Q HOUSING FINANCE POLICY CENTER Detroit Housing Tracker Bing Bai, Laurie Goodman, Karan Kaul, Maia Woluchem, and Alyssa Webb ABOUT THE DETROIT HOUSING TRACKER The Detroit housing market faces numerous challenges as the city charts a path toward less blight, increased housing preservation, and a better functioning residential mortgage market. Drawing from a wide range of data and sources, the Detroit Housing Tracker monitors the latest development in the Detroit housing and community development arena. Updated quarterly, this publication has two sections. Detroit News tracks housing and business news and key mortgage programs. Detroit Housing Market Trends presents comprehensive market indicators including sales prices and volumes, rental prices, household equity level, delinquencies and foreclosures, and general labor market conditions. We welcome feedback on how to make the Detroit Housing Tracker more useful. Pleaseany comments or questions to INSIDE THIS ISSUE Sales prices across the city continued to grow in Q3 2015, led by the Woodward Corridor and East Riverside areas (page 14) As both the number and share of loans underwater continued to decline, the average household equity for all Detroit loans reached 29 percent in Q (page 15) The shares of loans in serious delinquency, foreclosure, or REO in Detroit are on pace to fall below pre-crisis levels (pages 16 and 17) About 8,570 single-family homes were sold in Detroit in the first three quarters of 2015, down 22 percent from the same period a year ago (page 18) The steadily slow growth of rent continues with median rent at around $759 a month in September 2015 (page 18) Despite slow growth since 2009, Detroit still lagged behind in mortgage market recovery with only 490 purchase mortgages and 21 home improvement loans made in 2014 (page 20). CONTENTS Detroit News Key Detroit-Focused Lending Programs4 Detroit Housing Market News6 Detroit Business News10 Other Related Links 12 Detroit Housing Market Trends Zip CodeDefined Districts13 Sale Prices14 Equity and Underwater Loans15 Serious Delinquency Rates16 Foreclosures and REOs17 Sales and Rents18 Unemployment and Labor Force19 Special Feature: Home Mortgage Disclosure Act Mortgage Originations by Type 20 Purchase Mortgage Originations 21 Acknowledgments22 3 Key Detroit-Focused Lending Programs 4 ProgramSummaryFeaturesMore Information Detroit 0% Home Repair Loans Program 0% interest loans from $5,000 to $25,000 to help homeowners repair their homes; joint effort of the City of Detroit, Detroit Local Initiatives Support Corporation (LISC), and Bank of America Homeowners must own and occupy their home for at least six months before applying Minimum 560 FICO; free credit counseling to improve credit score Insurance and taxes must be currentDetroit Neighborhood Initiative Combines a zero down payment, low-interest fixed-rate mortgage, and other favorable terms with rehabilitation dollars needed to rebuild Detroits classic houses and neighborhoods A cooperative effort of NACA, Bank of America, and the Opportunity Resource Fund; announced April oit-neighborhood-initiative/ Entrepreneurs of Color Fund $6.5 million lending program for businesses owned by people of color and that primarily hire people of color; goal is to provide support for Detroit small businesses that lack access to traditional forms of credit Established September 2015 Supported by the Detroit Development Fund, the JPMorgan Chase Foundation, and the W.K. Kellogg Foundation https://www.jpmorganchase.com/ corporate/news/stories/entrepren eurs-of-color-fund.htm FirstMerit Bank Down Payment Assistance Program Offers grants of up to $30,000 to homebuyers for down payment, closing costs, and rehabilitation assistance in Wayne County neighborhoods Down payment assistance loan forgiven after five years Owner must occupy home as a primary residence Mandatory financial literacy courseContent/files/financing/auctions_fi nancing_firstmerit_2015_09_28.p ng Flagstar Bank City Employee Loan Program Announced in June 2015 and available only for Detroit City employees. Highlights include up to 300% loan-to-value ratio allowed; renovation funding included; fifteen-year fixed-rate mortgage; and loans held by Flagstar 620 minimum FICO Max loan amount $417,000 Prepurchase counseling required Taxes and insurance must be escrowedicleID/318/New-Mortgage- Program-Aims-to-Boost- Employee-Residency-in-Detroit- Increase-Wave-of-Home- Renovation-Projects Liberty Bank Detroit Home Restoration Program Provides