Annual Auction Still Visible In National Numbers
Each September Wayne County, Mich., experiences a spike in completed foreclosures as a result of an annual auction of tax-delinquent properties. The tax foreclosure process is lengthy (owners of the foreclosed properties are typically delinquent on property taxes for three years) and Michigan state law requires the auction of the foreclosed properties. The number of tax-delinquent properties sold at the annual auction is large enough to be evident in national foreclosure numbers. Between 30 and 40 percent of national completed foreclosures each September are in Wayne County. The chart shows that the spike in completed foreclosures due to the Wayne County tax auctions began in 2011. This timing corresponds to that county’s very high unemployment rate and the depth of its housing crisis. In early 2011 the county’s unemployment rate was close to 14 percent, home prices had declined over 50 percent from the peak and 48 percent of homeowners owed more on their mortgages than their homes were worth.
CoreLogic data shows that about 13,000 foreclosures were completed in Wayne county in September 2016. While the problem of tax-foreclosed properties for the county is far from disappearing, the 2016 spike in completed foreclosures is about half that of a year before. A number of factors might have contributed to the decrease in tax foreclosures in 2016, including the following: outreach efforts, pending lawsuits, and a burgeoning economic recovery in the county. While Wayne County’s unemployment rate was higher than the nation’s in November 2016, it was less than half its unemployment rate at the start of 2011. Wayne County’s economic recovery includes significant improvement in its housing sector. CoreLogic data shows that home prices in Wayne County, Mich., have been increasing for over five years, and have gained 82 percent since their March 2011 low and are forecast to rise an additional 6 percent in the coming year. The increase in prices has helped the equity position of borrowers in the county. The negative equity share for Wayne County, Mich., was 15 percent in Q3 2016, down from 18 percent a year earlier.
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