Detroit house prices are starting to fire up their engines again in 2016, as the housing market picks up momentum.
Still among the cheapest places in the USA to buy a house, Detroit neighbourhoods are seeing prices move up on most residential blocks with substantial gains in the strongest areas, report estate agents and brokers.
Local experts say the prices in neighbourhoods are rising because investors with cash are purchasing more houses and some are investing in refurbishments, which makes the streets and areas more attractive to other investors.
This coupled with significant investment across the city is starting to change the face of Detroit, as well as boosting capital growth for those who have already purchased in the area after years of rock-bottom prices.
Sentiment in the motor industry is also improving, with GM announcing at the end of 2015 they were investing $245 million into the Metro Detroit plant, and Chinese development firm DDI Group have bought three downtown buildings, including the original Detroit Free Press building, for $16.4 million, and is actively scouting further investment in the city. Chrysler added offices downtown, and Fifth Third Bank Eastern Michigan announced it is moving its regional headquarters and 150 full-time employees to downtown Detroit.The ongoing development of the $140 million M1 rail project which is nearly finished and stretches from downtown Detroit to Grand Boulevard in New Centre.
At the same time, the city has been adding things most communities take for granted, such as major grocery stores to support the influx of residents. Whole Foods, an upmarket organic chain, became the first major grocery store to open in Detroit last year, and Meijer opened a store and is building a second one to open next year.
A $60 million nine-story apartment, retail, hotel and conference centre, meanwhile, is planned to be erected soon in the heart of Midtown.
Dan Gilbert, founder of Quicken Loans, has also invested more than $1 billion in the last few years, including renovations to Greektown Casino and its highway access ramp. Mike Ilitch, owner of Little Caesars Pizza, the Red Wings and Tigers, is behind the $450-million investment in a new arena and another $200 million to develop the arena district.
Due to this increased demand, Global Investments have increased their supplier network to include the top listed brokers in Detroit, signed new contracts with large asset management companies and are working in conjunction with some new banks and other financial institutions.
CEO Mike Moodie of the US buy-to-let company comments: “This year we are really pulling out all of the stops to deal with increased demand for Detroit. We have signed up even more brokers for 2016 to add to our incredible list of exclusive suppliers. This is giving us and our investors the best valued rehabbed and tenanted properties in the Detroit marketplace by a long way. The key to our success is not only our properties but the management teams and structure that we have on the ground which is in our opinion essential when investing in Detroit. The management company is as important as the property that you buy.”