Detroit Real Estate Market 2021

Detroit Real Estate Market Trends & Statistics 2021

In this section, you’ll learn about the top three factors that make Detroit one of the strongest real estate markets today, including affordable home prices, strong monthly rental income, and equity growth potential. Explore Detroit’s housing market, population, and employment trends in the tabs to learn more.

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Data Sources:

• https://www.zillow.com/
• https://factfinder.census.gov/
• https://www.deptofnumbers.com/
• RealWealth Property Team Data

Detroit is more affordable than most other U.S. markets today.

• In 2020, the median price of homes in the Detroit metro area was $188,000. This is 26% lower than the national average of $254,000.
• However, in neighborhoods where RealWealth members invest the median price homes in 2020 was only $97,500. This is 62% lower than the national average.
• This shows us that real estate in Detroit is more affordable than many other U.S. markets today. This is especially true in the Detroit neighborhoods where RealWealth members are investing today.

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It’s possible to generate more monthly rental income in Detroit than many other U.S. cities today.

• In 2020, the median monthly rent for average homes in Detroit was $1,255, which is 0.67% of the purchase price of $188,000. This is just lower than the national purchase-to-rent ratio of 0.68%.
• That said, in the Detroit neighborhoods where RealWealth members invest the median monthly rent for average homes was $1,075 in 2020. This is 1.10% of the purchase price, which is 62% higher than the national average.
• This shows us that, in some Detroit neighborhoods, there’s a strong opportunity to generate rental income at a significantly higher rent-to-purchase ratio than the national average.

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Detroit home values have been appreciating quickly.

• In January 2014 median price of average homes in Detroit was $127,087. This means that, in the last 6 years (2014 to 2020), average homes in Detroit have appreciated by a whopping 48%. This is 32% faster appreciation than the national average.

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The median monthly rent in Detroit has been rising consistently over the last six years.

• Between 2014 and 2020, the median rent for average homes in Detroit increased by 21%, which is below the national average of 23% during this period.
• Although Detroit rents have risen more slowly than the national average, they have been rising consistently year over year. This is a good sign for investors looking to invest in a market that’s growing steadily, making it likely more stable.

Detroit’s population has been growing very slowly.

 

• Since 2010, Detroit’s population has only increased 0.66%. During the same period the national population grew by 6%.
• Despite very slow growth, the Detroit metro still outperforms similar markets at attracting educated millennials; this is likely due to a number of research universities in the area, including Wayne State University.
• Detroit also has a few billionaires on their side, including Dan Gilbert (Quicken Loans CEO) and Mike Ilitch (Owner of Little Caesars Pizza Chain, the Detroit Red Wings, and the Detroit Tigers) who have pledged over $4 billion to help with the city’s revitalization efforts.
• All this attention from millennials and billionaires is a good sign that future growth in Detroit is possible.

Detroit is creating jobs, but not as many as other markets.

• In the past year, the number of jobs in Detroit decreased by 9.86% due to COVID-19. This is slightly higher than the U.S. annual job loss rate of 6% in 2020.
• Despite very slow/ negative growth, the Detroit metro still outperforms similar markets at attracting educated Millennials to their workforce. Likely this is due to a number research universities in the area, including Wayne State University.

Detroit is Very Affordable

• In the Detroit neighborhoods where RealWealth members invest the median price of average homes in 2020 was only $97,500. This is 62% lower than the national average.
• This shows us that real estate in Detroit is more affordable than many other U.S. markets today. This is especially true in the Detroit neighborhoods where RealWealth members are investing today.

Detroit has Strong Rental Income Opportunities

• In the Detroit neighborhoods where RealWealth members invest, the median monthly rent for average homes was $1,075 in 2020. This is 1.10% of the purchase price, which is 62% higher than the national average.
• This shows us that, in some Detroit neighborhoods, there’s a strong opportunity to generate rental income at a significantly higher rent-to-purchase ratio than the national average.

Detroit is Rapidly Appreciating

• In 2014, the median price of average homes in Detroit was $127,087. This means that, in the last 6 years (2014 to 2020), average homes in Detroit have appreciated by a whopping 48%. This is 32% faster appreciation than the national average.
• During the same period, the average rent for homes in Detroit increased by 21%, which is just below the national average of 23% during the same period. Although Detroit rents rose more slowly than the national average, they have been rising consistently year over year. This is a good sign for investors looking to invest in a market that’s growing steadily, making it likely more stable.
• This shows us that there’s a strong opportunity for equity growth and increased income potential over time in the Detroit area.

Millennials & Billionaires Love Detroit

• Despite very slow population and job growth overall, Detroit has been attracting more educated Millennials than similar cities across the nation.
• Plus, with investors like Dan Gilbert investing billions in redevelopment and corporate expansion, future growth in Detroit seems likely.