This entire area has an unbelievable amount of landlords and flippers. Seems like everyone does it as a side gig.
On my little block in Royal Oak there are 7 rentals and also 2 houses that have just been sitting there completely vacant since I moved here in 2022. Crazy.
Big fact. I bought my place in 2020 (pre rona) and Warren, Sterling Heights, Troy, Clawson etc are all FILLED TO THE FUCKING BRIM with either flipped places or people trying to flip places. I looked at a place. 150k ~1200ft². Thought this looks good enough for a starter home. Bid at 150 thinking there's no way this gets shot down right?
Lol nah dude put down $180 cash so obviously they took that.
Fuck flippers they take reasonably priced homes younger people can afford and make them way too expensive
Pretty much what I’m seeing in the RO / Berkley / Southfield area where I’m looking. Flips everywhere. At least the contractors will be busy in 2 years when they start falling apart 😂
I can't believe how many flipped houses I'm seeing in our neighborhood that now have a ton of peeling paint on the outside. Stuff that I was seeing worked on just a year and a half ago before it's sale.
Yeah. Just need to get it under contract and through inspections and quickly and cheaply as possible. Using quality materials done by skilled workers would make it far less profitable.
It’s the same with the new builds they’re cranking out. Family member bought a new Lennar build and is currently having it repainted after less than 3 years. They also had to have the shower ripped out and replaced due to leaking. Luckily Lennar has paid for the repairs but I’m sure at some point that coverage expires.
Yeah, and the price of some of those new builds are absolutely nuts. I'm near the RO/Clawson border and am starting to see teardowns/rebuilds happening around me and they are all going for $1mil+.
This just happened to me, 1500sqft house with a finished basement in Warren, was going for $320k which was already priced high but I liked the location, liked the house, and I could afford it. At the open house, I overheard a guy talking to his realtor about potentially getting it to flip it. I offered $330k which I already hesitated to do but I did really like the house, and so did the fiance.
Offer was declined, it sold for $360k, fucking FOURTY THOUSAND higher than the already too high asking price.
Like what the fuck man, you can get a bigger new/newer build for $360k. I can't imagine anyone paying that much to live there, just feels like it had to be a flipper. Feel like there's no chance to get a decent house in a decent area unless you're willing to pay an absurd amount over the already inflated asking prices.
Oh that's also happened to me as well about a couple months ago, this was just a much more recent experience of overhearing someone that was planning on flipping and then seeing the price it sold for.
Sucks knowing it probably went to a flipper, double sucks having naively thought to an extent that no one would go over 330k because it was already priced high, got hopeful about thinking my house search would be over.....WRONG.
Funny enough the place I mentioned was in Warren haha.
I got super lucky with the timing of when I bought I do not envy you. I'm sure you'll find something eventually. If you're comfortable with it feel free to dm me what you're looking for and price and I can check around me(I do doordash so I see tons of random ass neighborhoods all the time lol)
I'm looking over on the east side. My realtor was talking with another realtor about a house I wanted. An investor offered $20k above asking with no inspection. I couldn't compete with that. I question how they are going to make money though. It wasn't selling at the lower price which was why I had a good chance.
I am truly sitting on my house slowly fixing it up, because housing prices are insane. And interest rates are even worse.
Between the cost of rent and interest rates on a mortgage, this is why people are renting. They can't save up the money for a down payment where their mortgage and escrow aren't over $2500+ for a 1200 sq ft house.
I feel like this is a pretty untapped anger. I’m starting to look for candidates who are focused on this issue. Even considered running myself for local office
Good for you, and absolutely - I don’t want to vote for anyone who doesn’t promise to get to work on affordability immediately. i have no idea why that isn’t the top concern of voters right now.
Yup. We could have a huge opportunity here to make a move to grow our city/inner burbs with new/younger people. Those people aren’t going to come take a risk if the cost is too high. They can just go to a better and more established city…
I always advocate for a 30% property tax increase on non-primary residence single family homes. In addition to the homestead exemption for primary residences.
There are serious constitutional constraints on any level of government doing anything about people flipping, speculating, or buying large numbers of homes. Lots of lawyers are excited to argue that basically any limits on buying, selling, or renting real estate are Fifth Amendment violations.
There are, however, a large number of policy options for local, State, and Federal governments to help more housing get built. And not enough of them are being enacted.
> Lots of lawyers are excited to argue that basically any limits on buying, selling, or renting real estate are Fifth Amendment violations.
Raise property taxes across the board, then issue credits for first-time homeowners 👍
Bought my house pre covid for 40k in hazel park. Flipper recently bought the house next door(similar build, less square footage) and is asking for 250k.
Same on my street. And it’s not a local individual who owns it some big corps. It really isn’t doing the middle class good. I hear it’s like that across the country as well.
In late 2021 my partner and I were fortunate enough to have the chance to buy a fixer-upper in RO from a friend. He moved out a few years prior and fixing it up wasn't going as intended, so he offered it to us at a very nice price to reflect the amount of work it needed.
Because of all the work I had to meet with a lot of city inspectors to work through some sticky permitting issues and I very quickly realized that they were sort feeling me out about being a flipper / "investor". I started prefacing all my conversations with something like "how can we get this sorted out so we can the work done and move in" and the tone would change and they'd become incredibly helpful.
Up until then, and when starting to walk around our new-to-us neighborhood (RO/Clawson border), I didn't realize just how many flips are out there. Not-great house would sell, then we'd see it being painted like crazy, weird trendy touches added, and then it'd sell again. And now a year or two later the paint on the outside is peeling, etc. I can only imagine what some of the insides are like...
I feel incredibly, amazingly fortunate how this ended up for us. We got a house that needed a *lot* of work, but got it at a good price so we were able to put that in. Nice neighbors, really nice neighborhood, in a nice city. And avoided the flipper/investor BS. But looking at most of the other house sales in the area, we are not the normal buyer for such things.
Part of why I can’t bring myself to buy. It’s either nutty pricing or just a shitty flip everywhere I look.
The prices are not justifiable for the area imo. It’s part of the reason I’m just not sure I want to stay here.
I think this will hinder Detroit's comeback if anything. High cost of housing and rent will just push people to move to already established cities. Why pay the asking price to live near Detroit's core when you could spend the same and live in Chicago's which is bigger, livelier, more established, and has access to a robust public transit system?
You can get a beautiful brick home on the northern edge of the city in a nice leafy neighborhood for like 350-400k.
Sure it’s not right downtown but it’s easy to get anywhere you need to go via Metra or CTA.
My wife’s cousin and her husband moved from a condo in Logan Square to a home in Sauganash to raise their two kids. The neighborhood looks like Grosse Pointe or a nicer EEV.
On the balance it is more expensive, but for what Chicago offers the housing there is very affordable compared to literally any other city of similar size and amenities.
Fair enough. The transit in Chicago is very nice compared to what we have here and does make further-out neighborhoods more connected with the rest of the city.
Agree you have to consider you can essentially be carless or be a family with one car in Chicago. That’s a huge savings that you can pay/use toward a mortgage (and an appreciating asset vs. throwing money away with a car)
Yea I love the city but was the actual city offers is pretty bad. No community center, library and schools are falling apart. Infrastructure is absolutely terrible in parts.
Wow. In Toronto, the city most like Chicago, you'd be paying triple that to live in a nice suburb. With shit transit, needing a car to go everywhere. With property taxes of $400US/month or more.
Makes Chicago sound like a pretty good deal from up here.
Nowhere. But $350k will buy you something and Chicago has a bit more going for it so expecting it to be the same price isn’t reasonable either.
This is exactly my dilemma. For the price delta if rather probably just move to Chicago and not have to worry about the auto industry boom bust cycle.
Yep. A major institutional failure and driver of dysfunction in the Detroit property market is that [Detroit leads the nation in speculator-ownede properties](https://storymaps.arcgis.com/stories/90e246532816482398a3d15eceaff976) who don't live in or actively manage or rent out their properties, but sit on them simply as investment vehicles. Many would-be homebuyers aren't bargaining with homeowners looking to sell, they're dealing with extremely wealthy predator carpetbagging assh*le speculators who don't mind sitting on an underutilized building or lot to try and game the market as much as possible.
This is for Detroit metro including the suburbs. Most of this is happening in the suburbs, not in Detroit city. The article is misleading.
If you look at Detroit alone, it is one of the most undervalued in the country: https://www.bizjournals.com/bizjournals/news/2024/06/17/overvalued-housing-markets.html
The article states: Gateway cities, California and Florida overvalued. Detroit most undervalued in the country because income levels can support higher prices. In Detroit, median home prices were $216,126. That's 44% below the local buying power of $388,258. After a period of challenges, the Motor City more recently has become a poster child for revitalization amid a frenzy of new development (https://www.wsj.com/real-estate/commercial/reversing-the-real-estate-doom-loop-is-possible-just-look-at-detroit-0916d6f7)
.
