Detroit’s Real Estate Comeback

fter fighting back from the brink, Detroit’s real estate market looks to be not only surviving, but thriving and picking up steam.

If some of the so-called experts are right, Detroit is fast becoming a real estate investment hotbed and primed for an upwards explosion of home prices.

Median home prices in the city rose faster than any of the other 146 metropolitan areas tracked by Realtor.com. Further, Detroit’s average listing prices in April are up more than 5 percent, compared to March and up 7.6 percent compared with the year before. In fact, home prices in Detroit have now gained every month since last December. Here’s a quote from Forbes.com detailing the resurgence:

“Continuing affordable home prices, combined with low mortgage rates, are steadily reducing the glut of houses sitting for sale in Detroit – and represent a key factor pushing prices up.  The total inventory of homes for sale has plunged 25 percent in the past 12 months, and the median “age” – the time the inventory has been sitting on the market  – has shrunk to just 48 days, ranking it 8th among the 146 markets. In terms of inventory age, Detroit now ranks with economically robust cities like Washington D.C., Seattle and San Jose.”

A big part of The D’s real estate comeback has been the presence of foreign investors, especially those from Dubai, who have been snapping up homes on sale for as low as $1, according to MSNBC.com. Real estate agents say investors are buying up to 1,000 homes per transaction in metro Detroit.

In addition to the low cost of homes in the city, mortgage interest rates have also hit their lowest levels ever the past couple weeks. Mortgage rates have matched or hit a new all-time low for 10 of the past 11 weeks, according to mortgage giant Freddie Mac.

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