). The November unemployment rate for Detroit in 2016 was 0.2 points lower than it was in November of 2015.

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The chart above displays the unemployment rates for each of the seven counties in Southeastern Michigan for November of 2016. Wayne County had the highest rate at 6.1 while Washtenaw County had the lowest at 3. Not only did Washtenaw County have the lowest rate in the region, but it also had the lowest rate in the state (Ottawa County in Michigan also had a 3 point unemployment rate). Second to Wayne County, in the region, came St. Clair County with an unemployment rate of 5.5

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In November of 2016 the number of employed Detroit residents decrease to 219,867, a small drop from the 220,033 employment number in October. Between November of 2016 and November of 2015 there was a total increase of 7,759 employed Detroit residents, according to the Michigan Department of Technology, Management and Budget.

Between October and November the labor force in Detroit decreased by about 2,700. In October the labor force was reported to be 248,042 and in November it was reported to be 245,328.

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The Purchasing Manger’s Index (PMI) is a composite index derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 indicates the economy is expanding.

According to the most recent data released on Southeast Michigan’s Manager’s Index, the PMI for December 2016 was 61.9, an increase of 4.8 points from the prior month. The December 2016 PMI was an increase of 6.1 from the previous year. The PMI is considered to be strong, and expected to continue to grow into 2017, according to the Southeast Michigan’s Manager’s Index. This growth is expected, in part, because of an increased production index and growth in the labor market.

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The December 2016 Commodity Price Index remained unchanged at 50 points between November and December. However, it increased 2.8 points from December of 2015. The three month average for the Commodity Price Index was 49.

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Ann Arbor Has Highest Total Equalized Residential Value in Southeastern Michigan

There are four types of equalized property values: residential, industrial, commercial and agricultural. Residential property values are the largest contributor to the region’s total property values. In this post the 2016 total equalized values of residential properties are presented, meaning the values presented represent the municipality as a whole and not the average per residential property.

According to the State of Michigan, the equalized value of a property is the assessed value (which is about half the property’s market value and is set by the assessor) that has been adjusted by the County Board of Commissioners and the Michigan State Tax commission to ensure they are at the constitutional 50 percent level of assessment. All information presented in this post has been approved by the local county Board of Commissioners.

In the tri-county area (Macomb, Oakland and Wayne counties) Oakland County experienced the largest percentage increase in total equalized property values between 2015 and 2016. Oakland County experienced a 7.4 percent increase while Macomb and Wayne both experienced about a 1 percent increase.

In total, Oakland County also had the largest equalized property values in 2016 at $65,084,851,114 (more than $130 billion in actual value); residential values made up $49,933,653,218 (more than $100 billion in actual value) of that. The City of Troy in Oakland County had the highest total residential equalized property value in the county at about $3.8 billion (about $7.6 billion in actual value). This value was higher than Detroit’s total equalized residential property value of $2.5 billion ($5 billion in actual value). Wayne County’s total property value was $44,884,066,562; residential equalized property values made up $29,476,949,702 of that. The community in Wayne County with the highest total residential equalized property value was Grosse Ile with about a $3.3 billion total ($6.6 billion in actual value). In Macomb County the total equalized property value for the county in 2016 was $30,605,374,212 ($61.2 billion in actual value), with residential equalized property values making up $22,477,768,361 of that ($44.8 billion in actual value). Sterling Heights in Macomb County was the municipality in that county with the largest total residential equalized property value at about $3.5 billion ($7 billion in actual value). In Washtenaw County, where the total residential equalized property value was $13,045,788,080 ($26 billion in actual value), Ann Arbor had the highest total equalized residential property value, in the county and the region, at about $4.25 billion ($8.5 billion in actual value).

The map below shows that the municipalities with the highest total equalized values are mainly located in the Metro-Detroit area where home values and median incomes are traditionally higher. There are exceptions though, such as Detroit, where the median income and household value are below communities like Grosse Ile, Troy and Sterling Heights. However, Detroit is geographically the largest municipality in the state at about 139 square miles. The communities in the region with the lowest total equalized residential property values for 2016 are the rural communities, with larger amounts of agricultural land, located on the edge of the region in St. Clair, Livingston, Monroe and Washtenaw communities. In St. Clair and Monroe counties there was not one municipality where the total equalized residential property value was above $1 billion ($2 billion in actual value), while in Oakland County majority of the communities had total residential property values at or above that threshold.

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Southeastern Michigan Economy Gaining Strength

  • The unemployment rate across the state remained stagnant while the rate in the city of Detroit decreased (monthly);
  • The number of employed Detroit residents increased, (monthly);
  • The Purchasing Manager’s Index for Southeastern Michigan remains strong, especially after increasing 7 points (monthly);
  • The Commodity Price Index remained the same (monthly);
  • The Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area shows home prices continue to increase monthly and annually.

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According to the most recent data provided by the Michigan Department of Technology, Management and Budget, the unemployment rate for the State of Michigan slightly increased to 4.7 in October of 2016 from 4.6 the previous month. However, unemployment in the City of Detroit decreased to 11.1 in September, from 12.4 the previous month. The September unemployment rate in 2016 was 0.4 points lower than it was in September of 2015.