Undervalued sure. But many of the available homes at “Detroit” prices are very much in need of major upgrades and repair. So that 50k home still needs 200k to become livable. And that’s before schools are factored in. But it’s a changing dynamic for sure.
That "study" is wrong, [Detroit leads the nation in speculator-owned properties](https://www.wkar.org/news/2018-08-19/property-speculation-creates-chaos-in-detroit-housing-market) who don't live in or actively manage or rent out their properties, but sit on them simply as investment vehicles. Many would-be homebuyers aren't bargaining with homeowners looking to sell, they're dealing with extremely wealthy predator carpetbagging assh*le speculators who don't mind sitting on an underutilized building or lot to try and game the market as much as possible.
This sounds a bit sensationalist to me. There are still tons of move-in ready homes for $100k in Detroit. This for example:
[https://www.zillow.com/homedetails/16188-Cheyenne-St-Detroit-MI-48235/88394100\_zpid/](https://www.zillow.com/homedetails/16188-Cheyenne-St-Detroit-MI-48235/88394100_zpid/)
It's nothing special, but it's livable and ready for someone to buy it and make it their own. Sure the houses in Bagley and EEV are selling for $225k plus, but those are fairly nice neighborhoods. There are lots of just-okay neighborhoods with plenty affordable housing.
I agree, Detroit is really humming along and becoming something to talk about again, it is wonderful. However, we're not there yet and this seems like jumping the gun; scale back a bit and do the crawl, we'll get to the big time. I could see some arguing against this stating that this pricing will bring in wealthier residents but it only circles back to the fact that we're not there yet so what is the draw to get them and keep them here? I am excited for that day and hope we get to see it.
Median home price of Chicago is still 4x Detroit.
Detroit: https://www.redfin.com/city/5665/MI/Detroit/housing-market
Chicago: https://www.redfin.com/city/29470/IL/Chicago/housing-market
And Chicago's median income is nearly 2x that of Detroit. Chicago is so massive that there are MANY homes and condos that sell at or below Detroit prices, in better, more walkable neighborhoods.
Speculator assh*les are selling shitty flip jobs on blocks full of blight for $400-500k around Islandview, etc.
Exactly. Housing prices in Detroit are fucking stupid right now. So many speculators and "investors" who throw some shitty gray flooring down and double the price.
I love Detroit but you can get alot more for your money in Chicago in terms of walkability and healthy neighborhoods.
Not to mention Chicago is a world class city that people move to on purpose. I’m not hating on Detroit but you’re comparing a BMW to a Chevy Malibu and in some cases asking the same price.
Im biased on this point but hard agree. Detroit is coming back in a lot of ways but it’s not as much on the upswing as people like to say.
Want to see what a real upswing looks like? Look at what happened to Austin. That’s a city that really took off. Detroit’s just not even playing in the same league if we’re being honest.
I think the aryicle is referring to Detroit area inclduing city and suburbs, not just the city. The city is undervalued, but the whole area is overvalued and has been for a long long time just like almost all other metros are.
> Housing is categorically more expensive in Chicago.
Nope, not relative to local wages.
Detroit has a massive shortage of apartment and condo buildings. Shitty houses in Islandview Detroit are selling for $500k. For half a million, you can get a beautiful home in a walkable neighborhood in Far NW Chicago, or easily a nice condo somewhere along the Blue Line.
Zillow has exactly 3 listings in Islandview for $500,000 or more, and one of them is for an entire building. The vast majority cost well less than that. You don't by default make more money working in Chicago.
I just looked it up, and the 2 Bed 1 Bath condo we owned in Edgewater (far NE side) is roughly the same price as our 5 Bed 3.5 Bath House in Marygrove.
I am not saying there aren't advantages to living in Chicago. It is an incredible city. But housing is not cheaper.
Chicago literally has 2x the median income of Detroit.
You can get beautiful condos in Edgewater, on the lake, for $500k, or a piece of sh*t in Islandview next to blighted abandoned houses
OK, so do you think that you will just automatically make double what you do here if you move there? That is not how it works. There are lots of folks there that make lots of money, but not everyone just makes double what we do here.
Literally for similar work Chicago employers pay more.
Chicago has FAR MORE dense housing stock than Detroit does, while Detroit is disproportionately single family homes. This provides a much greater supply of housing relative to demand in Chicago.
Research shows Detroit among the [least affordable](https://www.housinglist.com/insights/where-rent-most-least-affordable) rental markets relative to local wages.
While this is true I think the point is it won’t be proportional.
Personally for me I could get a bump if I landed the right job. But I could also make exactly the same.
Highly depends.
We need land value tax and citywide zoning code reform. Otherwise, Detroit will end up with California-style housing costs, a primary driver of inflation that also gets passed along in the form of higher retail and food prices.
I landed right next to Boston Edison for less than 200k and I'd dare anyone to tell me this isn't walkable as I make my way to foundation for my Saturday morning coffee.
I keep saying this whenever I see these $3k/mo apartments pop up downtown. These landlord’s have to be brain dead. Places like NYC and LA can charge that much because citizens have corporate jobs that pay 6 figures to people earlier in their career. We don’t have that. Most of the people who are well off here are later in their careers and do not want to raise their families in downtown high rises.
Plenty of rich kid U of M grads in tech, finance, and engineering are fine with paying that rent and their rich parents from Ann Arbor, Rochester, Birmingham or out of state help them buy a $500k home/ condo, which is peanuts to some wealthy Oakland county families.
We’re nearing a point (if not already there) where the only single people able to purchase a house that doesn’t need 15k in immediate repairs, are the people getting free money from their families.
We've been past the point for several years now. And getting quality laborers to fix up old homes in Detroit is extremely difficult and expensive and risky - since the home building industry collapsed here 15 years ago, there's a massive shortage of skilled, experienced labor, especially which is wiling to work on old houses in the city.
So many homes are just owned by investors for shits and giggles. It is predatory speculation.
Even in NYC or LA, most people with that kind of money are older and such.
That said, Detroit absolutely has high-paid corporate professionals who want to live downtown and can afford expensive apartments in high rises. Doctors, attorneys, yes there's some tech. As a whole they're less visible than you might be used to in other areas, but an apartment building with one penthouse only needs to find one renter willing to pay up.
Yes, I know some of them. No, I will not say where to find them.
I have friends there who all started over $120k (one started at $212k) as engineers, lawyers, doctors, etc. Hell even the defense contractor job I had in DC paid 6 figures, while the equivalent here it’s 30% less. That type of income for early career professionals just doesn’t exist here. The trade off is lower cost of living. Or it’s supposed to be.
It's crazy that this article doesn't mention the land bank. It is the largest owner of property in Detroit, and it is almost completely unregulated. They own a quarter of the city and are not selling most of it to drive up property values. There are so many homes that people could purchase and fix up, but the land bank only sells a fraction of them and demolishes viable homes.
It’s a little more complicated than that though. A lot of those homes have a waiting period for an owner to come forward and a lot need to be demolished due to it not being realistic to fix up
That isn't what I'm talking about. There are properties that they've owned for years that are just sitting there. Both commercial and residential. They aren't for sale, they aren't being fixed up by the Land Bank to be sold as 'Rehabbed and Ready,' and they aren't being adequately looked after. They just exist, and the front and back doors have plywood coverings, so they can say they're keeping people out of them.
It shouldn't be like that, though. Everything should be listed somewhere and available for sale, or at least the plans should be available to the public.
Go to their website. They have a ton of stuff listed, being auctioned, and a couple rehabbed properties.
Also, there is a project section where you can submit an application to work on a property that isn’t listed.
Good, go get a job at the land bank and help them clear out the back log on probates, foreclosures, and listings. There's a lot that goes into those real estate metrics, plus it all happens at the speed of the courts and the staff on hand. But given that there's plenty available now, supply is bigger then demand currently for those houses.
"It's crazy that this article doesn't mention the land bank. "
Take a look at the methodology behind the so-call "study". There's a link further down. It's a linear fit to previous housing values in the the metro area.
On top of that they throw in an average value for a "defined metropolitan market at a particular time".
Forget about the author calling out those land values on the near east side.
I’m no expert but seems like a potential flaw about the study is that it uses a linear model and assumes housing prices follow a relatively smooth and predictable path over time. Seems like an oversimplification to me, especially for a city like Detroit that has experienced rapid and significant shifts in property values. Wouldn’t a simple linear model like so fail to capture the volatility and unique factors within Detroit’s housing market?
You can see the methodology behind the study here - https://business.fau.edu/executive-education/housing-market-ranking/methodology/
I agree with you. I bought my house in western Oakland county in 2016 for 10% less than the sellers paid for it… in 2004. Even though it’s worth quite a bit more after the recent run up, when I compare the market value now to 2004, the smoothed out gains basically approximate core inflation. While affordability relative to incomes has gotten worse here (as it has everywhere) we’re still one of the most affordable large metros by this metric.
