DETROIT (Reuters) - Flint, Michigan, known for its drinking-water crisis, is also suffering a real-estate slump as the city’s rate of vacant homes stands at the highest in the nation, pushing down house prices, according to a report released on Thursday.
With fallout from the water emergency expected to send house prices lower, the vacancy rate may continue to rise, according to an executive at research firm RealtyTrac.
“The water crisis didn’t cause the root problem in Flint that’s contributing to these high vacancy rates, but it’s going to exacerbate the issue going forward,” RealtyTrac vice president Daren Blomquist said.
Flint’s real estate problems lie in the loss of higher-paying manufacturing jobs in recent decades and a roughly 20 percent decline in its population since 2000.
The city of some 100,000 people was under the control of a state-appointed emergency manager in 2014 when it switched its source of water from Detroit’s municipal system to the Flint River to save money, sparking the current water situation.
Flint's residential vacancy rate in February of 7.5 percent was the worst in the country, and almost five times the national rate of 1.6 percent, according to the report, which can be viewed at www.realtytrac.com/news. The Flint rate was unchanged from the last time RealtyTrac ran the data in September.
The picture is even worse for Flint’s investment properties, most of which are rentals. In February they had a vacancy rate of 23 percent, the highest level in the country, compared with a national rate of 4.3 percent, Blomquist said.
Median home prices in Flint slid 8 percent in December - the last month for which the data was available - from the previous month, Blomquist said. That was the biggest decline for any metro area in the United States, and preliminary January data shows the decline will continue.
Reporting by Ben Klayman in Detroit; Editing by Andrew Hay