- Detroit known as diverse economic and cultural hub
- Detroit is second in size only to Chicago in Midwest
While Staving Off Pandemic Impacts, Metrics Indicate Motor City Recovering
Sitting on the Canadian border and second in size to Chicago in the Midwest, Detroit has been a key city for trade for over 300 years.
Today, Detroit is home to General Motors, Ford Motor,Fiat Chrysler Automobiles and Penske Automotive GroupÂ as well as to the Motown sound.
State of Detroitâ€™s Housing Market
Like everywhere in the country, Detroitâ€™s housing market is a beneficiary of the countryâ€™s ongoing inventory shortage.Â Prices are up +14% y/y with a median price of $160,000â€¦obviously still Â well below the national average median price of $353,000.Â This rising discrepancy gives investors a lot of room to negotiate
In terms of â€œbuy-and-holdâ€ investors, rental vacancies were up to 8.7% in Detroit during March 2021.Â Well above the national average of rental vacancies of 6.8%, investors may want to consider implications for marketing and turnaround times.
The pandemic hit Detroit hard.Â In May 2020, its unemployment rate was 24.8%, or nearly double the national average of 13.3%
However, as of March 2021, Detroitâ€™s unemployment rate dropped to only 4.5%, lower than May 2021â€™s national unemployment rate 5.8%
Detroitâ€™s Median Home Price
Motor City home prices have jumped +14%y/y with a median home price of $160,000.
Also, due to national inventory shortages, Detroitâ€™s housing supply, as of March, stood at 1.3 months while the nationâ€™s supply was only 1.09 months
Detroitâ€™s Median Rent Price
Motor Cityâ€™s rent prices have jumped +7.8% y/y.Â As of March 2021, the average rent price in Detroit hit $1,284, about â€“25% behind rental prices nationwide
When investors consider the fact that home prices in Detroit are approximately -55% below the national average, investors may believe that the odds are in their favor when it comes to getting ahead on Detroit investments.
Detroitâ€™s Real Estate Health Indicators Improving
Mortgage delinquencies are up slightly by +0.6% y/y at a rate of 3.9%.Â Foreclosures, on the other hand, are down -0.1% y/y to just 0.1%.
Investors Specializing in Student Housing
The University of Michigan in Ann Arbor is just 45-minutes from downtown Detroit.Â UM is the regionâ€™s largest higher-education institution with over 31,000 students.
Wayne State University is the only large university located within the city of limits of Detroit.Â Its student body population exceeds 26,000.
Oakland University in the suburb of Rochester, some 30 miles NW of Detroit, is home to more than 20,000 students.
Neighborhoods Worthy of Investment Consideration
Knowing that conditions differ on a street-by-street basis in Detroit, here are some neighborhoods investors might like to explore:
- West Villageâ€“ close to both Downtown and the Rivertown-Warehouse district, the West Village is walk-able and increasingly popular with working professionals and young families
- East English Villageâ€“ up-and-coming neighborhood with shopping and restaurant amenities PLUS affordable housing built in the 1930â€™s to 1950â€™s
- Fitzgerald â€“ this a neighborhood filled with both enormous revitalization efforts and abandoned houses â€“ it could be worthy of fix-and-flip investments as investors could find some leverage in terms of price negotiation.
Thanks to Millionacres and Housing Tides by EnergyLogic.
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