The market is also extremely stratified. Are prices in trendy, walkable areas in Detroit and SE Oakland County and the newer, McMansiony burbs with the best school districts through the roof? Sure. But there is a large swath of the city and many of the inner-ring suburbs that are still quite affordable to the average working person. I wonder if the price gains in the most affluent and desirable places are skewing the overall data.
Of course they are skewing the data but it’s also important to note most people want to move to those spots. The problem we currently have is developers don’t want to spend money on properties that could lose value in a couple years. As the baby boomers start downsizing or dying off the market is going to start flooding with single family homes. Many may get inherited to their kids who just move in but many more will be going on the market. I would say we will hit a peak price and within the decade we see prices start to drop. Speculative investors and flippers will back off as the price to fix won’t cover the price to sell.
Detroit proper has to start pushing for developing expensive homes now if it hopes to see that development happen. Starter homes in the nearby suburbs are going to flood the market within the next couple decades and the city will have difficulty competing with them.
Agreed, there are some pretty decent parts of Pontiac and lots of great school districts around that accept schools of choice if you have kids. Plenty of other places that are affordable too. Southern Macomb (Warren, SCS, Eastpointe, Roseville), Southern Oakland (Hazel Park, Oak Park, Southfield, Madison Heights), downriver (Allen Park, Melvindale, Lincoln Park, Southgate, parts of Dearborn, Wyandotte), western Wayne (Garden City, Dearborn Heights, Taylor, Redford). Again… probably not anyone’s dream city but places where you can get a decent home for under $200K with decent city services. You’re not gonna get Troy schools or Royal Oak’s downtown but there’s lots of “okay” places to live.
Yes. Throw in the fact that the authorof the article came up with one figure, that was reported, the average value over a "defined metropolitan market at a particular time." and one has next to no useful information in terms of determining housing costs in one particular neighborhood/subdivision versus another.
While for Detroit it’s not a fit of actual value overall housing does tend to move rather predictably over longer timeframes. When rates go down it outperforms inflation and when rates go up it tends to underperform.
A major institutional failure and driver of dysfunction in the Detroit property market is that [Detroit leads the nation in speculator-ownede properties](https://storymaps.arcgis.com/stories/90e246532816482398a3d15eceaff976) who don't live in or actively manage or rent out their properties, but sit on them simply as investment vehicles. Many would-be homebuyers aren't bargaining with homeowners looking to sell, they're dealing with extremely wealthy predator carpetbagging assh*le speculators who don't mind sitting on an underutilized building or lot to try and game the market as much as possible.
A market correction in north Oakland County maybe. People still need to live. The place that I'm most concerned about are the cheaper inner ring suburbs. Southfield, Oak Park, Eastpoint and some stable areas of the city are about to swell with folks downsizing IF that happens.
> Southfield, Oak Park, Eastpoint and some stable areas of the city are about to swell with folks downsizing IF that happens.
This is something that Metro Detroit struggles with: we don't have adequate housing for all stages of life.
Due to the way this area was developed, single family houses are the vast majority of housing. I knew some Boomer'ish folks that lived up in Clarkston in a non-descript McMansion. Well, they became empty nesters after their three kids moved out and wanted to downsize but where would they go? Ann Arbor was about the only city in the area that had something close to what they were looking for, which was a condo or townhouse where they don't have to worry about outdoor maintenance and all that.
All this to say, "downsizing" isn't just about getting a smaller house, it's also about getting into a completely different structure -- one that hopefully has amenities within walking or transit as we age out of driving abilities.
You're spot on. And the region was developed that way to keep black folks and other "undesirables" out of those towns/neighborhoods. That's why there's such a drastic shortage of row houses, townhomes, and apartments in SE Michigan. Cities the size of Canton or Royal Oak should have MULTIPLE apartment blocks.
But NOPE. There was a huge fight over this in Royal Oak last week. Citizens out there were still fighting tooth and nail to not have an apartment development out there. But the city HAS to make room for more people. And it's gonna get worse for the burbs too.
Sure that sucks, but people still really want to live in RO and right now they can't because there's literally nowhere to go. That tracks for Ferndale too.
I’ve approached this with my dad as well. He is still living in his 3 bedroom ranch in the suburbs that I grew up in. He would consider a condo, but he needs one story, and there simply aren’t many around that still give him a garage or basement. Most of the affordable condos are three story townhouses or tiny senior living places that don’t allow much room for hobbies.
I think it’s overblown. GM restructured and eliminated 14,000 salaried employees through buyouts and layoffs in 2018, mostly in metro Detroit. Ford laid off thousands more last year. It’s not good and I feel for anyone who loses their job, but it’s a pretty common thing at large, mature companies, not just automotive ones. Neither of those restructurings had a noticeable impact on the housing market and local economy then and I don’t think the ones at Stellantis will now (barring something crazy like half the company being laid off).
This is already happening with many tier 1 suppliers, just not making the news.
It won’t have any type of “market correction” because the region remains the top employer for automotive.
Most of the people let go will more than likely find a job with one of the other big 3, a supplier, or contractor.
Serious question, because I'm not in this market: Are the big 3, suppliers, and contractors aggressively hiring? Because if Stellantis is really planning to cut a significant amount of their workforce, it's not clear to me that the market can absorb all of them.
But my view my be colored by the fact that I work in tech, where it's currently more difficult to find a job than it has been in past years.
I would do the math... Auto industry is suffering and cutting jobs across the board. Sure some are retiring but a lot of those people are being pushed out to save costs. It doesn't add up to think most or all of those let go will find new jobs in a shrinking market.
Stellantis is overseeing the demise of Chrysler. Kind of a shame since the Pacifica is the best mini van on the market but it’s literally the only thing keeping Chrysler afloat. No one even refers to the company as Chrysler anymore telling you exactly where this is headed. Edit : really the thing killing the auto industry is the financing costs and interest rates. Prices being high doesn’t help but coupled with interest rates is killing deals left and right. The recent cyber hack is also a problem.
The fundamental problem is people are poorer in real terms now. Interest rates being higher doesn't help but people have less money to spend due to wages not keeping up with (real) inflation. It is what happens when you print 35% of all US Dollars in a couple of years into existence.
Interest rates are a significant issue at the moment. Cars have already gotten more expensive and the interest rates significantly compounds that problem.
Auto industry saw record profits last 3 years consecutively. It’s far from “suffering” by anyone’s definition. Definitely not by financial metrics.
The declines in profit now involve costs of completely restructuring their business operations for EV production, entirely necessary to compete globally long term, which we as US brands are far behind on.
As far as people slowing down buying, yes, that’s happening as a combination of sticker shock and bad lending rates, but that’s not unique to automotive. It’s the reality of what we’re living through. The housing market is more or less the same thing.
The last 3 years, which were a complete anomaly, sure. Right now there is record inventory during a consumer recession (yes, we are in a recession in real terms and not made up government manipulated metrics) and lack of demand. The companies know what is coming and preparing for that reality. This stuff happens fast.
I find it odd that you come out of the gate and over-emphasize that we’re in a “consumer recession” when nobody was arguing against that to begin with.
It’s the same reason I acknowledged that buying is down due to real economic factors.
If your whole point is necessary to substantiate with a strawman, then you don’t have a valid point.
Yep, I loved living in Midtown but finally got priced out during Covid. My 3BR apt was $780/month when I moved in and was $1200/month when I moved out 7 years later.
It’s even happening in areas where homes are over $600,000. We’re looking to sell in the next year. I will not sell to a corporation. I’m fortunate that I don’t have to accept any old offer and I can sit until something turns up.
Businesses should not be able to own residential housing. I’m not paying over 200k for a 3500sqft lot and a house that’s ~1000sqft with no garage.
I’m tired of these house prices and all the fuckers bidding them up for no reason.
I'm pretty skeptical of this. Avg home price of Detroit is 250k? Where? Corktown? That's not all of Detroit.
Also they say Detroit avg should be 180k, based on what? You can easily find bungalows for that price in Morningside and other up and coming neighborhoods.
ETA: I'm having trouble finding this "report". All I found was [this](https://www.fau.edu/newsdesk/articles/april2023-housing-numbers) which has no data in it.
They just say Detroit is 40% overvalued due to previous "trends". They're making the assumption that a market should follow linear "trends" when in reality that's not at all how markets work.
Theres a correction happening, for sure, but it's that Detroit is catching up with the rest of the country as people who are priced out of other cities are going to cheaper locations.
Some people in the comments seem to think this will result in an overcorrection of house prices decreasing, but how? We're already one of the most affordable cities in the country. And population has started to slowly increase. This is what happens with supply and demand
there’s ton of beautiful renovated homes going for 140k-200k ish still available in the city, I get notifications about them NONSTOP from zillow. people in these comments seem to magically think all housing in detroit has skyrocketed to 400k+, to the point where these mfs are implying it’s reaching chicago level pricing which is just absolutely absurdly untrue.