affordable loans to Detroit residents who successfully bid in the Neighbors Wanted auction. First six months interest-only payments (rehabilitation phase) Down payment assistance available for those earning below 120% of area median income (AMI) Mandatory housing counselingnity/detroit.cfm Key Detroit-Focused Lending Programs 5 ProgramSummaryFeaturesMore Information Talmer Bank & Trust Conditional Grant Offers $25,000 in a forgivable grant to assist auction winners of the Detroit Land Bank Authority with home repair costs for homes in Marygrove neighborhood Burns off at a rate of 20 percent a year Owner must occupy home as a primary residence Funds cannot be used for home purchaseFinancing Wells Fargo HomeLIFT down payment assistance program Provides forgivable down payment assistance for primary, owner- occupied residences within select city limits in Wayne County $15,000 assistance forgivable 20% each year for five years Administered through NeighborWorks America and its affiliates Household income cannot exceed 120% of AMI Counseling required https://www.wfhmconsumerevent s.com/aspx/Events/Brochure.asp x?t=1&EventID=10256 https://www.wfhmconsumerevent s.com/UserDocs/events/ DET_DPA_and_Income_Limits_E S.pdf Detroit Housing Market News Housing Market Rebound (Crains Detroit Business, 12/27/2015)Unseasonably warm weather makes for a long building season. Sales of existing homes also are brisk, with the backlog of foreclosed properties nearly gone. Sales prices continued to inch up this past year; in the four-county region, median sale prices climbed from $139,000 in November 2014 to $146,000 in November 2015, according to Realcomp II Ltd. The increase was the sharpest in Wayne County, where median sale prices rose 17.6 percent, from $85,000 to $100,000. Macomb County's prices increased 4.8 percent, from $125,000 to $131,000. Livingston increased 4 percent, from $200,000 to $208,000, and Oakland rose 3.9 percent, from $185,000 to $192,250. Underwater On Your Mortgage? This Program Could Help (Detroit Free Press, 12/21/2015)mortgage/ / Homeowners who owe more on their house than it is worth have until the end of 2016 to act under the Home Affordable Refinance Program, or HARP. More than half of eligible Michigan homeowners live in metro Detroit, according to the Federal Housing Finance Agency's data as of June Under HARP, borrowers can refinance without an appraisal in many cases and regardless of how far their homes have fallen in value. Mortgage rates are expected to nudge up further next year, especially if the Fed raises rates three times more as expected in "Sooner is better than later," said Don Bleuenstein, national sales director for Troy-based Flagstar Bank. "While rates aren't at record lows, they are still very much at historic rates." Congress Passes Detroit-Led Demolition Measure and More (Detroit Free Press, 12/18/2015)On December 18th, 2015, Congress passed a $1.1-trillion spending bill that keeps government open through the next fiscal year and allows up to $2 billion to be put in a fund to prop up demolition efforts in Detroit and other cities in Michigan and across the nation. The spending bill, which passed the House, , and the Senate, 65-33, now goes to Obama for his signature. Detroit-Led Blight Fight May Spur Demolitions Across U.S. (Detroit Free Press, 12/18/2015)us/ // A Michigan-led effort to get $2 billion more put into a federal neighborhood stabilization fund could touch off one of the biggest initiatives to demolish abandoned, derelict buildings in older urban centers ever seen, with cities across the MidwestDetroit first and foremost among themstanding to benefit. Congress is poised this week to pass a sweeping spending bill that includes what had been a little- noticed item to move $2 billion in unspent mortgage relief money into the U.S. Treasurys Hardest Hit Fund, which in recent years has become a major source of funding for blight removal efforts, especially those in Michigan, Ohio and Indiana. 