Another cause of foreclosures is job loss. The WSJ reports on tony Bloomfield Hills. Oakland County, where Bloomfield Hills is located, is the nation’s fourth-wealthiest county with a population of more than one million, according to the latest per capita income data from the Commerce Department. In Oakland County, 723 homes are in foreclosure, more than double the 334 in February 2004. Michigan now has twice as many homes in foreclosure as it did in February 2004, and the state’s current foreclosure rate is about two-and-a-half times as high as the national average.
Across Bloomfield Hills, residents are changing their lifestyles in ways large and small. The 325-member Forest Lake Country Club says it has a 20-person waiting list to get out of the club. (Last year, there were just four people on this list.) In order to get back a portion of their equity in the club, these members have to pay $540 a month in dues until new blood can be found to take their slots. To lure new members, the club has cut its initiation fee to $15,000 from $45,000. At Erhard BMW in Bloomfield Hills, sales are down 10% to 15% from last year. Stanford Krandall, who lives in Bloomfield Hills, is closing his family’s jewelry business, located nearby. Founded by his great-grandfather in 1911, Sidney Krandall & Sons catered to some of the area’s richest residents. But sales were down more than 25% since 2003.
Anna DiMaria, 65, ran beauty businesses in the area for nearly four decades. But last summer, she closed down her once-thriving Capelli Spa because she says at least 30% of her wealthy client base had cut back on visits or stopped coming. “Instead of getting facials every month, they’d get them every three months,” she says. “They’d say, ‘My husband and I have talked it over. We’re taking a cut in our luxuries.’ ”
Some clients were getting their false nails taken off to save the $70 monthly maintenance fee, says Ms. DiMaria. “They’d tell me, ‘I want to let my nails breath.’ They didn’t want to reveal it was an economic decision.”
In nearby West Bloomfield, Angelo’s Bistro lowered its prices almost 30% in January, and took away the tablecloths and upper-end menu items, such as pasta with lobster. It changed its name to Angelo’s Greek Restaurant. (Customers could afford the cheaper greek food.)
The ear-nose-throat physician expects his patient load to fall 10% in the year ahead, as patients skip appointments to cut down on health-care costs. Dr. Succar has been reevaluating his own finances. “I’m definitely cutting expenses,” he says. “We’re working on a budget now. We’re worrying about the future and what’s coming.”