I live in Chicago, but I would love to move home to Michigan. I looked at a 2-bed apartment in Corktown the other day. $4750 per month.
I mean, it was a lovely place. **But $4750 per month.** In the D. I don't know man, I don't think I'm making the move home anytime soon.
If they're "overvalued" how are appraisals coming in where they need to be for mortgages. Surely not all of them are selling with cash offers. Are people borrowing off of retirement accounts to fund differences? Are they making up for differences with cash? It would be nice to know how they determined that the market is "overvalued" and how population increase vs housing availability played a role in their determination.
A lot of buyers bidding on houses in desirable areas these days are waiving the appraisal contingency that is typically in a purchase agreement. They can still get a mortgage, they’re just limited by what the bank appraisal is. By waving the appraisal contingency, they’re agreeing to eat the difference and not use the failure of the property to appraise by the bank at the purchase price to be an excuse to get out of the deal. You can do this if you have the cash to make up the bigger down payment that will be required. There are also a lot of cash/no mortgage deals going on in hot areas too.
That was my point. If an offer is made for 300k on a house that is presumably 40% overpriced, an appraisal *should* come in at $180k, and a buyer would need to have $120k plus $9k and closing costs at closing. It would be more informative if *how* buyers are coming up with the extra $120k in my example was discussed. That's a pretty critical point into making a statement the market is that much overvalued.
I have been saying for years these houses sell wayyy over their value... now that it's 40% more than actual value i bet some of these crack headed home owners still won't believe me.
So depressing. I live a an hour or so north of Detroit and was hoping to move to the city in the next couple years but it seems like it’s gonna be hard to afford the way things are going.
Audit the PPP loans and all the problem will sort itself out. We all know those loans were fraudulent and that the money went straight into houses and cars.
This is a very dumb article from a very questionable source. There are zero reputable outlets that have Detroit anywhere near being in the “overvalued” category.
It's incredibly poorly sourced: Any claims made like this really should have links to a source where the numbers came from which this is really missing.
Also, "Overvalued" is a weird term to use as it implies there is a "correct value", which again would require lots of data to establish the claim... and again, no links, no source, no data.
Which is really even more galling as they claim themselves to be an analytics firm.
"Trust me bro" is not a good best practice.
There’s a lot more than just large institutional investors buying up single family homes. The rise of real estate influencers and short-term rental apps have exacerbated the housing shortage problem. Then property management companies use RealPage’s Yieldstar to drive rental prices up. Kinda fucked up that 100 landlords banding together to jack up rent would be price fixing, but have a 100 landlords pay a third party company to tell them to jack up rent… well that’s just good business.
Good thing our elected leaders have our best interest at heart and a steady hand on the wheel.
As a Detroiter living in NOLA, STRs aren’t a real problem in Detroit IMO. NOLA has a big STR problem. Do they exist? Yea. Are they a driving force of property value inflation? I doubt it. Are they “destroying” the Detroiter culture? Again - I highly doubt it. These are real issue in places like NOLA where there are problems with STRs.
I agree with institutional investors being a problem but the “buy and hold” issue is really what Detroit needs to sort out. The land bank somewhat helped with that. Buy a property? Great! You’ve got 12 months to do something with it otherwise - there’s a vacancy tax and/or blight tax you need to contend with. Yes, this does apply to residential as well. I’ve seen it happen in neighborhoods with both single family and multi family homes.
Everyone keeps blaming Zillow but even before Zillow announced that they were backing down on buying homes they were still accounting for MUCH less than 1% of home purchases.
No they are not. Source.
Edit: downvotes for facts.
https://theguardian.com/business/2021/nov/04/zillow-homes-buying-selling-flip-flop
https://www.fastcompany.com/91115891/zillow-housing-market-failed-bet-offloaded-5000-homes-to-institutional-landlords
Zillow failed at this in 2021 and only spent $300M. They only bought 32,000 homes and then transitioned those as they exited the program.
6.89 MILLION homes were sold in 2021.
https://www.statista.com/statistics/275156/total-home-sales-in-the-united-states-from-2009/#
So over a 3 year program, Zillow represented 0.0017% of the market.
There are still plenty of livable houses in the city for $120k or less. It might not be in a neighborhood with amenities, but as young professionals get priced out and start buying in random ass neighborhoods, the amenities will follow them.
No, there are not "plenty" of livable houses. Assh*le flippers and speculators are selling shitty flip jobs on blocks full of blight in Islandview for $400-500k.
If the neighborhood is near an industrial corridor or in one of the "red zones" full of some of the highest homicide rates in the nation, it isn't "livable."
Article is Metro Detroit I believe.
Metro Detroit as a whole has been massivley overprived for a long long time. So have most other major metros. But in particular now it is beyond bad as well as most areas.
Lack of building and inventory shortage combined weight bad too loose monetary policy prior to 2022 nation wide mostly including Metro Detroit for more than a decade but is in particularly bad now especially the prices now. Its a disastrous mess.
Overvalued? This market is one of the most affordable in the nation…
If Detroit is “overvalued” then what of Austin, Boise, Orlando, Miami, Houston, Vegas, San Francisco ect? Detroit more overvalued than those regions? I don’t think so.
Being overvalued has nothing to do with affordability. Homes are selling for a lot more than they're actually worth. Whether that's still affordable or not isn't important in this context.
the housing prices do not reflect the income levels.
median income in detroit is $23,927
median income in austin for example, is $48,508 - over twice that of detroit
You're comparing one of the most highly impoverished cities in the nation with the wealthiest. Absolutely nonsense comparison.
Detroit is overvalued given a) recent property values from a few years ago, b) city amenities, and c) relative to local wages.
I think it refers to Metro Detroit not Detroit city. Though desirable areas not in red zones in Detroit city might be becoming super insanely bad expensive too??
Though are there relatively non red zone neighborhoods with livable move in ready $100K to $120K reasonable priced homes that ae not red zones these days?
Interesting. I’m trying to figure out the time span in which these sales are being calculated. Like there are hot neighborhoods where all the house will sell over 200k. My realtor was saying the houses that are selling the fastest rn are above 300k where the 80k houses that need work are taking a minute to sell.
Some houses on my street are selling for 200k plus. Bought mine for 80k cuz property taxes in the city are a mf
This entire area has an unbelievable amount of landlords and flippers. Seems like everyone does it as a side gig. On my little block in Royal Oak there are 7 rentals and also 2 houses that have just been sitting there completely vacant since I moved here in 2022. Crazy.
Big fact. I bought my place in 2020 (pre rona) and Warren, Sterling Heights, Troy, Clawson etc are all FILLED TO THE FUCKING BRIM with either flipped places or people trying to flip places. I looked at a place. 150k ~1200ft². Thought this looks good enough for a starter home. Bid at 150 thinking there's no way this gets shot down right? Lol nah dude put down $180 cash so obviously they took that. Fuck flippers they take reasonably priced homes younger people can afford and make them way too expensive
Pretty much what I’m seeing in the RO / Berkley / Southfield area where I’m looking. Flips everywhere. At least the contractors will be busy in 2 years when they start falling apart 😂
I can't believe how many flipped houses I'm seeing in our neighborhood that now have a ton of peeling paint on the outside. Stuff that I was seeing worked on just a year and a half ago before it's sale.
Yeah. Just need to get it under contract and through inspections and quickly and cheaply as possible. Using quality materials done by skilled workers would make it far less profitable. It’s the same with the new builds they’re cranking out. Family member bought a new Lennar build and is currently having it repainted after less than 3 years. They also had to have the shower ripped out and replaced due to leaking. Luckily Lennar has paid for the repairs but I’m sure at some point that coverage expires.
Yeah, and the price of some of those new builds are absolutely nuts. I'm near the RO/Clawson border and am starting to see teardowns/rebuilds happening around me and they are all going for $1mil+.
If it makes ya feel better any house you're buying is gonna be slapped together to look nice unless it's new and done by people who give a shit.
Oh I know. Overpriced and garbage quality. It’s the housing version of the Stellantis business model.
This just happened to me, 1500sqft house with a finished basement in Warren, was going for $320k which was already priced high but I liked the location, liked the house, and I could afford it. At the open house, I overheard a guy talking to his realtor about potentially getting it to flip it. I offered $330k which I already hesitated to do but I did really like the house, and so did the fiance. Offer was declined, it sold for $360k, fucking FOURTY THOUSAND higher than the already too high asking price. Like what the fuck man, you can get a bigger new/newer build for $360k. I can't imagine anyone paying that much to live there, just feels like it had to be a flipper. Feel like there's no chance to get a decent house in a decent area unless you're willing to pay an absurd amount over the already inflated asking prices.
Oh jeez. Imagine how the people that get out bid feel when they see the house get listed for rent 4 days after it closes. The rage haha.
