Real Estate Still Cheap in Detroit, But That Won’t Last

April 17th, 2014 – in market trends

Despite Detroit having some the highest rates of foreclosure and unemployment in the United States, large corporations are seeing opportunity in the Motor City. And the right Real Estate organization software may help Realtors and their clients zero in on these trends.

In February, "The New York Times" reported an "unlikely land rush ... where investors from around the world are scrambling to buy vacant properties at the bottom of a historically distressed market." The savings can be steep. In Detroit, the discount on a foreclosed property can be a staggering 72 percent less than normal homes, according to RealtyTrac's 2013 U.S. Residential and Foreclosure Sales Report.

Detroit’s empty buildings have lured buyers from all over, from the Chinese firm that last year bought the David Stott Building and the former Detroit Free Press headquarters for a combined $13.6 million, to individual European and Asian investors purchasing derelict properties for less than $1,000 each.

Foreign investment in Detroit is already having an impact. The reduced inventory of cheaper properties has caused a 39-percent increase in home values as of December. Since higher property values makes it easier for homeowners to refinance, the trend points to a stabler housing market with fewer foreclosures. And with medium home values under $100,000 in many neighborhoods, Detroit may be the perfect opportunity for developers.

Author: Steve Simmons