Analysis of the Detroit Mich Housing Market As of November 1 1966
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718, I :3,tr ret- 'D"rro;11,1;e);3aM kn:*;,r,;";i-"' IqLL W"ttfr"e ue g ,' 196l, DETROIT, MICHIGAN HOUSING MARKET a as of November 1, 1966 A Report by rhc DEPARTTAENT OF HOUSING AND URBAN DEVETOPMENT 7- ., FEDE RAT HOUSI NG ADMINISTRATION WASH|NGTON, D. C .20111 , Oclo ber 1967 AIIALXSIS OF THE DETRoIT. I'IIOI]rGAN, IIoUSII{G MARKET AS OF 1. 1966 l.leld Market Analysls Service Federul rlouslng Administration Department of Houslng and Urban L,evelopment Foreuord Ar a publlc cenrtce to aralet local houelng actlvltles through clearer underrtendtng of locar. houslng market condlt,ions, lnltleted publrcatlon FIIA of rts comprehenarve houstng market anaryses early ln 1965. l,hlle each reporr re deelgned specrflcar.r.y for FrlA uee ln adnlnlaterlng rtr mortgage lneurance operatl0ns, 1t le expected that the factuar tnforuatlon and the itndtngs concluelone ana of theee report,s wlrl be generalry uaefur arso to bullderrr Dortgagees, end otherc concerned problenr with rocal houslng and to othere havlng an lntereet ln local economlc con- dlttont rnd trende. slnce nerket analyare re not an eract eclence, the judgmentat factor 1r roportent rn the development of frndinge and concluslons. There wltl' be drfferencea of oprnion, of cour6e, rn the rnter- prctatlon of avallabte factual lnformatlon in determtning abeorptlve the capaclty of the market and the requirements for maln- tenEnce of a reaaonabre barance ln denand-eujpty rerationshlps. The facturl'framework for each analyele porrtble is developed as thoroughr.y ae on the bcclr of lnformatlon avall.abLe from both local and nctlonal aourccs. unlerg epcelfrcally icentrfred referance, by source ell osttmctes and Judgmente ln the analysle are those :f !1" authorrng analyet and ihe-rflA Harker Analysls and Research Soc t lon . Table of Contents Paee Summary and Concluslone I Houelng Market Area I Map of the Area 2 F,conomy of the Area Character and Hlatroy 3 Employment 3 Unemployment 7 Eatlmatcd Future Employment 8 lncome 9 Demographlc Factore Populatlon l2 Householda l5 Houelng Market Factors L7 Houslng Supply L7 Resldentlal Bultdlng Acttvlty l8 Tenure of Occupancy 20 Vacancy 2t -- Sales Market 24 RenEal Market 27 Urban RenewaI Actlvity 28 Publlc Houelng 29 Demand for Houelng 30 Submarket Summarlee Detrolt Urban Area 32 t{eBtern l{ayne Count,y 42 Oakland County 51 Macomb County 50 OF TI{E DEIBorr.@tAI{AI,YSIS ant Conclusiors of the Detroit- Housing Market Area (HMn) is aornilaled by The ecororv that supply the automouile rnausiry ana other-duralI9 eoods indrrstries p.rts, etc., t"- trg automobile lndustry. fire rarge increase i""r", stirnulated rapid ln automoutte proauction in the past fivg J,eals has gi"r"U, of nonagricultgral employnent, ntrLch, in turn, has caused nonut-etlon and h;;eho:a eroittft rvltS a reversal in the trend of fr.,n the HMA. Denand for houslng has i:rcreased' as ;;"t-ni;;io" oristi-ng has Ule constgrciion of new houstng aflt t;|e absorpt'ion of housing. Vacancy ievels have declined ard the markets for sjngle-fanily ii"""iie-rrd murti-tanilry' hoy?jry are balancedo A sununa4y of t2,e ;J"ti"d findlnis is out1,lned belor and ie more fu11y detailed in tjhe telrb. employment averaged in 1!66, abgut 259 1 a Nonagricultrrral \r13trZoo percent increase'2@ abone the averag" of Lr272r0(D in 1961., Urt: ?0 ffi;L;I;d;-56"p"r"eni increase jn United States automobile productlon ffffi";;-p6iria. orer the preceding throe vears (1958-1961), decLined sughtly althougfr automobile non.g"f"dtui:af employmen! irt p""ail"Uon j,rcreas'rra Ly about, l0 percen!:-^A 27 percent decline l"i*"Uif" proaroiion Letween 1956 anf 1958 was largeJ;r responsible i;; ; U p"i""rrt decUae- in nonagrlcultural employrcnb during the l*ing the tuo-year forecast perlod, nonagricultural 19g-llSA'period. year, to anroloymmt ls o<pected to irtcrease ty * average of ll+r90o a ilffii;i ilsotlooo in 1e68' persons (3:1 percent' of the work force) C. The average of 56rbOO unenrployed nlne'montfrs oi' fg56 is substantially b.elor tlre recession i;-ur" i#st (10.9 percent) year hlgh, ot zi6rlic.ijlrS.l p""""tti) in 1958 ana r5?r300 ln 1961. family' lncorLe in ttre Detroit mr-{!:r-deducting 3. The current nedian for^renter Federal, incone tax, ts $6rfql for aL1 fmtues and-$6r1_Oo Noverrbeq these after-tax ir"""*r"fas of tso or more persons. ^$5r \998t medlan tncomes should increase to $8r?0o and fi6'55o' respective\r' 4, ThepresentpopulationoftheHl,lAisupproximately/*,]70'0Oc.The ,rnn,.,u1'galn of 62r000 persons since 1960 compr-rres with an ur""lg,, 'the .verage lncrease of 7Lr6O0 a ylar during the L95O-L%O decade' [oirr"r,opul:rtlcn of the H]U\ is expeeted to total 412651000 ln i'lovem- U"" i,)bg. The pr, jected population