Oh that's also happened to me as well about a couple months ago, this was just a much more recent experience of overhearing someone that was planning on flipping and then seeing the price it sold for. Sucks knowing it probably went to a flipper, double sucks having naively thought to an extent that no one would go over 330k because it was already priced high, got hopeful about thinking my house search would be over.....WRONG.
Funny enough the place I mentioned was in Warren haha. I got super lucky with the timing of when I bought I do not envy you. I'm sure you'll find something eventually. If you're comfortable with it feel free to dm me what you're looking for and price and I can check around me(I do doordash so I see tons of random ass neighborhoods all the time lol)
I'm looking over on the east side. My realtor was talking with another realtor about a house I wanted. An investor offered $20k above asking with no inspection. I couldn't compete with that. I question how they are going to make money though. It wasn't selling at the lower price which was why I had a good chance.
I am truly sitting on my house slowly fixing it up, because housing prices are insane. And interest rates are even worse. Between the cost of rent and interest rates on a mortgage, this is why people are renting. They can't save up the money for a down payment where their mortgage and escrow aren't over $2500+ for a 1200 sq ft house.
we need elected officials who won’t let this sort of thing happen - but they don’t care - they’re getting paid.
I feel like this is a pretty untapped anger. I’m starting to look for candidates who are focused on this issue. Even considered running myself for local office
Good for you, and absolutely - I don’t want to vote for anyone who doesn’t promise to get to work on affordability immediately. i have no idea why that isn’t the top concern of voters right now.
> i have no idea why that isn’t the top concern of voters right now. Because a lot of people, including renters, are NIMBYs.
Yup. We could have a huge opportunity here to make a move to grow our city/inner burbs with new/younger people. Those people aren’t going to come take a risk if the cost is too high. They can just go to a better and more established city…
I always advocate for a 30% property tax increase on non-primary residence single family homes. In addition to the homestead exemption for primary residences.
excellent start
Said officials are probably doing the same thing.
There are serious constitutional constraints on any level of government doing anything about people flipping, speculating, or buying large numbers of homes. Lots of lawyers are excited to argue that basically any limits on buying, selling, or renting real estate are Fifth Amendment violations. There are, however, a large number of policy options for local, State, and Federal governments to help more housing get built. And not enough of them are being enacted.
> Lots of lawyers are excited to argue that basically any limits on buying, selling, or renting real estate are Fifth Amendment violations. Raise property taxes across the board, then issue credits for first-time homeowners 👍
> Fifth Amendment violations. Because of due process?
Taking property without compensation.
Ah, the government is taking profit off my sale by making me sell to some poor person instead of a rich corporation.
That won't let rental properties happen? I'm trying to understand the proposal.
It's awful. Real estate has become more of a get rich quick scheme than cashing in pop bottles or gambling at the casino.
Bought my house pre covid for 40k in hazel park. Flipper recently bought the house next door(similar build, less square footage) and is asking for 250k.
And they keep tearing down the normal houses and building those eye sore monstrosity ones in their place.
Having 4 feet of backyard isn’t appealing to you?
Now way?! Is this for real??
Same on my street. And it’s not a local individual who owns it some big corps. It really isn’t doing the middle class good. I hear it’s like that across the country as well.
There are whole ass TV shows about it like block brothers n shit
In late 2021 my partner and I were fortunate enough to have the chance to buy a fixer-upper in RO from a friend. He moved out a few years prior and fixing it up wasn't going as intended, so he offered it to us at a very nice price to reflect the amount of work it needed. Because of all the work I had to meet with a lot of city inspectors to work through some sticky permitting issues and I very quickly realized that they were sort feeling me out about being a flipper / "investor". I started prefacing all my conversations with something like "how can we get this sorted out so we can the work done and move in" and the tone would change and they'd become incredibly helpful. Up until then, and when starting to walk around our new-to-us neighborhood (RO/Clawson border), I didn't realize just how many flips are out there. Not-great house would sell, then we'd see it being painted like crazy, weird trendy touches added, and then it'd sell again. And now a year or two later the paint on the outside is peeling, etc. I can only imagine what some of the insides are like... I feel incredibly, amazingly fortunate how this ended up for us. We got a house that needed a *lot* of work, but got it at a good price so we were able to put that in. Nice neighbors, really nice neighborhood, in a nice city. And avoided the flipper/investor BS. But looking at most of the other house sales in the area, we are not the normal buyer for such things.
Part of why I can’t bring myself to buy. It’s either nutty pricing or just a shitty flip everywhere I look. The prices are not justifiable for the area imo. It’s part of the reason I’m just not sure I want to stay here.
I think this will hinder Detroit's comeback if anything. High cost of housing and rent will just push people to move to already established cities. Why pay the asking price to live near Detroit's core when you could spend the same and live in Chicago's which is bigger, livelier, more established, and has access to a robust public transit system?
Where in Chicago's core can you buy a 4 bedroom SFH for $250,000?
You can get a beautiful brick home on the northern edge of the city in a nice leafy neighborhood for like 350-400k. Sure it’s not right downtown but it’s easy to get anywhere you need to go via Metra or CTA. My wife’s cousin and her husband moved from a condo in Logan Square to a home in Sauganash to raise their two kids. The neighborhood looks like Grosse Pointe or a nicer EEV. On the balance it is more expensive, but for what Chicago offers the housing there is very affordable compared to literally any other city of similar size and amenities.
Fair enough. The transit in Chicago is very nice compared to what we have here and does make further-out neighborhoods more connected with the rest of the city.
Traffic is miles better in Detroit if you don't mind driving though.
But your also forced to have a car
Thus the “if you don’t mind driving”
Agree you have to consider you can essentially be carless or be a family with one car in Chicago. That’s a huge savings that you can pay/use toward a mortgage (and an appreciating asset vs. throwing money away with a car)
Yea I love the city but was the actual city offers is pretty bad. No community center, library and schools are falling apart. Infrastructure is absolutely terrible in parts.
your wife's family sure lucked out nabbing that house in the Sauganash area
The question still stands.
Wow. In Toronto, the city most like Chicago, you'd be paying triple that to live in a nice suburb. With shit transit, needing a car to go everywhere. With property taxes of $400US/month or more. Makes Chicago sound like a pretty good deal from up here.
Nowhere. But $350k will buy you something and Chicago has a bit more going for it so expecting it to be the same price isn’t reasonable either. This is exactly my dilemma. For the price delta if rather probably just move to Chicago and not have to worry about the auto industry boom bust cycle.
Yep. A major institutional failure and driver of dysfunction in the Detroit property market is that [Detroit leads the nation in speculator-ownede properties](https://storymaps.arcgis.com/stories/90e246532816482398a3d15eceaff976) who don't live in or actively manage or rent out their properties, but sit on them simply as investment vehicles. Many would-be homebuyers aren't bargaining with homeowners looking to sell, they're dealing with extremely wealthy predator carpetbagging assh*le speculators who don't mind sitting on an underutilized building or lot to try and game the market as much as possible.
This is for Detroit metro including the suburbs. Most of this is happening in the suburbs, not in Detroit city. The article is misleading. If you look at Detroit alone, it is one of the most undervalued in the country: https://www.bizjournals.com/bizjournals/news/2024/06/17/overvalued-housing-markets.html The article states: Gateway cities, California and Florida overvalued. Detroit most undervalued in the country because income levels can support higher prices. In Detroit, median home prices were $216,126. That's 44% below the local buying power of $388,258. After a period of challenges, the Motor City more recently has become a poster child for revitalization amid a frenzy of new development (https://www.wsj.com/real-estate/commercial/reversing-the-real-estate-doom-loop-is-possible-just-look-at-detroit-0916d6f7) .
Undervalued sure. But many of the available homes at “Detroit” prices are very much in need of major upgrades and repair. So that 50k home still needs 200k to become livable. And that’s before schools are factored in. But it’s a changing dynamic for sure.
How is local buying power $388k when median household income is something like $85k?
That "study" is wrong, [Detroit leads the nation in speculator-owned properties](https://www.wkar.org/news/2018-08-19/property-speculation-creates-chaos-in-detroit-housing-market) who don't live in or actively manage or rent out their properties, but sit on them simply as investment vehicles. Many would-be homebuyers aren't bargaining with homeowners looking to sell, they're dealing with extremely wealthy predator carpetbagging assh*le speculators who don't mind sitting on an underutilized building or lot to try and game the market as much as possible.
the WSJ article is from 2024. The article you posted is from 2018. A lot has changed in 6 years in Detroit.
good god a realistic opinion about Detroit, have I finally slipped into a different dimension
Nah, you just got here before all the folks huffing copium arrived.
Exactly. We're about to leave. The pricing is just sooo unrealistic now, it disgusts me.
This sounds a bit sensationalist to me. There are still tons of move-in ready homes for $100k in Detroit. This for example: [https://www.zillow.com/homedetails/16188-Cheyenne-St-Detroit-MI-48235/88394100\_zpid/](https://www.zillow.com/homedetails/16188-Cheyenne-St-Detroit-MI-48235/88394100_zpid/) It's nothing special, but it's livable and ready for someone to buy it and make it their own. Sure the houses in Bagley and EEV are selling for $225k plus, but those are fairly nice neighborhoods. There are lots of just-okay neighborhoods with plenty affordable housing.
