Yea! We’re number one - again!

Take that California! The Detroit area, hit hard by the double-whammy of unemployment and a slumping housing market, had the highest foreclosure rate in the nation last year, with several cities in California ranked close behind, an analysis of foreclosure activity in the country’s largest 100 metropolitan areas shows. Oh yeah! Oh, yeah! We’re number One!

As reported in the CNNMoney Real Estate News feed that I get every day, Detroit lead the nation in foreclosures in 2007. Some 4.9 percent of the households in the Detroit metro area were in some stage of foreclosure in 2007 — 4.8 times the national average, according to the study being released Wednesday by mortgage research company RealtyTrac Inc.

Stockton, Calif., ranked second with about 4.8 percent of its households in some stage of foreclosure, while the Las Vegas metro area was third with a 4.2 percent rate. Irvine, Calif.-based RealtyTrac determines the ranking by comparing the number of households in a metro area with the number of foreclosure filings, which include notices of default, auction sale notices or bank repossessions.

In all, 72,616 filings on 41,273 properties were reported in the Detroit metro area, which includes Livonia and Dearborn. The foreclosure rate represents a 68 percent jump from 2006, RealtyTrac said. Michigan has been in a protracted economic downturn and has led the nation in unemployment, a combination that has caused many homeowners to fall behind on mortgage payments. Another Michigan metro area comprising Warren, Farmington Hills and Troy was ranked 17th, with 2.1 percent of its households facing foreclosure.

The housing slump has been steepest in inland regions that experienced a run-up in home prices and new construction toward the end of the housing boom, so it’s not surprising that several of the six cities in the state that ended up ranked among the top 20 metro areas are located in the Central Valley and inland counties in Southern California.

In Stockton, 22,184 foreclosure filings were reported on 10,608 properties last year, up 271 percent from 2006, RealtyTrac said. The Riverside-San Bernardino metro area east of Los Angeles was ranked fourth, with 102,506 filings on 51,739 homes, a rate of 3.8 percent. Sacramento was ranked fifth, with 3.1 percent of its households reporting late payments. The other California metropolitan areas in the top 20 were Bakersfield, ranked seventh; Fresno, ranked 14th; and Oakland at 16th.

The Las Vegas metro area, which also includes Paradise, Nev., reported a total of 59,983 foreclosure filings on 30,375 properties in 2007.

Ohio, which has also been wracked by high unemployment, had four metro areas among the top 20, including Akron at 12th, Dayton at 15th and Toledo at 19th. The metro area comprising Cleveland, Lorain, Elyria and Mentor was ranked sixth, with some 2.9 percent of all households in some stage of foreclosure, RealtyTrac said.

Miami ranked eighth with a 2.7 percent rate, the highest among all metro areas in Florida. Fort Lauderdale was 10th and Orlando was 20th.

The other areas in the top 20 were Denver-Aurora, Colo., at No. 9; Atlanta-Sandy Springs-Marietta, Ga., at No. 11; Memphis, Tenn., at No. 13.; and Indianapolis at No. 18.

The story that slips through the cracks and goes untold, in all of these reports of how bad things are, is where the people went who lived in those houses. Where did the 41,273 Michigan families go, once their homes were foreclosed? What has become of the 70-80-90,000 people (or more) who were living in those homes? How many gave up on Michigan and left? How many are living in cardboard boxes under overpasses tonight? And what happened to the houses? I can tell you that many are still setting out there – sad, stripped or vandalized hulks that will likely never be lived in again - candidates for tear down. In the City of Detroit there are now areas that are classified as urban prairies; because they are just stretches of empty land where houses used to stand, in which nature has reclaimed the land with weeds, bushes and trees.

There is a story of human tragedy bubbling up underneath these articles that deal with the statistics of foreclosures and it will eventually burst to the surface. It will end up being much bigger than the tragedy of Hurricane Katrina and the long-term consequences may be looked back upon as a “sea change” in America’s history. As I reported in this blog a couple of days ago, the dream of homeownership is now out of reach for many in the so-called “middle class.” The foreclosure mess is just the latest and most visible sign that America has left the era of excess and plenty defined by the Baby Boomer Generation and entered into a new phase in its evolution, which may take “less is better” as its motto.

I'm already seeing articles about builders finally catching on and starting to plan to build smaller, more affordable houses in tract subs, similar to those build in the 50's. The Iconoculture updates that I get for the various identified generational groups also has identified that the so-called Millennials - the younger generation that is just now entering adulthood - have accepted the fact that they are not going to have things bigger and better than their parents and have adopted a more downscale lifestyle. We’ll see in the next 2-3 years how America deals with these fundamental changes to our collective lifestyles and expectations.

Whoa, dude! I got a little heavy there for a moment. For now let’s all just waive our foam rubber “We’re Number One” fingers around and celebrate. We’ beat out California in something!