6 Detroit Housing Market News Home Sales Drop in November while Median Prices Continue to Rise (Crains Detroit Business, 12/10/2015)continue-to-rise Metro Detroit home and condominium sales slowed in November, dropping 4.2 percent year-over-year, according to new report released Thursday. But median home and condo sale prices continued their positive upward swing, rising by 5 percent last month from November 2014 figures. In the four-county region, median sale prices climbed from $139,000 in November 2014 to $146,000 last month, according to Realcomp. The increase was the sharpest in Wayne County, where median sale prices rose 17.6 percent from $85,000 to $100,000. Macomb Countys increased 4.8 percent ($125,000 to $131,000), while Livingston increased 4 percent from $200,000 to $208,000 and Oakland rose 3.9 percent from $185,000 to $192,250. Detroit Invests in Delray with Major Blight Removal (detroitmi.gov, 11/24/2015)One of Detroits proudest but most challenged neighborhoods is undergoing a massive blight removal blitz as part of a commitment from the City of Detroit, Mayor Mike Duggan and Council Member Raquel Castaeda-Lpez announced November 24th. In all, thirty-three homes in the west end of the Delray community have been targeted for demolition. Work already is underway. The city also will be removing a significant amount of non-structural blight, including overgrown brush and scrub trees on existing vacant land. The Delray project is being paid for with $750,000 the City Council allotted to the community from proceed received from the State of Michigan as part of its land acquisition for the planned Gordie Howe International Bridge Project. While a portion of Delray will be acquired by the State for its bridge project, the City chose to reinvest this money into the area of Delray that will remain. Trust to Invest up to $30M in Detroit Home Rehab (Detroit News, 11/23/2015)DetroitThe AFL-CIO Housing Investment Trust announced it will invest up to $30 million into a home repair program that will kick off with a pilot program in four city neighborhoods. The effort is a partnership between civic and community organizations to rehabilitate up to 300 blighted single-family homes and properties. Mayor Mike Duggan said the administration is asking Detroits City Council to transfer 25 properties to the trust for the initial block of homes. The trust, he said, will be responsible for rehabbing and selling the properties located within the citys Bagley, Shultz, Crary/St. Marys and East English Village neighborhoods. Study: Taxes Hinder Detroit Comeback (Detroit News, 11/10/2015)A new report finds Detroit still is plagued by a broken property tax system, with owners paying too much and businesses given tax breaks that dont help the city. The researchers recommend property tax reductions of up to 70 percent in some areas, according to the report released by the Lincoln Institute of Land Policy. Among the reports recommendation is implementing a land-based tax. That is based on the value or size of a piece of land, with no additional tax for new development or improvements. 7 Detroit Housing Market News Housing Deals Boost Midtown's Revival in Detroit (Detroit Free Press, 11/2/2015)Five years after the launch of an incentive program to encourage people to move into areas in and around Detroit's Midtown, organizers of the effort say it has been a success at bringing a diverse mix of people into the neighborhoodso much that the incentives will likely keep going even after the pilot project comes to an end. To date, its credited with bringing nearly 1,000 new residents to Midtown, part of a rush to an area that has raised rents and encouraged new developments, according to new data from Midtown Detroit Inc., the development agency that manages the program. $3.7M Extra Paid in Detroit's Blight Fight (Detroit Free Press, 11/1/2015)A controversial deal between Detroits land bank and several large contractors designed to speed up demolitions at a set price instead ended up costing the city at least $3.7 million more than expected, according to records reviewed by the Free Press. The higher costs meant fewer blighted eyesores would be torn down with the $20 million spent on contracts with three demolition companies. Detroit to Get $21 Million More for Blight Demolition (Detroit Free Press, 10/28/2015)The City of Detroit stands to receive an additional $21.25 million in demolition money from the federal government under a proposal authorized by the Obama administration. The money will be enough to take down nearly 1,300 blighted structures if recent averages hold. $65 Million Orleans Landing Development Breaks GroundTransformative Project Marks a First on Detroits Riverfront in 25 Years (detroitmi.gov, 10/23/2015)Ground%E2%80%94Transformative-Project-Marks-a-First-on-Detroit%E2%80%99s-Riverfront-in-25-Years The $65 million Orleans Landing celebrated the start of construction with a groundbreaking ceremony on October 23rd on the future site of the nearly eight-acre development and the