Time to Sell and Move to Detroit! The Bubble in the Suburbs May be Here…
Here are the Facts! You Decide….
One of the most significant trends in residential real estate, as the result of Covid and the continued unrest in our country’s major cities, is a flight to the suburbs. This has caused home prices in the suburbs to skyrocket and the values of residential units in the city to plummet. The question is have prices gone too far? Are we looking at another residential real estate bubble in the suburbs?
Is it time to sell your home in the suburbs and take advantage of the extreme value in the city of Detroit?
Here are my thoughts…
- The impending real estate bubble – Prices of residential real estate in the suburbs of SE Michigan are at levels we’ve never seen. For example, the average price of a house put on the market in Birmingham Michigan over the past 60 days is $433/SF or $1,766,476. Click >>Birmingham CMA<< for a report of new listings over the past 60 days. This represents an increase of 160% since 2010 and is at levels we’ve never seen. It’s this kind of a move that typically represents a Bubble. Remember 2007?
- Detroit real estate values – Fortunately Detroit has not experiences the same collapse in residential prices that the rest of the country’s major cities have. Why is this? Detroit has very limited inventory of residential units for sale but continues to see high demand. Why the demand? It’s my belief buyers have simply been priced out of the market in the suburbs and are looking at markets like Detroit as a place they can afford. We are also seeing a strong trend of people moving here from cities like New York and Las Angeles looking for a more affordable lifestyle and better quality of life.
- The opportunity – Considering a bubble may be in our future, you have a once in a lifetime opportunity to “Cash Out at the Top” and “Buy Low” in one of the fastest recovering markets in the country known as Detroit.
- Comparison between Detroit home values -vs- the suburbs – So what can I buy now in Detroit and how much of a value is it truly when compared to the suburbs. Here is a perfect example:
1550 West Boston located in the historic Detroit neighborhood of Boston Edison
Fully Renovated 5,625 SF, 7 bedroom for Just $699,000 ($124/SF)
Based on todays pricing, this same house would be selling for over $2.4 million in Birmingham
>>Click here<< to See Photos of the Home and listing details!
A few other things to consider when evaluating whether we are looking at a potential residential real estate bubble in the suburbs:
When Does a Real Estate Bubble Take Place?
A real estate bubble takes place when home values hit excessive highs and people are allowed to over-leverage by the banks. Well unfortunately that world is back and is taking place in the suburbs at an alarming rate. Individual bankruptcies are rising and homes are under water due to over-leverage and are increasing at a pace similar to the mid 2000’s. Yep, the banks did it again. They are loaning money to whomever wants to borrow it as long as you are located in the suburbs… My point of all of this is a smart decision may be to sell at an all time high in the suburbs and buy at bargain prices in a market that is just starting its move.
Another interest point about real estate value in the City of Detroit
Detroit is one of the only cities in the country that residential real estate gets more expensive the further you get out of the city. It’s a sad fact and no longer logical. People moving here from other parts of the country and the younger generation see it. They know what they can buy in the city -vs- what they can buy in the suburbs and see the Financial Opportunity. Especially the people moving here from the east and west coast of the U.S. where home values are at crazy levels.
Who else is moving to Detroit other than the Young Hipsters?
It’s not just the kids moving back to the city. It’s now the older generations as well. For example, I recently helped a couple in their early 50’s sell their house in Rochester Hills and move to Boston Edison. Why are they moving? Number one, they want to sell at the top and buy at the beginning of growth. Number two, they love historic architecture and want to live in a house that was not mass produced by a large publicly traded home building company. But equally as important, they realized all of their social activities and events they attend are in the city. “Why are we driving an hour to hang out where we like to hang out?”.
This buyer segment may be what tips the scales and causes growth in city values that no one can comprehend.
Oh and one more thing…
Every time I meet with our friends in the suburbs they ask “Where do you buy groceries? There are no grocery stores in the city. Right?”. I find that the biggest misnomer ever! Within three miles of where I live in Boston Edison, we have six grocery stores (that I frequent often), which includes a Whole Foods and Meijer. Oh we also have this little thing called the Eastern Market where all the grocery stores in the suburbs buy there meats and produce… Yes we have places to buy food!
Either way, I do love the suburbs of Detroit. In fact when I moved hear from New York City, I lived in Rochester and Oakland Twp and certainly have hung out in Birmingham and others. All are great places and some of the most beautiful places I’ve been. I’m just highlighting what may be a wise financial decision and Sell What you Have in the Suburbs and Join us in Detroit. Heck you may be able to sell your current home and pay cash for the next one. Might be nice to not have a mortgage….
Click here to learn more about Who is Actually Moving to Detroit!
Want to know how to navigate Detroit real estate?
Need some help figuring out Detroit real estate? Don’t forget to sign up for My Detroit Property Organizer!
What is my Detroit Property Organizer?
To be competitive in the Detroit market you have to react very quickly when something hits the market. So we created “My Detroit Property Organizer”. My Detroit Property Organizer allows you to receive real time alerts on the hottest neighborhoods in Detroit. So you don’t have to wait for your Realtor, who may NOT Really know Detroit. Realty in the D does that for you! And yes we know Detroit. In fact I live in the Historic Neighborhood of Boston Edison. So I practice what I preach.
>>Click here<< to learn more about My Detroit Property Organizer!
If you’re interested in Investing in Detroit, Moving to Detroit or Selling your Detroit home, I’d enjoy the opportunity to help!