Once known for urban decay and financial turmoil, Detroit is now an unlikely haven for real estate investors, offering opportunities that in some cases seem almost too good to be true.
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Chase Hunter, a Houston native turned Detroit real estate investor, is emblematic of the new wave of opportunity seekers. “I closed on my first two properties on the same day in June 2021,” Hunter told Realtor.com. “The day I closed was my very first time in Detroit.”
Her first purchases were a $2,000 house and another $1,800 house.
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Hunter went from searching for cheap properties online to becoming a real estate agent and investor in Detroit. And it’s indicative of the city’s dramatic turnaround. In 2013, Detroit filed for the largest municipal bankruptcy in U.S. history, filing for $20 billion in debt.
Today it’s been called “America’s most unlikely real estate boom town.”
The numbers tell the story. According to Realtor data, the median sales price of a home in Detroit has skyrocketed from a low of $58,900 in 2009 to $250,000 in May 2024. That’s a 324% increase in 15 years.
“Buyers, including investors, have taken advantage of the area’s low home prices over the past decade, bringing energy and money to the city,” said Hannah Jones, a senior economic research analyst at Realtor.
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But it’s not that simple. Many properties come with baggage, like back taxes and the need for renovation. Hunter’s experience reflects that. Her $2,000 property needed another $85,000 in renovations before it was ready for tenants.
The city’s reputation for crime is also a concern for potential investors. “Crime is definitely still a big issue,” Hunter told Realtor. “It can definitely deter you from buying here.” However, she said the situation is improving, with Detroit reporting its lowest crime rate in 57 years last year.
Despite the short-term challenges, big players are betting big on Detroit’s revival. Dan Gilbert, the billionaire co-founder of Rocket Mortgage, is a driving force behind the city’s revival, according to the Wall Street Journal.
His real estate company, Bedrock Detroit, has acquired more than 130 downtown properties and invested billions in development projects.
Other corporate giants are following suit. According to the WSJ, Ford is investing more than $900 million in redeveloping the iconic Michigan Central Station and surrounding area. General Motors recently announced plans to relocate its headquarters to a new development downtown.
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The influx of investment is changing Detroit’s skyline and streetscape. Luxury retailers such as Gucci have opened stores downtown, the WSJ noted, while the number of apartments in the central business district has more than doubled since 2010.
For investors like Hunter, Detroit’s appeal lies in its combination of low entry costs and high potential returns. “Investors come to Detroit from all over the country because the market is second to none,” she says.
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This article Investors Benefit from Detroit Real Estate Surge: ‘A Market Like No Other’ originally appeared on Benzinga.com
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