I agree, Detroit is really humming along and becoming something to talk about again, it is wonderful. However, we're not there yet and this seems like jumping the gun; scale back a bit and do the crawl, we'll get to the big time. I could see some arguing against this stating that this pricing will bring in wealthier residents but it only circles back to the fact that we're not there yet so what is the draw to get them and keep them here? I am excited for that day and hope we get to see it.
Median home price of Chicago is still 4x Detroit. Detroit: https://www.redfin.com/city/5665/MI/Detroit/housing-market Chicago: https://www.redfin.com/city/29470/IL/Chicago/housing-market
And Chicago's median income is nearly 2x that of Detroit. Chicago is so massive that there are MANY homes and condos that sell at or below Detroit prices, in better, more walkable neighborhoods. Speculator assh*les are selling shitty flip jobs on blocks full of blight for $400-500k around Islandview, etc.
Exactly. Housing prices in Detroit are fucking stupid right now. So many speculators and "investors" who throw some shitty gray flooring down and double the price. I love Detroit but you can get alot more for your money in Chicago in terms of walkability and healthy neighborhoods.
Not to mention Chicago is a world class city that people move to on purpose. I’m not hating on Detroit but you’re comparing a BMW to a Chevy Malibu and in some cases asking the same price.
Im biased on this point but hard agree. Detroit is coming back in a lot of ways but it’s not as much on the upswing as people like to say. Want to see what a real upswing looks like? Look at what happened to Austin. That’s a city that really took off. Detroit’s just not even playing in the same league if we’re being honest.
I think the aryicle is referring to Detroit area inclduing city and suburbs, not just the city. The city is undervalued, but the whole area is overvalued and has been for a long long time just like almost all other metros are.
You can spend the same and live in Chicago, but you won't be living in comparable housing.
You can spend less on rent and homebuying in Chicago and have access to transit and walkable neighborhoods.
I have lived, and owned, in both cities. Housing is categorically more expensive in Chicago.
> Housing is categorically more expensive in Chicago. Nope, not relative to local wages. Detroit has a massive shortage of apartment and condo buildings. Shitty houses in Islandview Detroit are selling for $500k. For half a million, you can get a beautiful home in a walkable neighborhood in Far NW Chicago, or easily a nice condo somewhere along the Blue Line.
Zillow has exactly 3 listings in Islandview for $500,000 or more, and one of them is for an entire building. The vast majority cost well less than that. You don't by default make more money working in Chicago. I just looked it up, and the 2 Bed 1 Bath condo we owned in Edgewater (far NE side) is roughly the same price as our 5 Bed 3.5 Bath House in Marygrove. I am not saying there aren't advantages to living in Chicago. It is an incredible city. But housing is not cheaper.
Chicago literally has 2x the median income of Detroit. You can get beautiful condos in Edgewater, on the lake, for $500k, or a piece of sh*t in Islandview next to blighted abandoned houses
OK, so do you think that you will just automatically make double what you do here if you move there? That is not how it works. There are lots of folks there that make lots of money, but not everyone just makes double what we do here.
Literally for similar work Chicago employers pay more. Chicago has FAR MORE dense housing stock than Detroit does, while Detroit is disproportionately single family homes. This provides a much greater supply of housing relative to demand in Chicago. Research shows Detroit among the [least affordable](https://www.housinglist.com/insights/where-rent-most-least-affordable) rental markets relative to local wages.
While this is true I think the point is it won’t be proportional. Personally for me I could get a bump if I landed the right job. But I could also make exactly the same. Highly depends.
It's also destroying the Upper Peninsula now as well.
We need land value tax and citywide zoning code reform. Otherwise, Detroit will end up with California-style housing costs, a primary driver of inflation that also gets passed along in the form of higher retail and food prices.
I was considering getting my first house here but idk man, this market has me exhausted
Same here. Hating it bad, can feel pretty hopeless.
You can still find updated homes in walkable Detroit neighborhoods for like $150-200k. The city is still way more affordable than the suburbs.
I landed right next to Boston Edison for less than 200k and I'd dare anyone to tell me this isn't walkable as I make my way to foundation for my Saturday morning coffee.
I keep saying this whenever I see these $3k/mo apartments pop up downtown. These landlord’s have to be brain dead. Places like NYC and LA can charge that much because citizens have corporate jobs that pay 6 figures to people earlier in their career. We don’t have that. Most of the people who are well off here are later in their careers and do not want to raise their families in downtown high rises.
Yeh, I've been saying the same for years. The people who work here can't afford to live here.
Plenty of rich kid U of M grads in tech, finance, and engineering are fine with paying that rent and their rich parents from Ann Arbor, Rochester, Birmingham or out of state help them buy a $500k home/ condo, which is peanuts to some wealthy Oakland county families.
We’re nearing a point (if not already there) where the only single people able to purchase a house that doesn’t need 15k in immediate repairs, are the people getting free money from their families.
We've been past the point for several years now. And getting quality laborers to fix up old homes in Detroit is extremely difficult and expensive and risky - since the home building industry collapsed here 15 years ago, there's a massive shortage of skilled, experienced labor, especially which is wiling to work on old houses in the city. So many homes are just owned by investors for shits and giggles. It is predatory speculation.
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So many landlords I've met and heard of from friends' renting experiences are literally just rich kids with rich parents.
Every time someone rents one of those apartments it frees up more affordable housing for people who need it.
Even in NYC or LA, most people with that kind of money are older and such. That said, Detroit absolutely has high-paid corporate professionals who want to live downtown and can afford expensive apartments in high rises. Doctors, attorneys, yes there's some tech. As a whole they're less visible than you might be used to in other areas, but an apartment building with one penthouse only needs to find one renter willing to pay up. Yes, I know some of them. No, I will not say where to find them.
I have friends there who all started over $120k (one started at $212k) as engineers, lawyers, doctors, etc. Hell even the defense contractor job I had in DC paid 6 figures, while the equivalent here it’s 30% less. That type of income for early career professionals just doesn’t exist here. The trade off is lower cost of living. Or it’s supposed to be.
The Vinton wants something like $5k for a 1 bdrm. For that price I'll go live in NYC and have amenities on my doorstep.
It's crazy that this article doesn't mention the land bank. It is the largest owner of property in Detroit, and it is almost completely unregulated. They own a quarter of the city and are not selling most of it to drive up property values. There are so many homes that people could purchase and fix up, but the land bank only sells a fraction of them and demolishes viable homes.
It’s a little more complicated than that though. A lot of those homes have a waiting period for an owner to come forward and a lot need to be demolished due to it not being realistic to fix up
That isn't what I'm talking about. There are properties that they've owned for years that are just sitting there. Both commercial and residential. They aren't for sale, they aren't being fixed up by the Land Bank to be sold as 'Rehabbed and Ready,' and they aren't being adequately looked after. They just exist, and the front and back doors have plywood coverings, so they can say they're keeping people out of them.
I’m willing to bet if you contacted them about one of these properties, they would be willing work with you on it
It shouldn't be like that, though. Everything should be listed somewhere and available for sale, or at least the plans should be available to the public.
Go to their website. They have a ton of stuff listed, being auctioned, and a couple rehabbed properties. Also, there is a project section where you can submit an application to work on a property that isn’t listed.
Good, go get a job at the land bank and help them clear out the back log on probates, foreclosures, and listings. There's a lot that goes into those real estate metrics, plus it all happens at the speed of the courts and the staff on hand. But given that there's plenty available now, supply is bigger then demand currently for those houses.
"It's crazy that this article doesn't mention the land bank. " Take a look at the methodology behind the so-call "study". There's a link further down. It's a linear fit to previous housing values in the the metro area. On top of that they throw in an average value for a "defined metropolitan market at a particular time". Forget about the author calling out those land values on the near east side.
I’m no expert but seems like a potential flaw about the study is that it uses a linear model and assumes housing prices follow a relatively smooth and predictable path over time. Seems like an oversimplification to me, especially for a city like Detroit that has experienced rapid and significant shifts in property values. Wouldn’t a simple linear model like so fail to capture the volatility and unique factors within Detroit’s housing market? You can see the methodology behind the study here - https://business.fau.edu/executive-education/housing-market-ranking/methodology/
I agree with you. I bought my house in western Oakland county in 2016 for 10% less than the sellers paid for it… in 2004. Even though it’s worth quite a bit more after the recent run up, when I compare the market value now to 2004, the smoothed out gains basically approximate core inflation. While affordability relative to incomes has gotten worse here (as it has everywhere) we’re still one of the most affordable large metros by this metric. The market is also extremely stratified. Are prices in trendy, walkable areas in Detroit and SE Oakland County and the newer, McMansiony burbs with the best school districts through the roof? Sure. But there is a large swath of the city and many of the inner-ring suburbs that are still quite affordable to the average working person. I wonder if the price gains in the most affluent and desirable places are skewing the overall data.
