Detroit’s economy is finally showing signs of improvement, and these positive signs are beginning to trickle down to the city’s housing market.
According to MLive.com, a first-quarter market report from the Southeast Michigan Council of Governments (SEMCOG) shows that homes in Metro Detroit are now selling in less than two months, which marks a considerable improvement from just a few years ago.
In the past three months, sales of existing houses throughout Detroit have increased by about 7%. This coincides with a 7% increase in new construction during 2015, which has paid off over the long-term for Detroit realtors and homeowners.
Michael Stoskopf, president of the Home Builders Association of Southeast Michigan, believes that the unseasonably warm winter is partially to thank for the increase in building activity. Michigan’s unemployment rate also plummeted to just 4.8%, which enabled more people to invest in a home.
“We had the highest two-month total to start a year since 2006,” said Stoskopf.
The SEMCOG report revealed that Metro Detroit was the big winner among all other communities in Monroe, Washtenaw, and Livingston Counties. Detroit currently boasts 913 brand new apartment units constructed in the past year, which is more than double what second-place Ann Arbor has built.
While only about 10% of Millennials looking to purchase a home would prefer to live in a metro area, this is not the case for apartment hunters. Young professionals in search of affordable housing often end up in Detroit due to its convenient location and growing economy.
“Gains continued in apartment construction due to pen-up demand for rental housing from young professionals and downsizing households, low vacancy rates, and a growing job market,” the SEMCOG report explained.
Apartments in Detroit are certainly in high-demand, but the city is also exceeding expectations when it comes to home sales. As Crain’s Detroit reported, the for-sale inventory of metro region homes has fallen by about 16.3% since 2013. This has resulted in an 85% increase in the median sales price of Detroit homes.
“Detroit has been the winner,” said David Crowe, chief economist for the National Association of Home Builders. “It’s had the greatest percentage change in total single family permits and total jobs.”
Approximately 11,098 properties throughout Metro Detroit have already changed hands in the first quarter of 2016, and local Realtors expect this trend to continue moving forward.
