General Counsel Lifetime Achievement Award: Leroy Richie looks back on a career full of firsts, Page 9 APRIL 25-MAY 1, 2016 Demand among homebuyers is starting to outstrip supply locally:
52 days
Average time homes stay on the market. It was 78 days three years ago.
13,000
Inventory of homes for sale - it’s down and still falling. Inventory was about 30,000 in the depths of the foreclosure crisis.
Health systems reverse trends, reap profits
Medicaid expansion, more patients spur surge By Jay Greene jgreene@crain.com
A homes run By Kirk Pinho kpinho@crain.com
On Marlin Avenue in Royal Oak two weeks ago, a small, two-bedroom house sold in just five days — for $5,000 more than its $140,000 asking price. David Elya, who sold the 775-square-foot house south of 12 Mile Road on April 11, said that is just one example of how the area’s supply of for-sale homes simply isn’t keeping pace with buyer demand. “That wouldn’t have been possible back in the foreclosure days, when they (for-sale homes) were a dime a dozen,” said Elya, broker/owner of Rochester-based Brookview Realty. Case in point: Since January 2013, the for-sale inventory in the four-county metro region has fallen by 16.3 percent, from 15,537 listings in Wayne, Oakland, Macomb and Livingston counties down to 12,997 in March, according to Farmington Hills-based Realcomp Ltd. II.
Demand
outpaces supply of houses for sale That’s one of the reasons median sale prices have increased 85 percent in that period, from $80,000 to $148,000, according to Realcomp. Although there has been a sharp decline in on-market inventory, that brings the market in line to where it has been traditionally in terms of homes for sale, said Ann Peterson, broker/ owner of Rochester-based Ann Peterson Realty Services LLC. “We always held between 10,000 and 13,000 homes on the market,” she said. “There are still a lot of homes.”
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Detroit medical marijuana shops sprout like weeds near the suburbs By Robert Snell and Marti Benedetti rsnell@crain.com | mbenedetti@crain.com
A new zoning law and suburban customer base are pushing medical marijuana dispensaries to the fringes of Detroit. About 250 dispensaries have applied to operate under the new zoning law in Detroit, and an analysis shows clusters of retail medical marijuana shops operating along Eight Mile Road and the east side of Detroit, bordering Ferndale, Hazel Park, Eastpointe, Harper Woods and the Grosse Pointes. “If you’re looking for honey, where are all the bees?” said Grosse Pointe Park attorney Tim Dinan of Dinan and Associates PC, who represents both medical marijuana caregivers and patients. “The bees are in the suburbs.” The analysis of city data released to Crain’s under a
SEE HOUSING, PAGE 21
Take a closer look online For an interactive map of the density of Detroit’s medical marijuana shops, see Crains
Detroit.com/ marijuana
SEE MARIJUANA, PAGE 21
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“We’ve gotten somewhat back to pre-recession numbers,” said Joe Sabatini, vice president and regional director of Re/Max of Southeastern Michigan in Troy. During the foreclosure crisis, 30,000 or more homes were up for grabs at any one time. Buyers either couldn’t get financing, couldn’t sell their own house or were skittish about making such a large financial commitment during a time of economic upheaval. Now that has reversed. The average property — a forsale home or condominium — spent 78 days on the market in January 2013. Last month: 52 days, according to Realcomp. “I used to sarcastically tell people five years ago that when they said their house had been for sale for a year that they were just getting started,” said Frank Tarala, broker and franchisor for Principal Brokers Network in Sterling Heights. The current market conditions are the result of a slew of factors. First, people who bought their
Southeast Michigan health systems last year battled double-digit increases in drug prices and historically low rate increases from commercial and government payers to post the highest profit margins in several years, according to top system executives. After several years of continued Medicare reimbursement cuts and financial penalties to help pay for the Affordable Care Act that have dampened profitability, the five systems in metro Detroit that reported 2015 financial data to Crain’s positively rebounded by treating more patients and continuing to hold expenses down. Aiding their efforts to improve profit margins have been double-digit declines in uncompen-
sated care, which includes charity care and bad debt, due primarily to Medicaid and private health insurance expansion that added more than 1 million people in Michigan to insurance rolls. It’s unclear if the decline in bad debt will continue. Last year was a reversal of previous trends of increasing unpaid patient bill, and some hospital executives said they expect bad debt to increase again as more people are covered by high-deductible health plans, which put more responsibility for paying on patients. Last week, Crain’s reported record average 2015 profit margins to 3.9 percent for Michigan’s 14 Medicaid HMOs, which also was primarily stimulated by Healthy Michigan expansion of 619,000
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