The state of Michigan and the Michigan real estate market were among the hardest hit areas when the real estate bubble collapsed in the second half of 2008. The economy of Michigan was already reeling before most of the nation felt the effects of the recession, because of the nature of the state's financial forces. Michigan's most populous city, Detroit, is the center of the American auto industry, which has been in serious economic trouble for the last decade at least. Detroit has been losing jobs for several years, a fact which only exacerbated the recession once it struck. Michigan's foreclosure rate skyrocketed, home sales dropped dramatically, and sales prices fell like a rock. Michigan's real estate market was in trouble then, and continues to have issues to the present day.
The rate of foreclosures in Michigan is a good indicator of overall real estate health for the region, and gives a mixed picture for the region. The Lansing State Journal reported on July 16, 2009 that “The pace of foreclosures in mid-Michigan may be slowing, though they are sharply higher than a year ago. Irvine, California-based foreclosure activity tracker RealtyTrac Inc. reported there were 686 in Ingham, Eaton and Clinton counties in June - a 70.2 percent jump from June 2008 but a 2.7 percent rise from May.” Coldwell Banker Realtor Bob Hubbell said that “in June we saw an increase in business, both in closed and pending business, which was good....but we continue to see lower property values.”
The Lansing State Journal reported on July 5, 2009 that the rate of foreclosures has reached such a blistering and unsustainable pace that there are entire businesses springing up around the idea of maintaining uninhabited foreclosed houses. There seems to be something of a positive trend in northern Michigan real estate, as reported by 9 & 10 News on June 23 of 2009, which stated that “Existing home sales are on the rise across the country, and right here in Northern Michigan. The National Association of Realtors said today that last month marked the first back to back monthly increase in sales since September of 2005.