Living in and Visiting Detroit, Michigan
Michigan is known as the great lake state with avid fishers and is home to the world's largest freshwater sand dunes. Additionally, the first automobile manufacturing plant was opened in Detroit, Michigan.
Michigan is also known for its top cherry, blueberry, and apple agriculture. Additionally, waterfront homes on four of the five great lakes shorelines make for some of the most desirable Midwest properties.
De, the most populated city in Michigan, is a real estate market with highly affordable housing. That being said, property taxes are incredibly high in Detroit, and insuring a home in Detroit can also be expensive due to high crime rates. Homes in Detroit increased in price by 2% from September 2021 to September 2022. The small increase in average sale price does not match the common trend in other top Midwest cities in the United States during this period. For example, the average home price in Minneapolis, Minnesota, during the same time rose 8%. Considering that the average home price in Detroit has been under $120,000 for a long time, we do not see Detroit as a seller's market anywhere in the near future.
With the rising interest rates, far fewer home sales being closed, and high crime rates, the Detroit housing market is showing signs of cooling down even more. Therefore, we predict the housing market will still be a buyer's Market in the first quarter of 2023.
Source: Detroit Realtors
Based on the above statistics, we have made an educated hypothesis on how the housing market will go in the coming months in the Midwest city of Detroit, Michigan.
With rising interest rates and fewer closed sales, the housing market in Detroit, Michigan, is less desirable going into 2023 than in 2022. As a result, home prices in Detroit (and even some of its surrounding areas) will likely stay the same or steadily decrease at a much slower rate because of the competitive buyer's housing market.
According to the same market data source, similar real estate trends can be found throughout Michigan. For example, year-over-year, new listings and home sales in September went down across the Michigan area. Some counties where home sales decreased in Michigan include Wayne, Oakland, Kent, Macomb, and Saginaw county.
We predict that time on the Market before a house will continue to increase slowly due to the area's competition and low home values. It is no longer the trend for buyers to feel the need to skip inspection or go well beyond the list price. Unfortunately, many sellers still often think that the housing market is in the same position as in 2021 and early 2022. As a result, it can take longer for a buyer to accept an offer from a seller. In many Michigan areas, sellers must come to terms with the fact that buyers will likely wait to put in offers or get way over the market value price.
Cities in the Wayne County Area
*Some of Wayne County's surrounding cities and their population include:
*From sources across the web
Higher interest rates have significantly slowed things down in the last few months, which has played a part in Detroit's transition into a buyer's Market. Houses are still selling but at a slower rate. High- interest rates are a challenge to some buyers. There's no getting around that. Buyers often shy away from purchasing a home in the Detroit area and across the country because of the interest rate factor.
The hesitation in buying a home because of the interest rates is a possible mistake because now you can buy the house cheaper than you could 6 months or even a year ago in the Detroit area. With this in mind, some buyers now purchase a home long-term with the hope of refinancing for a lower rate.
Housing prices in Detroit increased slightly throughout the year 2023. For example, there is just a 2% increase in average home sale prices in Detroit from September 2021 through September 2022. The small increase in homes for the Detroit, Michigan area isn't promising. It is significant to note that housing prices in Detroit are already astronomically low, and homes in other metro areas of the Midwest are selling significantly higher. For example, in October of 2022, homes in Milwaukee were selling for, on average, over $300,000.
We predict that the Detroit housing market and its surrounding areas will continue to be a buyer's Market in the United States going well into 2023. People are not holding off as they foresee a crash shortly with incredibly high-interest rates. So, we also predict that buyers will start seeing even more of an inventory of homes in the Detroit metro area. As a result, it will be a rough time for any Detroit, Michigan, home seller to sell their home during the 2023 year.
The area of Detroit is about 140 square miles, so we also recognize that there are safer areas in Detroit that are more desirable for buyers. Neighborhoods in Detroit, such as Palmer Woods and Sherwood Forest, can often sell for over $700,000. The quality of living is often viewed as night and day when comparing different demographic neighborhoods within the city limits of Detroit.
The Detroit real estate area, often brings in interested investors and homebuyers as it's an area with cheap real estate for sale. Additionally. Detroit is an area with various opportunities, recreation, and excitement. Unfortunately, there are a lot of struggles that come with investing in Detroit real estate.
Like most metro areas, good real estate in Detroit can be found if you look into the right neighborhood. There are some great areas to invest in when considering the Detroit area, such as Morningside, Palmer Woods, Sherwood Forest, and Buffalo Charles.
Many of the top areas to invest in real estate are costly, and the cheaper neighborhoods in Detroit are only sometimes the smartest areas to invest in. However, investing in real estate within the /Detroit area, especially the more affordable neighborhoods, is risky. With instantly high property taxes, high insurance prices for unsafe neighborhoods, high crime and vandalism rates, repairs that often come with homes in Detroit that aren't up to code, and high tenant turnover, it is a definite high-risk area to invest in Detroit real estate in lower-income areas.
Detroit And National Average Rental Trends:
The average rent in Detroit is $1213.
The national average rent price is $1356.
Detroit's rental prices are lower than the national average.
Our conclusion? Detroit can be a great place for investment in real estate, depending on the neighborhood. Many safer and more desirable neighborhoods in Detroit have more profitable rental opportunities, while others pose a high risk. We suggest doing your research. We also suggest looking at neighborhoods close to Detroit's desirable recreational areas, such as the Fox Theatre or Ford Field.
