Homes prices in the U.S. state of Michigan are continuing to crash despite reports of an improving market, with properties values in the Detroit metro area down by 9.7% year-on-year in 2011. And in the fellow former automotive city of Flint, prices are down by a massive 24%.

“We still have foreclosure issues and that's hurting us,” Westland assessor James Elrod told OPP. “The more stable communities are more affluent and rebounding quicker.”

Around the Detroit area last year, there was a 10.1% decrease in Wayne, a 14.7% drop in Garden City and 16.3% fall in Inkster. Livonia saw a 4.2% decrease in residential property values and Canton saw things go down by 2.5%.

All of these areas are united by industrial collapse and large stocks of vacant and foreclosed homes, many of which are starter homes. “The loans that caused this crisis were aimed at first-time homeowners — getting them out of apartments,” says Elrod. “The foreclosures hit starter home communities harder. It hits us, Garden City, Redford and Dearborn Heights where we have a lot of starter homes.”

The assessments are based on a one-year market study covering the period of October 2010 to October 2011. And, “unfortunately, we are probably going to continue to see residential values decreasing,” said Elrod. “Foreclosures are still happening and probably will continue for the next couple of years.”

In the nearby city of Flint, residential property values have plummeted by an average of nearly 24% in the past year, the largest drop in recent memory, officials said. A surplus of foreclosed homes has flooded the market, City Assessor William Fowler told OPP. "That's the largest decrease I've seen," said Fowler, who has worked for the city since 2004. "When I first came we were still in an increasing market, then in 2008 the market suffered."

Overall, the city's tax revenues will come down by about 20% says Fowler and, following further closures by the big local employer General Motors, the city faces a multimillion-dollar deficit.