Detroit is facing an increase in demand for affordable housing as the city continues to bounce back from the 2008 crash. Despite holding nearly 81,000 off-market vacant units and a net supply of nearly 25,000 owned units expected by 2045, tight inventory of homes and the lower supply has pushed up prices, Hour Detroit reports.
“Detroit was hit so hard by the economic crisis that it needs more developers and people willing to rehab homes than currently available,” Chase Cantrell, Executive Director of Building Community Value told Hour Detroit. “Fixer-uppers abound throughout the city but many don’t want to go through that process. First-time home buyers are not signing up to be developers.”
According to the Michigan League for Public Policy, Detroit remains the largest poor city in America, with a median income of $27,838. Homeownership rates in African-American communities from 2000 to 2016 dropped from 51% to 40%; African-Americans make up 80% of Detroit’s population. According to the report, whites make up about 10% of Detroit’s population, but received over half of the mortgages issued in 2017.
Additionally, Detroit is one of the leading cities in the nation in reverse mortgage foreclosures, according to reporting from Detroit Free Press. USA Today analysis estimates there has been around 1,884 reverse mortgage foreclosures in Detroit between 2013 and 2017, the highest number in the country.
Reverse mortgage foreclosures are not the only foreclosure issues hitting Detroit, but measures are being taken to prevent these foreclosures. According to a recent study from Quicken Loans, property tax foreclosures in Detroit are at a 14-year low. In 2018, 2,920 properties faced property tax foreclosure auction, down from 6,052 in 2017, and far below the peak of 15,000 in 2015.
On a more positive note, Jeanette Schneider, VP of Management Services for RE/MAX of Southeastern Michigan states that “Detroit home values are seeing dramatic increases over last year.”
“During the first half of the year, the median price for a home in the city of Detroit increased more than 20%,” Schneider said. “Driving the increase in home values is the demand for Detroit housing.”
“While some neighborhoods have seen skyrocketing prices, there are still affordable communities that offer the brick homes that people desire at affordable prices,” she added.