level sullgests an average annuttl lncrement <tf +7r5UJ perscns over tlle next two years' - tt - 5 There 6re currently l, l93,ooo houeehol.ds in the HMA, an average in- creage of 17,loo a year above the April l95o census total. The num_ ber of houaeholds ehould lncrease by an everage of 13,5OO durlng each of the next th,o years and total l,220,006 rn November t96g, 6 The houslng lnvenEory of the Detrott HMA totals l,z45,ooo unlts, a net addltlon of about 92,8oo unlts, or erght percent, since Aprtl 1960. A total of l4o,o5o unrts (too,ooo srngte-famrly and 39,650 multlfamily) have been completed and 47,3OO unlts have been demollshed slnce Aprtl t960. owner-occupancy has lncreased from 7[ percent of all.occupled unite ln tg50 coiz percenE at presenE. Ttrere are 4,OOO aingle-famlly unite and 5,3OO multlfamily unlts under const,ructlon ln the Ht'lA. The n,mber 7. of available vaeant unlts has declineaby z3)$o since 1960 and ttre net avairable vacanc,y ratio has current net avairable been nearly halvedo The vacaney ratio is 2.o percent, the homeouner vec€urcy r"tlo ts 0.8 percenb, and the o""*iy-i;ti; ratioi indlcate ""nt.i is 5.0 |fl|f;}r;ffise baranced condition" :r, u"tr, segments 8' 0n ttre basle of the anticlpated grortlr reduction in therate of ernploynent and inerease fu the number or rrouseirolds, estimated housing denrand ls at 20r0oo unlts during two years, L2'7oo ,nlts of single-family "."rr--"r-iii"-lg-r.b irnldlng housing lltrsi;; *a-ir:00 r.rnits li ,*utitanily ' The rental aemana estimate-inciua"s 2}@ rrnits in denand at ttre lower rents whictr uiII be lnterest-rate achievabl" ,ait the aid of below-market- flnancrng or asslstance in ilnd acquisition These estinates do not j-rrcrude publi" and cost. accommodationse iorn-rent housjng or rent-supplerrenb The tabre on page 3t summarizes the projected. demand for new singre-farnily aira-rrnrftir*ri-:v ann,a, The qua'litatlve housiag by submarket. dernand for new sirrgre-rami* *u multifan-ily presented at the end of each units ls sununarxr for thl indiuidrral-s,rulrarlcet areas. 9' These demand proJections are designed to maintain the present balanced housing market desplta an ocpected slackening resumptlon of in economic growth; ttre upward trena in the rocai economy wouf.d lncreased housing almarrt. result in ANALISIS OF THE DBtnort, @,t$nrcil AS OF'NOVEMBER ].. 1966 Housing ltlarlart Area Ttre Howlng uarH I'rea (HMA) consldered :n this anal)'sis i8 coterminors rrith ttre DetroLt Standard l{otropoutan Statistical l,rea (SuSa), ntrlch inclrdes We;me, Oakland, and Maconib Cormtjes in Mlchigan. The Hl{A had a populatlcr d nenrJy 3t762tbo0 in 196O. I/ Because of the large geographic area encompassed ia the HMA and becar:se of the divergenb structural conpositlsr and grorttr patterns rnthin varioug parts of the Hl,[A, ttre analpis wil] be prepared in five sectitrls; one deali.ng rrith the over-al-l housing marlet area and more detailed sections pertarning to each of forrr eubmarket areas. The @re area, r*tleh wt11 be terrBd the nDetroit Urban Arean, rrith a 1960 populatton of Lt929 thoct, irrcludes the cltles of Dearbotn, Detroite Grosse Pointe, Grosse Pointe Park, groese Pointe Famse Grnosse Pointe Shoree, Grese Pointe Woods, Harntramcx, Harper Woods, and Highland Part< in Wayne County.. ltte rest of Wq]tne County, termed trWestern t{ayni CounQrn, cutstatutes a submarket area wLth a L9& populatior d 736r9OU. The entlre counties of Oekland ard Maconb, dtr respectt..rrB 1960 populatlcnns of 6901300 and ho5r800, nake up the othen two subrnarket 8f€8so Iocated Ln southeastenn Mlchlgan qt the Detroit Rlver and Lala St. Clair, ntrlch forn the sectlon of ttre St. Lawrence Seaway between Lale Erie ard Lahe Hrnon, Detrolt ts aborrt 3OO ntles northeast of Chlcago, I1l-inofu end 6O nrLles north of Toledo, Ohro. Al1 neans of transportatim are avallab]e and ere cons tdered to be adequatc. The port of Detroit r dttr over 1OO plers, wharves, arrl docks, hardled 33 million tnns of cargo Ln l%St a serar-year hlgh. Ilre Detroit Metropolitan Walme CourQr Airryort is served by mosb donestic airlines and flve internaticnal airlines and handled nearly four milllon passengers in 1965. In additlcrt, nine railroads provide paesenger and freight servie jn the Detrolt 3,r€oo The Interstate Htghway Systan ls continually being orparded in the Hl'lA ard at present, I-9h and I-96 (both east-west) are corrpleted ard ccurstnrctdqr is proceedlng on I-?5 (nortlr-south). fn addition, there are several buslness Bpurs rrlth interstate designatdcns thet provide eccess to dmntorn Detrolto A sizeabLe ln-conmrtaticn of rmrkers fncur nearby labor market areas was nearly off-set by out-corunutetdan to cmtiguous and other nearby countJ-es, resulting ln a nert lnward norrewrt of about 2rlOO uorlcers to the D,etroit Ht{A ln 1960.