We’d seen a similar number before and thought it must be a misprint, but the Journal reports that the average sale price in Detroit proper this year is just $20,514, adding a disclaimer apparently for skeptics like us that the “average is so low because many of the sales involve decrepit homes in neighborhoods with few jobs.” That number is down 56 percent from last year and has drawn sales, which are now up 48 percent.
The Journal reports that most of the sales in Detroit are foreclosures that lenders have chopped prices on and says that’s what’s leading to the sales increases in other hard-hit markets. In the Las Vegas area, sales are up 30 percent, while in Sacramento County, they’re up 41 percent.
The NYT on C1 reports on the growing horde of contractors making a living cleaning and fixing up abandoned homes, and avoids the flawed reporting that has plagued other publications—which have bought mortgage-industry explanations about “trashouts” that say as many as half of foreclosed homes are vandalized by their former owners—by saying it’s not clear who damages them.
Sign o’ the times
The Financial Times goes page one with a scoop that private-equity firms Blackstone Group and Apollo Management are talking about buying chemical company Chemtura “in what would be one of the bigger US buy-outs this year.”
That’s a sign of how far private equity has fallen so quickly. Chemtura’s market capitalization is just $2 billion. Toss in its debt and that increases to about $3.1 billion, or less than 8 percent of what Blackstone paid for just one of its deals last year, the Equity Office Properties buyout. Last year, this deal would have barely made the paper, much less hit the front page.
And the FT says the talks have been ongoing for months, but have been “moving slowly not only because of the tight lending environment but also because of its own weak earnings trends.” Still, though the paper doesn’t say it, the buyout talk is a sign that private-equity firms, which have been continued to raising billion of dollars in new funds, have lots of cash.
The NYT takes a look on C1 at the withering toll the price of fuel is taking on truckers. Diesel is up over $4.50 a gallon, and the paper leads with a Georgian who owns seven rigs but can’t afford to run any of them these days. It’s the “biggest shakeout since trucking was deregulated in 1980.”
Still, 70 percent of the nation’s freight tonnage moves over the highways on trucks, much of it in the diesel-powered tractor-trailers of the nation’s 350,000 independent operators, each with a fleet of up to five vehicles, one usually driven by the proprietor. Profit margins, notoriously thin in good times, are minuscule now, and each rise in fuel prices pushes more truckers into the red.
More than 45,000 vehicles, or 3 percent of the tractor fleet, have disappeared from the highways since early last year, according to America’s Commercial Transportation Research in Columbus, Ind. That surpasses the last great shakeout, in the early 1980s, when deregulation, along with a recession, high interest rates and the second Arab oil embargo, took out 33,000 tractors.
Big trucking companies are going bust at a pace about 2.5 times that of last year. The paper writes that air-cargo haulers are also feeling the pinch, while railroads are benefiting because of their greater fuel efficiency.
The Journal reports on A5 that the apocalypse really may be nigh: Americans drove less in March (compared to the previous March) for the first time in twenty-nine years. The 4.3 percent drop is the biggest year-over-year decrease in sixty-six years of recorded history. That comes to 11 billion fewer miles.
Bloomberg reports that high prices are spurring gas bootlegging. But its lead example is a conviction from three years ago and while the story seems to make sense the reporting really doesn’t prove anything.