Scanning the field of investment properties, one destination fits the “buy low and sell high” rule perfectly. They have gone so low that in 2017, the total assessed value of all their residential properties had sank to $2.8 billion. In 2009, their unemployment rate had risen as high as 25%.
Detroit, once famous for its automotive industry, had fallen on hard times. But now is the time to buy Detroit properties for investment, resale or to raise a family. After all, the city is on the rise again due to a surge in popularity among young people.
A City for the Young
Why are educated young people going to a place once well-known for its abandoned homes, empty lots and forgotten factories? The answer is simple if you think about what Millennials love. Millennials are looking for single family homes and moving to Detroit in the hopes of remaking the city in their own image. Downtown Detroit in Wayne County is densely urban with many apartments and businesses. Professionals tends to live there and almost everyone has a college degree. Residents love the skyline and the public park.
Consider the rumors of houses selling for a dollar. The ultra-low rent in minimum wage areas. All of that empty space to build urban farms, creative new industries, art collectives and culture houses. Ferndale in Oakland County is full of dogs, cats and parks that actually have visitors. People paint rainbows on the downtown crosswalks and hold city festivals. The area is safe and tight-knit, with a walkable community.
Detroit has become the ideal place for someone without a lot of money to find a home and start a business. The young people arriving every day want to create communities that work together on issues important to them like social justice and new politics. They play in the afternoon at their no-pressure sports clubs, then eat meat made from beans or vegetables grown on pesticide-free, vertical farms.
Pittsfield Charter Township in Washtenaw County is a family friendly, spacious place that cares about its residents. The locals are from all walks of life and always friendly. They have wonderful recreation in their excellent parks. The city-wide renovation happening in Detroit isn’t appreciated by every long-time local. But this transformation can no longer be stopped, and the young newcomers want to save the city that is their new home. To do so, they plan on making jobs for everyone.
All Signs Point UP
In 2019, the unemployment rate in Detroit had dropped back to around 8%. Remember how it was up as high as 25% ten years before that? This sharp turn got the attention of many economic forecasters. Royal Oak in Oakland County is a dense suburb with great schools. They have an active night life, mixing plenty of businesses and a small town feel. Locals love their traffic-free roads, farmers market and hangout spaces.
Further studies found that the city’s economy is looking overall positive for at least half a decade longer. In fact, due to Detroit’s earlier low, it will probably grow faster than its state as a whole. These projections held true across average household income, employment and overall economic growth. Midtown Detroit in Wayne County has a state campus and a university. Between the various safety groups surrounding the area, residents feel very protected. The many students have brought life and culture to this historical area, along with their bikes.
Of course, that research was done just after 2019, meaning that investors have only two or three more years of this growth before the city will settle into a steadier rise and fall again. Auburn Hills in Oakland County is beautiful and clean with a little of everything nearby. Residents go to the free community gym for its regular events and classes. They describe the area as always peaceful and calm. Other problems for the city remain, such as higher poverty and lower education levels than in other parts of the US. Yet these are again signs for the canny investor. What is low can go up with the right strategy and business model.
Fixing the Property Taxation
Can you guess what gained roughly two billion dollars in total value over just five years, between 2017 and 2022? All the residential properties in Detroit. Berkley in Oakland County is highly ranked as a place to buy a house in Michigan. They have very little traffic, great schools and a strong sense of community. People describe waving to each other on sidewalks or while parking cars.
This came after what was a very complicated problem for the city’s mayor and taxation officials. In 2020, the city was accused of failing to accurately assess property values after what we now know was a three billion dollar drop between 2010 and 2014. Due to the city’s old assessing standards, residents believe they were overtaxed by $600 million or more.
Plymouth in Wayne County is the kind of place where you wake up to birds chirping in the morning. The area is described as very hip and a great place to raise kids, with many air fairs and festivals. Locals love the park for the weekly concerts in summer and ice sculptures in winter. Public investigations were called for. The city council considered and decided against proposals to bring justice. Nearly four hundred thousand assessment notices were sent to homeowners. Ann Arbor in Washtenaw County has some of the best public schools in the country. Many people describe the area as diverse and family friendly, with an excellent hospital and fresh, organic food. Everything is homemade and there are plenty of nature trails.
The city is now on its fifth straight year of upward residential property values. While the rise was about 30% last year, they only expect property taxes to increase about 3% for a well-maintained house. Not to mention that by state law, any annual increase is capped – with a few limitations. Birmingham in Oakland County makes people feel comfortable with beautiful architecture and magnificent landscaping. Some even describe it as the center of luxury. Residents love the local utilities and great shops.
Between over-assessments of fallen home values in the past, a recently modernized assessment and taxation system, growing home values across the city in the present and a capped annual increase, Detroit now has a perfect market to enter into for anyone wishing to avoid excess property taxes.
Make an Investment in Yourself
Detroit has gone from the Motor City to the center for restorations and new development. Look at the communities of young people focused on building a new home for themselves. The economy is on the rise thanks to them, and home values are going up. Investors need to act fast in this kind of situation. Detroit is out of its lowest point and headed upwards. How long do you think that can last?
Millennials have chosen Detroit as one of their many growth centers, and more will continue to travel there until this trend predictably ends in a few years. That makes the many cheap properties a quick investment and an easy sale. Farmington in Oakland County is deep in the suburbs yet has a small town feel. They have beautiful parks and libraries with a welcoming downtown. Many locals mention how friendly everyone is at their local farmer’s market.
Families are choosing Detroit for its youth-led communities with a casual, hipster vibe. They don’t want the deep country of their grandparents or the stuffy suburbs of their parents. Plus, those rising home values and a fast growing economy are a great bet on their future. Grosse Pointe Park in Wayne County has a lot of beautiful old homes and two amazing waterfront parks. The area is perfect for parents looking to make similar friends. Schools in the area have great teachers and safe buildings.