A Surprising Comeback: Detroit Suburbs See Upsurge In Housing Market
The housing market, especially amidst the government shutdown, is looking quite glum for prospective Black homeowners, as MN reported. But the suburbs in Detroit just might be the exception. With rising home sales, the real estate market is looking quite promising, The Wall Street Journal reports.
With the recession bringing home values down 36 percent, Detroit is finally emerging out of their housing slump. Median home prices leaped 48 percent and the number of sales jumped seven percent, according to 2012 figures from Realcomp.
“It’s like someone turned off the water five years ago and just turned it back on,” said John Hannett, a real-estate agent said of the sudden uptick in Detroit real estate.
It’s quite a conundrum since the Detroit’s housing improvement doesn’t reflect the city’s recent filing for Chapter 9 municipal bankruptcy. “Increasingly, it’s a tale of two Detroits, the beleaguered city in bankruptcy court with few jobs and abundant vacant property, and the larger metropolitan region bouncing back gradually with falling unemployment and rising home sales,” the WSJ adds.
Illustrating the impact of an increasingly improving industry, real estate agent Pat Chasteen of Monaghan GMAC notes that she now needs to get her clients to view a dwelling the day it lists since homes are selling so quickly in Detroit. “She spent nearly every night last week closing deals and met her first client Friday at 6:30 a.m,” The Wall Street Journal says.
But while sales are up, Detroit’s housing market, which is still 28 percent below pre-recession levels, still needs some progress. Foreclosures still plague the city; nearly 18,000 homes were put up for auction this fall due to the owners’ failure to pay taxes. Only 880 were sold so far. “Critics say the massive auction keeps real-estate prices in the city low. And new buyers often fail to pay taxes, pushing the properties back into tax foreclosure, said the county’s chief deputy treasurer, David Szymanski,” the article notes.
Not only are prospective buyers are often turned off by sky high taxes, but also shoddy public schools, poor public safety and concerns about additional financing due to overvalued property.
Still, the city’s rising home prices are attracting some new investors and Detroit might see a continued upsurge in the real estate industry. “We have a long way to go, but I think we’re starting to turn a corner,” concluded Brian Parthum, economic analyst at the Southeast Michigan council.