first market-rate residential new neighborhood construction project on Detroits east riverfront in 25 years. Detroit Mayor Mike Duggan and Partners of Rivertown Phase I, LLC were joined by business and community leaders who made the public-private partnership possible and the transformative project a reality. Orleans Landing will bring a new neighborhood and mixed-use community to the riverfront with 278 apartments and 10,500 square-feet of retail space. The residential plans include one- and two-bedroom homes, flats, hybrid retail/lofts, and 30 townhouses with garages, all sustainably built to Enterprise Green Community criteria standards. Affordable housing rates will be offered on 20 percent of the available residential units. Construction is projected to be completed April Detroit Land Bank Program Boosts Vacant Lot Sales (Crains Detroit Business, 10/19/2015)Property owners can buy adjoining vacant lots online with a credit card at buildingdetroit.org. Buyers enter their home address into the system and the vacant lot next door will pop up. We try to make it simple, Fahle said. In addition to credit cards, lots can be purchased with a cashiers check or money order, but not cash, at the DLBA office downtown and at special side-lot sales the land bank hosts in individual city districts. 2,571 vacant lots have been sold in the city since the program started in June Detroit Housing Market News J.P. Morgan Chase Teams to Help Detroit Nonprofits Launch New Programs (Crains Detroit Business, 10/8/2015)launch-new-programs The third cohort of J.P. Morgan Chases Detroit Service Corps, made up of 12 managers from all of the banks lines of business, will start helping four area nonprofits with a variety of projects on October 12 th.Detroit Service Corps Three Chase managers will be assigned to each nonprofit for three weeks. They include employees from Australia, India and England. The Chase teams will help: Eastern Market create a community-based organization that will develop mixed-use projects, including housing and commercial space to incubate food businesses and develop a food processing and distribution facility in the market district. EcoWorks develop a retail and wholesale sales plan for reclaimed materials, which will include creating jobs and apprenticeship and training programs. Greening of Detroit create a workforce development program to teach landscaping skills to Detroiters with extreme barriers to employment. TechTown, the business incubator affiliated with Wayne State University, develop a program to help the nonprofits professional services program connect brick-and-mortar businesses in Detroits neighborhoods with technical assistance. Chase has committed to sending two teams per year to Detroit through Blight Blitz Builds up Detroit Property Values (Detroit News, 10/7/2015)Home property values in Detroit are beginning to increase in areas where blight has been removed, according to a new report. But the development comes at time when money for demolition is drying up. The 36-page report, commissioned by Rock Ventures and the Skillman Foundation and released October 6th, found demolitions have increased the value of surrounding homes within 500 feet by 4.2 percent, or an average of $1,106. Citywide, that amounts to an increase in home values of more than $209 million. The report also suggests that combined with other efforts by the city that include code enforcement and sales of public assets such as side lots, the value of homes nearby increased by 13.8 percent, or an average of $3,634. Citywide, that amounts to an increased property value of about $410 million. New Detroit Field Guide Released to Help Residents With Vacant Lots (Next City, 10/5/2015) https://nextcity.org/daily/entry/detroit-new-field-guide-released-vacant-land-problem After decades of population loss, many of Detroits neighborhoods are faced with an overabundance of vacant lots where houses once stood. Even the citys healthiest, densest areas arent immune. Over 23.4 square miles of the city 16.8 percent of Detroits total area is vacant land. The problems associated with vacant lots stem from a lack of stewardship. While the city has made efforts to encourage residents to become stewards of vacant land over the years, most notably through an initiative that sells side lots for just $200 to adjacent homeowners, few tools have been in place to help those buyers care for lots in a sustainable way. But today, Detroit Future City released Working With Lots: A Field Guide, one of the first aids for residents and community groups that are caring for and beautifying lots in their neighborhoods, transforming them from liabilities into assets. 