When former basketball star Dave Bing took over as mayor of Detroit in 2009, he thought he could tackle the city’s massive economic and financial problems, in part by shrinking or consolidating much of the sprawling Motor City and even converting abandoned and blighted real estate to farmland.
The mayor’s hopes and plans seem incredibly naïve today, as a report on Monday showed Detroit’s financial picture is even bleaker than earlier portrayals. Kevyn D. Orr, the emergency manager appointed by Michigan Gov. Rick Snyder, described long-term obligations of at least $15 billion, unsustainable cash flow shortages and credit ratings so incredibly low Detroit may have trouble continuing to borrow.
This once-proud city – the “arsenal of democracy” during World War II and the car capital of the world – has languished for decades. Hundreds of thousands of manufacturing jobs were lost to other states and other countries; a once-vibrant population of 1.85 million in the 1950s dwindled to a mere 700,000 by last year; and riots and freeway construction over the past four decades rendered huge swaths of the city a moonscape of abandoned and burned out houses and garbage-strewn vacant lots.
The city’s economic outlook only weakened during the Great Recession and a seemingly relentless series of political scandals and government spending outrages. And even with the recent recovery of the auto industry and economic revival downtown and along the riverfront, the city continues to face difficult economic conditions. That includes a nearly 10 percent unemployment rate, a significant reduction in state revenue sharing, and decreases in income and property taxes.
Foreclosure inventory continued to shrink in April, with the number of homes in some stage of the foreclosure process down 24 percent year-over-year, according to data from CoreLogic.
About 1.1 million homes sat in foreclosure inventory in April compared to 1.5 million properties a year ago, CoreLogic reported. Foreclosure inventory also dipped month-over-month, falling 2 percent from March to April.
At the same time, the overall share of mortgaged homes in foreclosure inventory declined to 2.8 percent in April from 3.5 percent in March.
Has housing turned the corner? Look again.
Sales up, prices up, what’s wrong with this picture?
The last time both prices and sales of new homes increased in the same month was last September. In October, both sales and prices dropped, but in November, January, and March, sales increased when prices dropped and in December and February when prices rose, sales fell.
The pattern, with a couple of exceptions, shows up as well in a review of existing-home sales: sales up and prices down in October and January, while sales fell when prices rose in December and March. In all of 2012, sales and prices moved in opposite directions in seven of the 12 months.
Last month the median price for new homes hit a record high and home sales soared, boosting the new-home sector’s recovery, according to figures released from the U.S. Census Bureau Thursday. The median price of a new home sold in April was $271,600, which was 8.3 percent higher than the previous month and 13.1 percent higher than one year ago, the Census Bureau reported.
“While the cost of constructing homes is rising due to tightened supplies of materials, lots, and labor, to some extent, this may be creating greater urgency among potential buyers,” says Rick Judson, chairman of the National Association of Home Builders.
New-home sales in April also soared to their second highest level since the summer of 2008, rising 2.3 percent. Sales are 29 percent higher than year-ago levels. Still, the pace of new-home sales in April of 454,000 is still a far cry from the 700,000 level that most economists consider healthy for the sector.
“Today's report is further evidence of the gradual, consistent improvement we have been seeing in housing market conditions over the past year," says NAHB Senior Economist Robert Denk. "We're now about half-way back to what could be considered a full recovery, and we do expect to see continual, solid gains in both starts and sales of new homes going forward."
Regionally, new-home sales in April rose by the most in the West—10.8 percent—and 3 percent in the South. Meanwhile, new-home sales dropped in April by 16.7 percent in the Northeast and 4.8 percent in the Midwest.
Source:“New Home Sales Up 2.3% in April as Median Price Hits Record High,” The Associated Press (May 23, 2013)
California Hotel Corporation through its subsidiary Met Hotel Partners LLC, will be expanding the operation at the 200 Room Met Troy Hotel in line with the economic improvements in the Michigan Market.
New California Hotels Corporation after meeting with the city on several occasions will be modifying the 17 acre site to gain advantage of the upswing in the Michigan economy, specifically in the Detroit area. The Company owns other assets in Michigan.