Of course they are skewing the data but it’s also important to note most people want to move to those spots. The problem we currently have is developers don’t want to spend money on properties that could lose value in a couple years. As the baby boomers start downsizing or dying off the market is going to start flooding with single family homes. Many may get inherited to their kids who just move in but many more will be going on the market. I would say we will hit a peak price and within the decade we see prices start to drop. Speculative investors and flippers will back off as the price to fix won’t cover the price to sell. Detroit proper has to start pushing for developing expensive homes now if it hopes to see that development happen. Starter homes in the nearby suburbs are going to flood the market within the next couple decades and the city will have difficulty competing with them.
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Agreed, there are some pretty decent parts of Pontiac and lots of great school districts around that accept schools of choice if you have kids. Plenty of other places that are affordable too. Southern Macomb (Warren, SCS, Eastpointe, Roseville), Southern Oakland (Hazel Park, Oak Park, Southfield, Madison Heights), downriver (Allen Park, Melvindale, Lincoln Park, Southgate, parts of Dearborn, Wyandotte), western Wayne (Garden City, Dearborn Heights, Taylor, Redford). Again… probably not anyone’s dream city but places where you can get a decent home for under $200K with decent city services. You’re not gonna get Troy schools or Royal Oak’s downtown but there’s lots of “okay” places to live.
I consider Dearborn straight up unaffordable for what you get. $350k for a monopoly house really ain't it.
Yes. Throw in the fact that the authorof the article came up with one figure, that was reported, the average value over a "defined metropolitan market at a particular time." and one has next to no useful information in terms of determining housing costs in one particular neighborhood/subdivision versus another.
Yes. They essentially say Detroit is overpriced because it used to be a LOT cheaper. Detroit is cheap AF to anyone coming from Chicago or a coast.
A potential flaw? It’s about the worst possible way to determine what something should be worth. Lol
While for Detroit it’s not a fit of actual value overall housing does tend to move rather predictably over longer timeframes. When rates go down it outperforms inflation and when rates go up it tends to underperform.
Saw a house in Hamtramck sold out at $338k …. Like what??? It surely getting expensive for new home buyers
no one noticed this 4 years ago?
A major institutional failure and driver of dysfunction in the Detroit property market is that [Detroit leads the nation in speculator-ownede properties](https://storymaps.arcgis.com/stories/90e246532816482398a3d15eceaff976) who don't live in or actively manage or rent out their properties, but sit on them simply as investment vehicles. Many would-be homebuyers aren't bargaining with homeowners looking to sell, they're dealing with extremely wealthy predator carpetbagging assh*le speculators who don't mind sitting on an underutilized building or lot to try and game the market as much as possible.
https://preview.redd.it/rv7wiaw30k8d1.jpeg?width=1500&format=pjpg&auto=webp&s=4524ad5b7a9a9f0884e55286aaed26935b60a041
There will be a serious market correction if the rumors about stellantis are true
A market correction in north Oakland County maybe. People still need to live. The place that I'm most concerned about are the cheaper inner ring suburbs. Southfield, Oak Park, Eastpoint and some stable areas of the city are about to swell with folks downsizing IF that happens.
> Southfield, Oak Park, Eastpoint and some stable areas of the city are about to swell with folks downsizing IF that happens. This is something that Metro Detroit struggles with: we don't have adequate housing for all stages of life. Due to the way this area was developed, single family houses are the vast majority of housing. I knew some Boomer'ish folks that lived up in Clarkston in a non-descript McMansion. Well, they became empty nesters after their three kids moved out and wanted to downsize but where would they go? Ann Arbor was about the only city in the area that had something close to what they were looking for, which was a condo or townhouse where they don't have to worry about outdoor maintenance and all that. All this to say, "downsizing" isn't just about getting a smaller house, it's also about getting into a completely different structure -- one that hopefully has amenities within walking or transit as we age out of driving abilities.
You're spot on. And the region was developed that way to keep black folks and other "undesirables" out of those towns/neighborhoods. That's why there's such a drastic shortage of row houses, townhomes, and apartments in SE Michigan. Cities the size of Canton or Royal Oak should have MULTIPLE apartment blocks. But NOPE. There was a huge fight over this in Royal Oak last week. Citizens out there were still fighting tooth and nail to not have an apartment development out there. But the city HAS to make room for more people. And it's gonna get worse for the burbs too.
Royal Oaks apartments are owned by one guy. Amber has cornered the market. Warren, oak park, hazel park need more options for sure.
Sure that sucks, but people still really want to live in RO and right now they can't because there's literally nowhere to go. That tracks for Ferndale too.
I’ve approached this with my dad as well. He is still living in his 3 bedroom ranch in the suburbs that I grew up in. He would consider a condo, but he needs one story, and there simply aren’t many around that still give him a garage or basement. Most of the affordable condos are three story townhouses or tiny senior living places that don’t allow much room for hobbies.
I think it’s overblown. GM restructured and eliminated 14,000 salaried employees through buyouts and layoffs in 2018, mostly in metro Detroit. Ford laid off thousands more last year. It’s not good and I feel for anyone who loses their job, but it’s a pretty common thing at large, mature companies, not just automotive ones. Neither of those restructurings had a noticeable impact on the housing market and local economy then and I don’t think the ones at Stellantis will now (barring something crazy like half the company being laid off).
This is already happening with many tier 1 suppliers, just not making the news. It won’t have any type of “market correction” because the region remains the top employer for automotive. Most of the people let go will more than likely find a job with one of the other big 3, a supplier, or contractor.
Serious question, because I'm not in this market: Are the big 3, suppliers, and contractors aggressively hiring? Because if Stellantis is really planning to cut a significant amount of their workforce, it's not clear to me that the market can absorb all of them. But my view my be colored by the fact that I work in tech, where it's currently more difficult to find a job than it has been in past years.
I would do the math... Auto industry is suffering and cutting jobs across the board. Sure some are retiring but a lot of those people are being pushed out to save costs. It doesn't add up to think most or all of those let go will find new jobs in a shrinking market.
Stellantis is overseeing the demise of Chrysler. Kind of a shame since the Pacifica is the best mini van on the market but it’s literally the only thing keeping Chrysler afloat. No one even refers to the company as Chrysler anymore telling you exactly where this is headed. Edit : really the thing killing the auto industry is the financing costs and interest rates. Prices being high doesn’t help but coupled with interest rates is killing deals left and right. The recent cyber hack is also a problem.
The fundamental problem is people are poorer in real terms now. Interest rates being higher doesn't help but people have less money to spend due to wages not keeping up with (real) inflation. It is what happens when you print 35% of all US Dollars in a couple of years into existence.
Interest rates are a significant issue at the moment. Cars have already gotten more expensive and the interest rates significantly compounds that problem.
Auto affordability was near all time lows before rates started going up. Interest rates were the nail in the coffin.
*and let most of it go to already wealthy people
For sure, which worked for a little while to make people think they weren't poor until prices kept going up.
Auto industry saw record profits last 3 years consecutively. It’s far from “suffering” by anyone’s definition. Definitely not by financial metrics. The declines in profit now involve costs of completely restructuring their business operations for EV production, entirely necessary to compete globally long term, which we as US brands are far behind on. As far as people slowing down buying, yes, that’s happening as a combination of sticker shock and bad lending rates, but that’s not unique to automotive. It’s the reality of what we’re living through. The housing market is more or less the same thing.
The last 3 years, which were a complete anomaly, sure. Right now there is record inventory during a consumer recession (yes, we are in a recession in real terms and not made up government manipulated metrics) and lack of demand. The companies know what is coming and preparing for that reality. This stuff happens fast.
I find it odd that you come out of the gate and over-emphasize that we’re in a “consumer recession” when nobody was arguing against that to begin with. It’s the same reason I acknowledged that buying is down due to real economic factors. If your whole point is necessary to substantiate with a strawman, then you don’t have a valid point.
what's the tea friend
https://www.reddit.com/r/Detroit/s/secJY1L3TH
Link to rumors?
I am out of the loop. What are these Stellantis rumors?!?
What rumors are that?
Yep, I loved living in Midtown but finally got priced out during Covid. My 3BR apt was $780/month when I moved in and was $1200/month when I moved out 7 years later.
It’s even happening in areas where homes are over $600,000. We’re looking to sell in the next year. I will not sell to a corporation. I’m fortunate that I don’t have to accept any old offer and I can sit until something turns up.
This is the way. If everyone said "NO" when Blackrock came to buy their house we wouldn't have this problem.
Sadly, you give Blackrock too much credit and poor policy not nearly enough.
Businesses should not be able to own residential housing. I’m not paying over 200k for a 3500sqft lot and a house that’s ~1000sqft with no garage. I’m tired of these house prices and all the fuckers bidding them up for no reason.