9 Detroit Business News DEGC Accepting Applications for Event to Match Small Businesses with Major Buyers (Crains Detroit Business, 12/21/2015)small-businesses-with Starting today, the Detroit Economic Growth Corp. is taking applications from small Detroit businesses to meet with representatives from Quicken Loans, Blue Cross Blue Shield of Michigan, Wayne State University and 13 other anchor institutions in the city. Up to 200 companies may be chosen to meet. They will be scheduled during DEGCs second annual D2D Matchmaking Opportunity event, Feb. 11. D2D, a DEGC program, aims to connect Detroit businesses by linking local buyers and suppliers. Kresge Approves $2.2 Million in Grants Aimed at Detroit Revitalization (Crains Detroit Business, 12/4/2015)detroit-revitalization A $550,000 grant from the Kresge Foundation will fund among other things, creation of a community development corporation to spur development of the Eastern Market district and surrounding neighborhoods. The grant, which will go to Eastern Market Corp. over the next three years, will also support operations, Kresge said in a release. The funding is one of 10 grants approved as part of $2.2 million in Detroit revitalization grants approved by the Troy-based foundations board. Detroit Chamber Unveils Support Group for Middle Market Businesses (Crains Detroit Business, 11/19/2015)market-businesses The Detroit Regional Chamber unveiled an organization Thursday that will try to boost metro Detroit's middle market businesses, a potential growth segment in the region. The Middle Market Council, a partnership between the chamber and the National Center for the Middle Market, is set up to grow companies that make up 30 percent of employment in Southeast Michigan. New GSA Initiative in Detroit Kicks Off with $74.9 Million Investment (Crains Detroit Business, 11/16/2015)million-investment The U.S. General Services Administration launched an "Economic Catalyst Initiative" in Detroit on Monday with a plan to spend nearly $75 million to renovate an office building and consolidate federal workers in it. The goal of GSA's initiative is to better align the federal agencys building, leasing and relocation plans with the economic development goals of local communities. The first Detroit project will be at 985 Michigan Ave., which it purchased in July 2014 for $1. GSA plans to invest $74.9 million for renovations and consolidate federal agencies currently leasing in 40 locations across Detroit there. $2.5M Knight Foundation Grant to Boost Detroit Business (Detroit News, 10/21/2015)business/ / The Knight Foundation is pumping $2.5 million into the Detroit business economy with a grant to the Detroit Development Fund. The grant will support early stage retail and creative businesses in the city and advance the funds mission of revitalizing economically distressed areas in Detroit. It will also have a focus on minority and female entrepreneurs, officials said. 10 Detroit Business News Sakthi Automotive Breaks Ground on $30M Detroit Facility (detroitmi.gov, 10/19/2015)Sakthi Automotive Group broke ground October 19th on a new $30 million, 181,000-square-foot facility as it continues to expand its operations in southwest Detroit. The new Detroit casting and machining facility will create 350 new jobs, including some for returning citizens. It is part of a larger campus, which is to include the redevelopment of Southwestern High School and the former American Mailers Building. Sakthi already employs 226 people at its existing facility next door to the planned new campus. Is Detroit Really Rebounding? (Citylab, 10/8/2015)The Pew Charitable Trusts just released a report on how things stand in Detroit nearly one year after the city exited its unprecedented bankruptcy. Things are looking up, Pew reports. Still, its not entirely fair to describe the changes in Detroit as a rebound. That suggests that, with enough time, given present conditions, things will actually turn around. For some Detroiters, thats right. For the poorest and most vulnerable residents, however, its not clear that their situation is improving. There are some aspects of Detroit that could fairly be described as worsening. The scale and severity of the vacancy crisis in Detroit make forward progress extremely difficult under any circumstances. Duggan Lauds Bus Service, Technology