"We are excited about the recent upswing in the Detroit area economy. Our aim is to maximize the opportunities on this 17 acre site as we've always considered it as having immense potential ... says Remo Polselli , CEO of New California Hotels Corporation. "We know what the city needs in this area, more retail, dynamic tenants, and a fine dining restaurant and amphitheater that can make this site a real model of development for the citizens of Troy."
Detroit Capitol Park, site of Michigan’s first Capitol building and more recently where people wait for the bus, is a major front in the block-by-block battle to gentrify downtown.
Investments likely to top $100 million, including taxpayer money, are beginning to be poured into this small triangular patch tucked between Woodward Avenue and Washington Boulevard. Bounded by Shelby, Griswold and State streets, the area is ragged, but big change is on the way.
On Wednesday, the state approved a $6 million loan forthe former United Way building, one of three historic buildings targeted in an $85 million redevelopment plan. Another building, an Albert Kahn-designed gem, was sold earlier this year, with the new owners moving to boot low-income seniors out of their homes to make way for upscale residents. Another Capitol Park building is under contract for sale, and the College for Creative Studies and Cranbrook Academy of Artare exploring ways to create a permanent presence for international and local artists.
“Capitol Park is envisioned to be the center of a new arts district with galleries and cafes on the ground floors and residential apartments above,” according to “A Placemaking Vision for Downtown Detroit,” the big plan unveiled recently by Quicken Loans Inc., founder Dan Gilbert and other downtown leaders to dramatically overhaul the city’s central business district.
The effort includes short-term plans that start in June with pop-up retail and street events to boost pedestrian traffic. Long-range plans forecast whattypes of business and activities should fill the many empty buildings plaguing downtown. Capitol Park is no exception.
As home values improve and servicers continue to ramp up efforts to reduce delinquent pipelines through short sales and loan modifications, the composition of RMBS loan pools outstanding should also improve, according to Moody’s most recent ResiLandscape.
According to analysts from Moody’s, rising home prices motivate current borrowers to avoid default, and they increase the proportion of current loans with loan-to-value (LTV)ratios below 100, which are the loans that are the least likely to go incur losses.
The higher share of current loans with lower LTVs should then prevent new defaults for 2005-2008 RMBS pools, according to Moody’s.
DETROIT, May 19 (Reuters) - Bond restructurings, negotiated settlements with bondholders and bond insurers, and tough talk with unionized workers are on the agenda as Detroit's emergency financial manager tries to meet a self-imposed, six-week deadline to decide whether the city can get through its financial crisis without a bankruptcy filing.
Kevyn Orr, a former bankruptcy lawyer, in his first report to the state of Michigan since Governor Rick Snyder appointed him, laid out last week a bracing picture of steps he may need to take to address the city's troubles.
As he has gone about his work, though, with unions, bond insurance firms and others, Orr so far has communicated little about how they will be affected.
Orr's spokesman, Bill Nowling, said the emergency manager expects to decide soon whether talks with the affected parties will get the job done. "It's safe to say we will have a good idea of whether we can reach an out-of-court restructuring with our bondholders, pensioners, retirees and city employees within six weeks," Nowling said.
"This is not going to be a prolonged process. We are in a financial crisis."
The Detroit story has taken on outsized importance. Once a symbol of U.S. industrial might, the city now represents something different altogether: a case study of the struggles many U.S. cities and states are enduring as they grapple with crippling debt and untenable obligations to public workers.
And as Orr begins initial talks with Detroit's employees and creditors, the process raises worrisome parallels with historic precedents close to home. Five years ago, the leaders of General Motors and Chrysler were undertaking similar preliminary steps with their creditors and workers, only to find that negotiations and concessions were not enough to avoid bankruptcy. Orr represented Chrysler during its restructuring.
Meijer is looking for a few good employees — make that about 400 new employees — for its soon-to-open Detroit store near 8 Mile and Woodward.
The Grand Rapids-based retailer said Monday it is seeking to fill positions in all departments from clerks and cake decorators to utility workers, meat cutters and others.
Meijer said job hopefuls should begin the hiring process by searching for available positions at the website www.meijer.com/careers.
Once at the site, interested candidates should click on hourly professionals, search hourly opportunities, and enter 268 in the keyword search box to see available positions.