The Detroit area housing market could be a topic all its own. I agree with the sentiment expressed that the methodology is flawed and the city and region are catching up to a more realistic expression of what homes are worth. Detroit, parts of downriver, south Macomb and the inner ring in general were extremely depressed in value. My biggest point of contention with this article is that its focus is too narrow.
If the question was is housing overpriced in general due in part to the US economy being a safe haven for international assets and the focus of American economics in general on building wealth through housing. Well that would be a more complicated and pertinent question. The Detroit area seeing a 15, 25, 35+ percentage points increase in home value over a year is a reflection of in part of better governance, investment in infrastructure and civic institutions as well as Detroit itself. Various factors come into play in the city the increase in population, record lowering of violent crime, reform and stabilization of schools in Detroit along with a long term period of stability and or growth economically. As well as large scale and continuing investment in infrastructure, institutions & city services, Detroit has switched from being a weight on the region to an asset.
(This isn’t healthy though it’s made a lot of wealth. Even if it’s picking up on a previously hidden trend that’s just starting to be tested a bit by the national market. The rise in housing prices needs to cool down a bit to prevent a wave of harmful speculation. However fear a crash in housing prices more than I fear overvaluation even if as I believe the market correction is correct, pushing overvaluation is a dangerous narrative albeit potentially helpful in small doses.)
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River Rouge Housing Market Trends
What is the housing market like in River Rouge today?
In May 2024, River Rouge home prices were up 56.9% compared to last year, selling for a median price of $102K. On average, homes in River Rouge sell after 49 days on the market compared to 130 days last year. There were 10 homes sold in May this year, up from 6 last year.
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https://www.redfin.com/city/17614/MI...housing-market
Is the current pace of recovery sustainable though say economic and or political instability no I would say that if good governance and proper reinvestment in the basic assets and services continues than the city and region will continue to recover. However the uneven valuation of the metropolitan area housing market reflects where economic growth was being generated during the periods of decline in U.S. industry and ancillary activities. The readjustment towards industrial value in America being only at the higher end white color higher end advanced manufacturing with a gutting and or outsourcing rather than restructuring of value input neutral or negative divisions is key to understanding.
The Boeing - Ford axis of development as a company and in specific focus on investment in product quality in regards to the competition as a revenue stream as opposed to coasting on reputation while cutting into mission critical assets towards maintaining the highest financial valuation leveraged into primary revenue stream. Michigan Central and the Michigan Ave - I-94 public-private investments are in the short term a financial liability whether they pan out in a decade - generation time frame to a net asset will require a far sighted leadership/market analysis, flexibility & a eyes wide open level of introspection. If running a successful company that is able to transition periods of change with growth while being a responsible corporate citizen was easy everyone would do it. Threading the needle by taking record profits to raise the corporate community base to be a productive engine for growth in an established market is an order of magnitude more expensive and difficult but offers potentially the greatest returns.
Getting into the weeds a bit here but I do like going down rabbit holes. This is an extreme example that may only be applicable due to Boeings shift towards only caring about the defense aspect of its business while it’s critical for Ford who was in the position to invest in its corporate base. The extreme devaluation of the Detroit market allows/allowed for bold moves that just are too risky in any other market without a proven path to success. The secret sauce that Dan Gilbert cooked up with his holistic downtown investment strategy is being tried out by Ford at a greater order of magnitude. Ford isn’t alone University of Michigan, Michigan State, Henry Ford Health have all taken notice and are somewhere along in leveraging the potential left by the extreme devaluation and stability provided by the bankruptcy reorganization & period of good stable governance.
Certainly nothing is assured the race for critical mass, reaching that invisible line where a sustainable economic engine kicks into gear is esoteric and ever changing though not undefinable. If one this if clear is that life is unpredictable and solid footing become slippery while new opportunities open new paths.
What is clear is Detroit has reentered the national conversation about business, government & where and how to bet/place assets for an improved model of socioeconomic development. There’s certainly a cyclical nature to development trends new lands are opened to development by new technologies and older regions once at the forefront have fallen and risen again (the south). Leveraging your unique situation while using success and a guideline and framework to build from is a dull yet accurate way to close my thoughts.
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