at Homecoming (Detroit News, 10/1/2015)During the annual Detroit homecoming, Mayor Mike Duggan lauded Detroits improved bus service and federal dollars that enabled Detroit to purchase 80 new buses. There are 192 buses currently running. They need 188 to make a full schedule. Last year, theyd had 164, Duggan said. Duggan also told attendees about his administrations nuisance abatement program, home rehabilitation partnership programs, demolition and other efforts to revitalize Detroits housing stock. Another key focus of his talk was the progress of demolition on defunct homes in the city. Historically, Duggan noted, the city was knocking down houses in a mindless pattern. Duggan says that nearly 7,000 blighted houses have come down under his reign. The city is demolishing the homes at a rate of 100 to 140 per week. Hello Detroit: Amazon Introduces Corporate Office in the D (detroitmi.gov, September 9, 2015)On September 9th, Amazon announced the unveiling of its corporate office in Detroit. Amazon has hundreds of employees across the state of Michigan and is in the process of building the downtown Detroit office into a growing technology hub. Amazons presence in Michigan will be increasing with the expansion of the Detroit office space in early 2016 and addition of more full time technology-focused jobs. To introduce Amazon into the Detroit community, Amazon is donating $10,000 and 30 Amazon Fire tablets to the Carver STEM Academy program in the Detroit Public Schools. The Carver STEM Academy offers students in pre-kindergarten through eighth grade a curriculum rich in science, technology, engineering, the arts and mathematics. We have a long-term plan to grow our presence in the great state of Michigan, and bring more full-time, high-tech jobs to the city of Detroit, said Peter Faricy, vice president for Amazon Marketplace. We have are focused on hiring in the state and look forward to being a part of the community, professionally and personally. Michigan is a rapidly growing technology corridor and were eager to bring the incredible local Detroit talent to Amazon. 11 Other Related Links 12 Bedrock Real Estate Services:Building Detroit:Crains Detroit Business:Detroit & JPMorgan Chase:Responsibility/detroit.htmhttp://www.jpmorganchase.com/corporate/Corporate- Responsibility/detroit.htm Detroit Dashboard (City of Detroit):Detroit Economic Growth Corporation:Detroit Engagement Timeline:Detroit Fast Facts:Detroit-Fast-Facts.pdfhttp://www.quickenloans.com/press-room/wp-content/uploads/2015/09/ Detroit-Fast-Facts.pdf Detroit Future City:Opportunity Detroit on Twitter: https://twitter.com/OpportunityDEThttps://twitter.com/OpportunityDET What Bloggers Love About Detroit!: https://storify.com/BedrockRES/http-www-wethekingsmusic-comhttps://storify.com/BedrockRES/http-www-wethekingsmusic-com Zillow Housing Roadmap to 2016: 13 Zip CodeDefined Districts Debt, household mortgages, $9,833 Detroit Westside Woodward Corridor Northeast Detroit East Riverfront Southwest Detroit Sources: Federal Reserve Bank of Chicago and Mapsof.net. 14 Sale Prices MARKET TRENDS 15 Equity and Underwater Loans MARKET TRENDS Debt, household mortgages, $9,833 16 Serious Delinquency Rates MARKET TRENDS Debt, household mortgages, $9,833 17 Foreclosures and REOs MARKET TRENDS Debt, household mortgages, $9,833 Sales Year Over Year New constructionResaleREO Short saleOther Total sales 2014 Q13 1614,9473,480532,28810, Q13 1374,0832,048482,2548,570 % change YOY -14.9%-17.5%-41.1%-9.4%-1.5%-21.6% 18 Sales and Rents MARKET TRENDS Debt, household mortgages, $9,833 Sources: Urban Institute calculations from CoreLogic data. Note: 2015 numbers are based on Q1Q3 only. 19 Unemployment and Labor Force MARKET TRENDS Debt, household mortgages, $9,833 20 Mortgage Originations by Type SPECIAL FEATURE: HOME MORTGAGE DISCLOSURE ACT Debt, household mortgages, $9,833 21 Purchase Mortgage Originations SPECIAL FEATURE: HOME MORTGAGE DISCLOSURE ACT Debt, household mortgages, $9,833 22 A CKNOWLEDGMENTS This mortgage tracker was funded by JP Morgan Chase. We are grateful to them and to all our funders, who make it possible for Urban to advance its mission. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. Funders do not determine our research findings or the insights and recommendations of our experts. Further information on the Urban Institutes funding principles is available atCopyright January Urban Institute. Permission is granted for reproduction of this file, with attribution to the Urban Institute. 23