Detroit residential and commercial development faces many difficult challenges. Even so, some believe that there is light at the end of the tunnel, as reported in an article by the Detroit Free Press. According to a panel of experts at a University of Michigan Ross School of Business conference last week, opportunities are emerging.
Austin Black II, President of City Living Detroit said recently:
“I’ve been selling real estate in the city for six years, and this has been the best year yet. One of the city’s main assets for commercial redevelopment and residential development is the city’s unique architecture. Hundred-year-old homes in Palmer Woods, for example, appeal to buyers because the architecture cannot be replicated.”
This statement stands in stark contrasts to those of Eric Larson, President and CEO of Larson Realty Group, who he said recently, “We’ve lost 30% plus in valuation over the last 10 years.” So the opportunities that are available, remain drastically limited and are almost assuredly driven by bargain-basement prices. The median home price in Detroit is $76,500. And as Black showcased, even in strong neighborhoods like the previously mentioned Palmer Woods, housing values have declined from more than $400,000 a few years ago to $150,000 - $350,000.
Among the many hurdles to the industry there are; attracting and retaining the middle class, high car insurance rates, lack of businesses, and a dysfunctional school system. The current perception of both Detroit and Michigan is not helping residential and commercial development either. The current temperature of Michigan is of an aging manufacturing state that has fallen behind the times.
It’s not going to be an easy trek back to a booming economy, however experts believed that it has for the better part bottomed out. Detroit and the state of Michigan as a whole need to convince potential residential and commercial suitors they have a plan to regain a position of prosperity. A positive that Detroit has going for it right now is that money is slowly starting to find its way back into real estate -- and the real estate in Detroit costs pennies on the dollar.