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In September of 2016 the number of employed Detroit residents rose to 221,238, an increase of 2,314 from August. Between September of 2016 and September of 2015 there was a total increase of 10,012 employed Detroit residents, according to the Michigan Department of Technology, Management and Budget.

While the number of employed Detroit residents increased between August and September the labor force decreased by 1,067. In August the labor force was reported to be 250,047 and in September it was reported to be 248,971.

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The Purchasing Manger’s Index (PMI) is a composite index derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 indicates the economy is expanding.

According to the most recent data released on Southeast Michigan’s Manager’s Index, the PMI for October 2016 was 67.2, an increase of 7 points from the prior month. The October 2016 PMI was an increase of 8.4 from the previous year.  With this increase, the PMI is considered to be strong, particularly because it has remained above 50 since June of 2014. Much of this growth, according to the Institute of Supply Management of Southeastern Michigan, is due to the resurgence of the auto sector in the region.

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The October 2016 Commodity Price Index decreased 0.2 points from September but increased 3.2 points from the prior year. The three month average for the Commodity Price Index was 48, which the Institute of Supply Management of Southeastern Michigan states is good for short-term profits.

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The above charts show the Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area. The index includes the price for homes that have sold but does not include the price of new home construction, condos, or homes that have been remodeled.

According to the index, the average price of single-family dwellings sold in Metro Detroit was $109,660 in August 2016. This was an increase from $103,750 from August of 2015 and an increase from $98,720 from August of 2014.

Discrepancies Exist Between Detroit Demolitions and Vacancy Rates

Since January 1, 2014 the City of Detroit reports on its Demolition Program webpage that there have been 10,667 demolitions of vacant buildings as part of its blight removal program, as shown in the maps below. These demolitions were made possible through the Detroit Demolition Program, which receives federal funding to aid in the removal of blight. Just last week it was announced the U.S. Department of Treasury released an additional $42 million in funds to support the program. However, that funding, and the program, was suspended from August through just a few weeks ago while the U.S. Department of Treasury and the Michigan State Housing and Development Authority worked to create new guidelines for the demolition program. These guidelines create greater oversight by limiting the number of houses in a bid package, requiring more transparency in what subcontractors are used and having state employees working in the Detroit Land Bank and Building Authority offices, according to the Detroit News.

According to the City of Detroit’s demolition project page, there are 2,459 structures in the demolition pipeline, meaning they are scheduled to be demolished in the near future, and 3,096 that have already been demolished in 2016. The first two maps below show the 10,667 demolitions that have occurred in the City, by Census Tract, since January 1, 2014. The data used to create those two maps was provided from the City of Detroit’s Open Data Portal.

The third map shows vacancies in the City of Detroit, as reported by the U.S. Postal Service.

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The first two maps above illustrate how certain areas of the City experience much lower rates of demolition than others. The third map shows what the vacancy rates were in the City of Detroit as of June 2016. In comparing the first two maps with the third we are able to identify discrepancies there are between where demolitions are occurring and where vacancy rates are the highest.

When examining the first two maps we see on the City’s northwest side (in the Evergreen/Rosedale area), within one Census Tract there were 295 demolitions between January 1, 2014 and October 13, 2016. The third map shows that as of June 2016 there was a 35.9 percent vacancy rate in that Census Tract, according to the U.S. Postal Service. There was only one other Census Tract in the City that had more than 200 demolitions. This Census Tract was located in the Cody/Rouge area on the west side of the City. This Census Tract had a vacancy rate of 37.5 percent in June of 2016, according to the U.S. Postal Service.

The Census Tract with the highest vacancy rate in June of 2016 is just east of Groesbeck Avenue (M-97); it had a vacancy rate of 50.3. However, according to the demolition data there have only been 15 demolitions in that Census Tract since January 1, 2014. Overall, this pocket of the City (northeastern area of the City along M-97) had vacancy rates ranging between 38 and 51 percent while the number of demolitions per Census Tract, in general, ranged between 15 and 54. There were exceptions, such as the two neighboring Census Tracts just east of I-94 where the vacancy rates were 33.6 percent and 31.6 percent and the number of demolitions in both areas were among the highest in the City, 147 and 145 respectively.

Areas in the City with among the lowest vacancy and demolition rates are Midtown, Downtown and Corktown. Also, Midtown and Downtown have some of the City’s newest housing units. Other areas in the City with the lowest demolition numbers are located on and around the Woodward Corridor, both north and south of Highland Park. The Palmer Park area, and the neighborhood to the west had several Census Tract where there were less than 10 demolitions in the time frame mapped. This area, in general, also had lower residential vacancy rates in June of 2016, ranging between 6 and 15 percent by Census Tract.

Near the Woodward Corridor though there are three Census Tracts, all of which border Highland Park, that had between 121-200 demolitions with vacancy rates for those three Census Tracts ranging between 20 and 35.

While a great deal of blight removal has already occurred in the City, there is still plenty of work to do. According to the City’s website, the goal is to remove 40,000 blighted properties within an eight year time frame. This post shows certain areas where there have been high rates of demolition in areas with high vacancy rates. However, this post also shows the opposite-Census Tracts with high vacancy rates and low demolition numbers. As the City moves forward with reaching is 40,000 structure demolition goal vacancy rates should continuously be monitored to help determine demolition priorities.