The Detroit real estate market in 2020 will be much different from the ups and downs that marked the past 10 years, say area Realtors.
It will be different by holding steady.
The past 10-12 years have been somewhat of a roller coaster for the city, with mortgages numbering above 2,200 the year prior to the Great Recession and then bottoming out to less than 250 in 2012, the year before the largest municipal bankruptcy in the history of the United States.
And then there was the upswing, with more renderings being announced for greater downtown than construction crews could catch up to. Last year the city reached 1,000 mortgages for the first time in 10 years, generating headlines for the accomplishment. (Of course, the city drew headlines for different reasons this year, too, when a Detroit Free Press analysis revealed that nearly half of the mortgages awarded as recently as 2017 were awarded to white people, this being in a city that is more than 80 percent Black.)
Area Realtors are predicting that 2020 will be the year when the real estate market holds steady, with no major swings in either direction. And steady is notable when compared to the last dozen years or so.
“I feel like 2019 is the first year that I’ve been doing this where it’s functioned almost like a normal market, and I’ve been doing this for 15 years,” says Ryan Cooley, owner of O’Connor Real Estate.
“Of course there are different pockets that are hotter than others but there’s nothing flying up too crazy.”
The Livernois corridor
While it’s the businesses that have shouldered much of the pain of a months-long streetscape construction along the Avenue of Fashion, the Realtors we spoke to seem to share the city’s thinking that the inconveniences of construction will beget a more robust corridor, from which both commercial and residential markets stand to benefit.
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The Livernois corridor between Six and Eight miles is an area to watch, local Realtors say.“I think one area to really watch in 2020 is the Livernois corridor between Six and Eight Mile roads. That commercial district really is one to watch. The city has made some major infrastructure improvements and they’re looking really good,” says Austin Black II, Realtor, founder, and president of City Living Detroit.
“It will be interesting to see what new businesses will open in the area. It could have a transformative effect on the neighborhoods around it.”
A licensed Realtor for over 25 years with a Master of Planning degree from the University of Michigan, Perrin T. Emanuel has been with Reach Realty Group since 2017. Emanuel agrees that Detroit’s reinvesting in its commercial corridors will foster healthier neighborhoods, taking advantage of the development boom happening in the city’s greater downtown and spreading it out around the city.
“We’re trying to keep Detroit from becoming a tale of two cities. A lot of neighborhoods are waiting for that next wave of development to catch up to them,” Emanuel says.
“Reinvestment in the commercial corridors helps sell the neighborhoods, and especially if the buyer is not from the area. Because then we don’t have to just talk about the house but also everything going on around it.”
Russell Woods and Highland Park
Not much farther down Livernois Avenue is Russell Woods, an area roughly located between Clements Street and Sturtevant Avenue to the north and the south, and Livernois and Dexter avenues to the west and east, respectively.
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With its brick homes and park, Russell Woods has been piquing Realtors' and buyers' interest.
It, too, is one of those neighborhoods identified as one to watch by our Realtors, though not necessarily for its bustling streetscapes.
“We’re starting to see six-figure homes popping up in Russell Woods when we couldn’t sell there two years ago,” Emanuel says.
“With homes in Boston Edison reaching $200,000 to $300,000 — and I’m not talking about the mansions but the more modest homes west of the Lodge — we’re seeing that people are moving further west. They have beautiful brick colonial homes with a nice park there as an anchor.”
With buyers priced out of attractive neighborhoods that were attainable just a few years ago, adjacent neighborhoods with quality housing stock minus the name-brand appeal, so to speak, increasingly become an option.
Cooley sees the same thing happening along the Woodward corridor. Though it may not receive the attention of its neighbors Detroit and Hamtramck, Highland Park is increasingly becoming an option for would-be homebuyers.
“What stands out to me is how many houses we’re showing in Highland Park, which was never the case before. It has to do with price points and quality of housing stock. With the Woodward corridor itself, there hasn’t been a lot of activity lately due to higher and higher prices along the corridor, which squeezes the market into Highland Park,” Cooley says.
“In the last 10 years, I don’t know if I’ve sold one house in Highland Park. It’s only been recently.”
Holding steady
Many of the neighborhoods mentioned in our previous list of trending real estate markets remain at the top of Realtors’ lists. These include East English Village, Bagley-Fitzgerald, and Grandmont-Rosedale among them.
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Bagley, located right off Livernois, continues to be an attractive neighborhood for potential homebuyers.The reasons remain the same. Quality housing stock. Affordability. Attractive neighborhoods. Prospective buyers approach an agent with a price point and the Realtor finds the houses that they can afford.
The rental market remains strong, with investors purchasing homes for below $100,000 and renting them out in the $650- $850 range, says Emanuel.
And Cooley acknowledges “flippers,” a group sometimes maligned, for fixing up homes and putting them back on the market. Buyers want move-in ready homes, he says, and banks are much more likely to lend money toward their purchase.
In the greater downtown, Black hopes to see some more of the big development projects announced over the past several years come to fruition. More construction changes perceptions of value, he says.
Amid the development boom downtown, there has been a drop among younger would-be homebuyers in the area.
“The 20- and 30-year-olds are not buying in the greater downtown at the same rate as they used to compared to 10 years ago,” says Black, who has been practicing real estate in the city for more than 14 years.
“We’ve already seen that group leave the downtown and Midtown markets. Instead, they’re choosing neighborhoods throughout the city.”