Residential property values in Detroit have grown by more than $1 billion in combined worth since 2019, with virtually every neighborhood seeing gains, according to a city of Detroit analysis.
At a recent news conference, Mayor Mike Duggan said “189 out of 194 neighborhoods in the city saw their property values rise,” based on 2021 assessments. To watch the news conference, use this link. (The property value discussion starts around the 8:30 mark.)
The five neighborhoods that didn’t see rising values were due to a large number of demolitions of tax-foreclosed properties, city officials said. Those neighborhoods include part of four northeast communities near Highland Park: Cadillac Heights, Northeast Central District, Hawthorne Park and Conant Gardens. Airport Sub, near the city airport, also didn’t show an increase in value.
In the 2020 proposed assessments, the residential property values grew by over $775 million, bringing the city’s gain to more than $1 billion over two years, city officials said. That’s a 39 percent increase in residential property value. It’s also the fourth consecutive year of growth.
For 2021, residential property assessments in Detroit are projected to increase by an average of more than 8 percent compared to 2020, Duggan said.
Still recovering from Great Recession and subprime loans
When Detroit entered bankruptcy in 2014, the city’s residential values were in a tailspin and lost an estimated $3 billion in value during the Great Recession, said City of Detroit Assessor Alvin Horhn.
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In 2014, the median sale price for a Detroit home came in at only $14,000, while in 2018, that median moved up to $35,000.
The average home value in Detroit is still a little over $14,000, Horhn said. The home value is done by the city assessor to determine how much an owner should pay in property tax. That $14,000 average is based on every residential property in the city. Home value is different than median sales price, which is based on property recently sold or currently for sale. The median sales price for a Detroit residential property is around $71,000, according to various real estate firms.
In 2019, fewer than 1,700 mortgages for single-family primary residences were given in Detroit, according to an analysis by LendingPatterns.com, a firm that provides lending data and analysis to financial institutions.
Still, home values are increasing. The city identified seven neighborhoods where home values are rising by 15 percent or more. BridgeDetroit talked to some residents in those communities, where rising values are sometimes bringing growing concerns of gentrification.
Moving on up
Property values grew in seven neighborhoods by more than 15 percent from last year.
The historic district has about 900 homes that include mansions. City data show Boston-Edison homes west of the Lodge freeway grew more in value. The neighborhood’s website shows listings from $3 million for a mansion to homes in the mid-to -lower $200,000s.
Barton-McFarland & Pride area:
The two adjoining neighborhoods on the northwest side are still recovering from widespread tax foreclosures, according to various data. The real estate site Move In Michigan shows multiple homes being listed in the low-to-mid $100,000s while others are asking for as little as $10,000.
The Detroit Land Bank is by far the main land owner in the neighborhoods, according to BridgeDetroit analysis using data by Landgrid, a national parcel data and mapping tool. That means the properties were lost in tax foreclosure.
This eastside community appears to be benefiting from the rising prices of nearby neighborhoods, including East English Village and Chandler Park-Chambers.
The vigilant MorningSide Community Organization also keeps an eye on investors. “Investors can be good. But some are not so good,” said Jackie Grant, president of the community group.
Still, most are happy with the rising property values because they’re allowing more potential residents to obtain mortgages and other loans, she said. More than a dozen homes have sold for more than $200,000 in the past several years, according to Move in Michigan.
North End & Milwaukee-Junction
Here in the two northeast neighborhoods, the rising property values are accompanied by growing concerns of gentrification. North End artist Bryce Detroit recently launched “Hood Closed to Gentrifiers,” a campaign to address what an onslaught of investment means for a majority Black community.
Shirley Davis of the North End Neighbors community group, said many residents have the same concern. “Much of the investment, the fixed up houses, it’s changing the nature of the neighborhood,” Davis said. “Yet a lot of longtime residents, we still can’t get loans to fix up our homes. And when it comes to getting more affordable housing, those kind of developments move slow.”