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Detroit Real Estate Trends: Now is the Time to Invest

Now is a good time to buy and sell homes in Detroit. The city’s median home listing price is $13,000, which is $1,000 less than it was a year ago, but a 4% increase from a month ago when it sat at $12,500.

Tonya D.

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Now is a good time to buy and sell homes in Detroit. The city’s median home listing price is $13,000, which is $1,000 less than it was a year ago, but a 4% increase from a month ago when it sat at $12,500. These prices gains indicate positive momentum in the Motor City market. If prices continue in this direction, then sellers could see significantly larger checks at the closing table next year.

Detroit’s total inventory is 1,874, which is less than the 1,925 homes that were on the market a month ago, and significantly less than the 2,722 homes that sat on the market a year ago.

The 31% decrease in inventory from last year to the current year has resulted in increased competition for the remaining house. Investors and first time home buyers are fighting for the remaiong properties, many of which are sold “as is”, and prices should start increasing as a result.

Houses Going At a Much Faster Rate

If you’ve made the decision to invest in Detroit you should do it quickly.

Homes in this area are on the market for a median of 67 days. That’s a decrease from a month ago when homes were on the market for 72 days, and a huge decline from a year ago, when it took 86 days to sell a home in Detroit. The 7% decrease between a month ago and the 22% decrease from a year ago both show that people homes are selling much faster than they were just 12 months prior. If this trend continues, homes could take fewer than 30 days to sell within the next 3 to 6 months.

Another indicator showing that the Detroit market is slowly recovering is the median price per square foot. The median $/sqft, $12, has not changed from last month, or the previous year.

A Good Time to Borrow

The current mortgage rate for Michigan is 3.53%, a slight increase from last month at 3.39%. A year ago the rates loomed at just under 3.95%. Now is also a good time to borrow before rates increase.

Overall Forecast

Detroit was one the hardest hit areas during the real estate crash. Home prices are still far off from their peak, but the numbers show that they are stable and slowly increasing. Whether or not prices increase right away, the fact that the homes are selling at a faster rate is also a testament to the improving market.

Our guess: This trend will hold for a while.

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posted on: April 3, 2013
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