The chart pretty much says it all: Detroit is dying. With the slow death of its industrial base, the auto industry, the middle class has departed. The current average home price is an eye-popping $7000. An example of what has happen to real assets in Detroit reported by the
Wall Street Journal is the home built by Clarence Avery, a Ford Motor executive who conceived of the auto assembly line. The five bedroom home sold for $250,000 in 2005. A woman bought it for $189,000 with a $200,000 subprime loan. She defaulted. The deteriorating home was bought by a non-profit which renovated it and sold it for $10,000. Of course the disappearance of the tax base has severe effects on city services. Recently Detroit announced the closure of one-quarter of its schools because it is out of property tax money. Crime has dropped recently, but in 2007 Detroit was the sixth most dangerous large city in America according to the FBI. Over 900,000 people have left Detroit since 1950, about half the city population. As the chart below shows the income per capita by city census tract in 2000 is less than $20,000. The city is now 81.6% black and only 12.3% white.