The Detroit area rarely has a short real estate supply, except for higher-income areas. As an investor, you will likely need to do extensive research if you want to have the opportunity to make money investing in real estate.
People have various opinions about living conditions in Detroit, Michigan. Like all big cities, Detroit has neighborhoods that vary in demographics, which create different living conditions based on the neighborhood.
For example, the median income in various Detroit neighborhoods ranges from $2,611 to a high of $261,251. The median income in Detroit is actually over $70,000. While this is higher than the national average, poorer neighborhoods in Detroit have higher crime rates due to the large gaps in the average household income for residents of Detroit.
Detroit can be a beautiful place to live, but like any large city, one needs to research before moving into a neighborhood. Some areas are better than others to live in. Additionally, Detroit's downtown area is known for its beauty and nightlife. At night, the city comes alive. There are many fun things to do, from concerts to ball games and festivals.
However, Detroit is also known for its crime for a reason. There's a side of Detroit some call "Detroit Proper" This area of Detroit can be scary and is Detroit's area of poverty. The schools are often labeled as "very bad," and children often do not get a great education. For example, Osborne High School in Detroit, Michigan, has only a 50% graduation rate and scores a measly 3% in Mathematics proficiency and 6% in reading proficiency.
Even people who live in the "nicer areas" of Detroit, such as the suburbs, will sometimes stay on the expressways to intentionally avoid seeing the more impoverished areas. Additionally, awkward enough as it is, some of Detroit's suburbanites will have some familial connection. Of course, they can't avoid the "poor area" of Detroit entirely, but you can tell they are uncomfortable when visiting these areas.
Visiting Detroit, Michigan
When visiting Detroit, one can choose to only see the beautiful, positive areas of Detroit, such as the Ford Stadium, mouth-watering restaurants, the Detroit Symphony Orchestra, and lush neighborhoods. The greater Detroit region is known for its museums and other historical landmarks. Detroit also has a team in the four major sports- hockey, football, baseball, and basketball. The Detroit Zoo is also highly rated. It is easy to take a fun, safe trip to Detroit if one stays in the safe areas and avoids mid-night activity.
However, if one steps outside of the safe boundaries of Detroit and choose to "see it all," wealthy and impoverished areas. These areas seem like a world apart from each other. Many of Detroit's poorest area's have over half of its residents living below the poverty level. For example, the Brightmoor neighborhood in Detroit has almost ¾ of its residents living below the poverty level.
You can visit Detroit's Zug Island, which has been under fire recently for increasing its sulfur dioxide emissions and endangering people who lithe the lives of people in the surrounding neighborhoods. You can visit the neighborhoods in Detroit where crime, poverty, and vandalism are rampant. You can visit abandoned, condemned, and vandalized homes throughout Detroit, and sadder, you can connect with the homeless in Detroit. But unfortunately, many of its citizens do not have access to safe housing.
Shocking Detroit Research: Wallethub named Detroit, Michigan, the neediest city in America based on their 2022 study.
Detroit's real estate market is cooling further into 2023. Unsurprisingly, Detroit remains a buyer's Market as there is more supply than demand. Various factors contribute to Detroit's need for more interested buyers, ranging from high crime rates to high taxes. In most neighborhoods, people need to envision their dream home in Detroit.
The research matches this statement. In September of 2022, there were only 374 closed sales in Detroit. Higher taxes and interest rates are a big factor for homes in Detroit not flying off the Market, but the high supply of inventory also contributes to the housing problem. In addition, Detroit does not have the best reputation, with one of the highest crime rates in America.
For the real estate market to switch to a seller's Market, the inventory needs to decrease by several months.
Additionally, interest rates and taxes must decrease, and new, innovative crime programs must be implemented. Therefore, those looking to purchase real estate in Detroit, Michigan, and its surrounding areas during the upcoming months should consider that it is still a buyer's Market before submitting an offer. Most investors should be able to get lower than the asking price in most areas of Detroit.
Why are fewer (over year-over-year in September 2022) closed sales in Detroit, Michigan, when homes are selling for more than they were on average less year?
Answer: Fewer homes are going on the Market. So, while the demand is low, people are also putting their homes on the Market less for various reasons.
Making a real impact on Detroit by focusing on its high-crime areas can help all avenues of Detroit, including its housing market. For example, cleaning up a neighborhood and working to make it safer and more desirable will improve its housing market.
The real issue in Detroit lies in its high crime areas, which, unfortunately, are highly numbered.
The city remains highly segregated; racially, socially, and economically. Some places have seen improvement in Detroit. Unfortunately, the improvement is for select people who live in specific neighborhoods. When people talk about Detroit improving, they talk about Metro Detroit and its nicer neighborhoods. Truth is, Detroit is number 23 on the world list of cities by murder rate. If you don't have the money to live in an area of Detroit that can't keep out the crime, you should avoid Detroit altogether when searching for a home.
Houses for sale across Detroit and the surrounding areas are getting fewer offers and very rarely sell without an inspection. In most areas of Detroit, the housing market could be stronger. The imbalance of available homes versus interested buyers in the area makes Detroit a hot market for buyers and a risky one.
Therefore, we predict the Detroit area will still be a buyer's Market well into 2023.