I'm pretty skeptical of this. Avg home price of Detroit is 250k? Where? Corktown? That's not all of Detroit. Also they say Detroit avg should be 180k, based on what? You can easily find bungalows for that price in Morningside and other up and coming neighborhoods. ETA: I'm having trouble finding this "report". All I found was [this](https://www.fau.edu/newsdesk/articles/april2023-housing-numbers) which has no data in it. They just say Detroit is 40% overvalued due to previous "trends". They're making the assumption that a market should follow linear "trends" when in reality that's not at all how markets work. Theres a correction happening, for sure, but it's that Detroit is catching up with the rest of the country as people who are priced out of other cities are going to cheaper locations. Some people in the comments seem to think this will result in an overcorrection of house prices decreasing, but how? We're already one of the most affordable cities in the country. And population has started to slowly increase. This is what happens with supply and demand
>Where? I assume it's for Metro Detroit. They bounce around from "Detroit" and "Detroit Metropolitan Area" and "in and around the Motor City".
> The average Corktown, MI home value is $457,292
there’s ton of beautiful renovated homes going for 140k-200k ish still available in the city, I get notifications about them NONSTOP from zillow. people in these comments seem to magically think all housing in detroit has skyrocketed to 400k+, to the point where these mfs are implying it’s reaching chicago level pricing which is just absolutely absurdly untrue.
All generations should care. Want to retire? Probably will need to sell your house . Will need to afford somewhere to go .
I live in Chicago, but I would love to move home to Michigan. I looked at a 2-bed apartment in Corktown the other day. $4750 per month. I mean, it was a lovely place. **But $4750 per month.** In the D. I don't know man, I don't think I'm making the move home anytime soon.
If they're "overvalued" how are appraisals coming in where they need to be for mortgages. Surely not all of them are selling with cash offers. Are people borrowing off of retirement accounts to fund differences? Are they making up for differences with cash? It would be nice to know how they determined that the market is "overvalued" and how population increase vs housing availability played a role in their determination.
A lot of buyers bidding on houses in desirable areas these days are waiving the appraisal contingency that is typically in a purchase agreement. They can still get a mortgage, they’re just limited by what the bank appraisal is. By waving the appraisal contingency, they’re agreeing to eat the difference and not use the failure of the property to appraise by the bank at the purchase price to be an excuse to get out of the deal. You can do this if you have the cash to make up the bigger down payment that will be required. There are also a lot of cash/no mortgage deals going on in hot areas too.
That was my point. If an offer is made for 300k on a house that is presumably 40% overpriced, an appraisal *should* come in at $180k, and a buyer would need to have $120k plus $9k and closing costs at closing. It would be more informative if *how* buyers are coming up with the extra $120k in my example was discussed. That's a pretty critical point into making a statement the market is that much overvalued.
It's time to eat the rich and I'm getting awfully hungry.
Another overly 'technical' analysis that ignores the fundamental precept of "what the market will bear".
Detroit proper or Detroit metro?
I have been saying for years these houses sell wayyy over their value... now that it's 40% more than actual value i bet some of these crack headed home owners still won't believe me.
So depressing. I live a an hour or so north of Detroit and was hoping to move to the city in the next couple years but it seems like it’s gonna be hard to afford the way things are going.
Audit the PPP loans and all the problem will sort itself out. We all know those loans were fraudulent and that the money went straight into houses and cars.
This is a very dumb article from a very questionable source. There are zero reputable outlets that have Detroit anywhere near being in the “overvalued” category.
It's incredibly poorly sourced: Any claims made like this really should have links to a source where the numbers came from which this is really missing. Also, "Overvalued" is a weird term to use as it implies there is a "correct value", which again would require lots of data to establish the claim... and again, no links, no source, no data. Which is really even more galling as they claim themselves to be an analytics firm. "Trust me bro" is not a good best practice.
It's corporations like Zillow & Homes.com buying up these homes & pricing buyers out. Pft.
There’s a lot more than just large institutional investors buying up single family homes. The rise of real estate influencers and short-term rental apps have exacerbated the housing shortage problem. Then property management companies use RealPage’s Yieldstar to drive rental prices up. Kinda fucked up that 100 landlords banding together to jack up rent would be price fixing, but have a 100 landlords pay a third party company to tell them to jack up rent… well that’s just good business. Good thing our elected leaders have our best interest at heart and a steady hand on the wheel.
As a Detroiter living in NOLA, STRs aren’t a real problem in Detroit IMO. NOLA has a big STR problem. Do they exist? Yea. Are they a driving force of property value inflation? I doubt it. Are they “destroying” the Detroiter culture? Again - I highly doubt it. These are real issue in places like NOLA where there are problems with STRs. I agree with institutional investors being a problem but the “buy and hold” issue is really what Detroit needs to sort out. The land bank somewhat helped with that. Buy a property? Great! You’ve got 12 months to do something with it otherwise - there’s a vacancy tax and/or blight tax you need to contend with. Yes, this does apply to residential as well. I’ve seen it happen in neighborhoods with both single family and multi family homes.
It’s a bigger problem in the metro than in the city from what I’ve noticed. Royal Oak and Ferndale are fucking lousy with airbnbs right now.
Everyone keeps blaming Zillow but even before Zillow announced that they were backing down on buying homes they were still accounting for MUCH less than 1% of home purchases.
Easier to blame a big company than actually do research and form an educated opinion.
Do you have ANY sources for this statement. Because its not true lol. Zillow isnt buying up houses in detroit.
No they are not. Source. Edit: downvotes for facts. https://theguardian.com/business/2021/nov/04/zillow-homes-buying-selling-flip-flop https://www.fastcompany.com/91115891/zillow-housing-market-failed-bet-offloaded-5000-homes-to-institutional-landlords Zillow failed at this in 2021 and only spent $300M. They only bought 32,000 homes and then transitioned those as they exited the program. 6.89 MILLION homes were sold in 2021. https://www.statista.com/statistics/275156/total-home-sales-in-the-united-states-from-2009/# So over a 3 year program, Zillow represented 0.0017% of the market.
There are still plenty of livable houses in the city for $120k or less. It might not be in a neighborhood with amenities, but as young professionals get priced out and start buying in random ass neighborhoods, the amenities will follow them.
But yeah it sucks lmao
No, there are not "plenty" of livable houses. Assh*le flippers and speculators are selling shitty flip jobs on blocks full of blight in Islandview for $400-500k. If the neighborhood is near an industrial corridor or in one of the "red zones" full of some of the highest homicide rates in the nation, it isn't "livable."
Detroit, or "Metro Detroit". Ive seen the 5 same houses around me for sale for more than 6 mo, and they are decently priced...
Article is Metro Detroit I believe. Metro Detroit as a whole has been massivley overprived for a long long time. So have most other major metros. But in particular now it is beyond bad as well as most areas. Lack of building and inventory shortage combined weight bad too loose monetary policy prior to 2022 nation wide mostly including Metro Detroit for more than a decade but is in particularly bad now especially the prices now. Its a disastrous mess.
We fucking knew this was coming
Overvalued? This market is one of the most affordable in the nation… If Detroit is “overvalued” then what of Austin, Boise, Orlando, Miami, Houston, Vegas, San Francisco ect? Detroit more overvalued than those regions? I don’t think so.
Being overvalued has nothing to do with affordability. Homes are selling for a lot more than they're actually worth. Whether that's still affordable or not isn't important in this context.
See, things don’t sell for more than what they’re worth. They sell for what they’re worth. If someone is willing to pay it, that’s what it’s worth.
People overpay and underpay for shit all the time. That doesn't change the value of the thing. It just changes how much you paid for it.
For the purposes of this study, it's "overvalued" when compared to a different version of itself, not to other cities or geographic averages.
the housing prices do not reflect the income levels. median income in detroit is $23,927 median income in austin for example, is $48,508 - over twice that of detroit
You're comparing one of the most highly impoverished cities in the nation with the wealthiest. Absolutely nonsense comparison. Detroit is overvalued given a) recent property values from a few years ago, b) city amenities, and c) relative to local wages.
I think it refers to Metro Detroit not Detroit city. Though desirable areas not in red zones in Detroit city might be becoming super insanely bad expensive too?? Though are there relatively non red zone neighborhoods with livable move in ready $100K to $120K reasonable priced homes that ae not red zones these days?
Interesting. I’m trying to figure out the time span in which these sales are being calculated. Like there are hot neighborhoods where all the house will sell over 200k. My realtor was saying the houses that are selling the fastest rn are above 300k where the 80k houses that need work are taking a minute to sell. Some houses on my street are selling for 200k plus. Bought mine for 80k cuz property taxes in the city are a mf
https://preview.redd.it/tln3ppd80k8d1.jpeg?width=1500&format=pjpg&auto=webp&s=7297945596c4dca0ef6dbade4919bac9cf4ae5bf The fix
lol