Newspapers in San Diego, Istanbul, Beijing and parts in between picked up the Reuters story last week that pointed out some homes in Detroit were selling for less than the average price of a new car.
Ouch.
Reuters reporter Kevin Krolicki is based in Detroit for the international news agency, which focuses on financial news for media and corporate customers. As part of his reporting about how the contraction in the auto industry is affecting the city, Krolicki decided to attend a foreclosure auction. "It turned out to be a great way to watch the kind of decisions played out over days and weeks and months in something like real time," he says.
As references to cars are inescapable in Detroit, Krolicki thought about relating home values to auto prices as he watched the houses sell for sometimes less than $30,000. The average price of a new car is about $29,000. One house sold for $1,300.
Krolicki's story led the Reuters Web site and was on the top of yahoo.com. "It was the most e-mailed story and briefly the most viewed story on yahoo.com," Krolicki says. Three of his sources called to say they had seen it, which "seldom happens." Krolicki saw his story on financial and investment sites, foreign affairs pages and all over the blogosphere.
"The interesting thing to me out of all this was just something of an affirmation about how much interest there is in Detroit. Not just Detroit for the auto industry, but as a place," he says. "This story just happened to come at a time when people are concerned about the housing market nationally. I think that's relatively new. I think a lot of people looked at the story and said, 'If you want to see what a sub-prime mortgage crisis or a mortgage crisis overlaid on top of an economic recession looks like, this is as bad as it gets.' I think we're something of an example of the worst."
Southern California financial blogger Tim Iacono opined that the story was a metaphor for the U.S. economy. "While the sedans and SUVs that roll sparingly off of the Motor City's production lines are of more value than the residences they pass by en route to dealers, hasn't something gone terribly wrong somewhere in the economy?" he writes.
In Toledo, the story had Blade newspaper columnist Roberta deBoer hoping the busted housing market doesn't roll down I-75. "Not to say 'boo' or anything, but I just read a story that made my hair curl," she wrote. "Will Detroit's house-glut illness head south to us? "
Krolicki is a 42-year-old Detroit native. His journalistic career took him to Japan for 12 years and Los Angeles for six. He returned here last year. "In a strange way, I think the reporting in Japan is a good parallel and preparation for what's happening here," he says. "The asset bubble collapsed in the early '90s, there was a huge speculative run in property and then values collapsed. Here, this is the bust minus the boom."
News Hits is edited by Curt Guyette. Contact him at 313-202-8004 or [email protected]
