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Thursday, 14 February, 2008 8:22 PM
Detroit Housing Market: Some Good News, Some Bad News
PHOTO BY JASON RZUCIDLO / ©2008 AMERICAJR.com
Panel of realtors at the housing seminar. From left to right: Austin Black II (of Max Broock Realtors), Joy Santiago (of Ralph Roberts Realty), Ryan Cooley (of O'Connor Real Estate) and Elizabeth Tintinalli (of Real Estate One).
DETROIT -- A panel of realtors discussed the state of the Detroit real estate market, who's buying and what they're looking for inside the Guardian Building on Tuesday. The realtors spoke about what's promising and what's not so good in the housing market.
The good news is the enormous progress the city of Detroit has made over the last six years. "We've experienced a great deal of development," said Dave Blaszkiewicz, president of the Detroit Investment Fund. "You can almost pick any part of the city and find new housing.
"Shield's Pizza is coming downtown for the first time in 20 years. Twelve hundred new hotel rooms. On the riverfront, over $250 million invested on the west side. Eastern Market reconstructing sheds two and three."
Blaszkiewicz also mentioned improvements to the lower Woodward area. This includes renovations to the streetscape and the facade of buildings in the area. He said 70 new businesses have opened their doors in this part of the city. The president called Campus Martius Park "an epicenter of activity."
Studio One apartments held a preview opening on Feb. 7. Rentals are one of the bright spots in our current housing market, according to Blaszkiewicz. Many lofts in downtown Detroit are offering "try out a loft for a weekend" to encourage people to move in.
The greater downtown area is defined as the area from New Center to the Detroit River. The area being known as the downtown core is from I-75 to the Detroit River.
From 2000 to 2006, both these areas have added 2,500 new units of housing based on permits. The biggest share, 45 percent have been in the midtown area, with 18 percent on the east riverfront and another 14 percent in the downtown core.
These new units of housing are composed of townhouses, residential condos, adaptive reuse (commercial or industrial property being upgraded into housing), residential upgrades and large catalyst projects (Kales building, Book Cadillac Hotel).
The most-requested amenity for those who are moving into these areas is secured attached parking. New residents are young, educated and affluent, according to Blaszkiewicz. He said that 53 percent of new residents work in the downtown area and only 6 percent of new residents have children living with them.
There are a number of reasons why people are moving into downtown Detroit. First, new residents love the city life and the experience of it. Secondly, they enjoy the proximity to their work. Another reason is the proximity of the arts and culture. The fourth most popular reason for moving downtown is its diversity.
The Bad News about the Detroit Housing Market
"We're not there yet," said Blaszkiewicz. "We need to continue to put amenities in place. NEZ is important as an incentive. Downtown lags behind in income.
"We view this as a soft lending market. Difficulties in selling homes. Unemployment in Detroit is 9 percent. Sales prices have begun to soften. We have seen projects fail or convert. Folks are proceeding very cautiously. As a developer perspective, [it's] very difficult to get your project financed."
In order for new residential projects to be considered, 70 percent of rooms have to be pre-sold. This applies to both redevelopment of former properties and new housing plans.
In terms of foreclosures, "people are thinking there are more of them then there's going to be," said Ryan Cooley of O'Connor Real Estate and Development. "Some clients could purchase but they'd rather rent."
Where do we go from here?
The bright spot in the Detroit housing market is rental properties. "It's inexpensive in the rental front," said Elizabeth Tintinalli of Real Estate One. "You can get things a lot cheaper now."
"I've seen more people going to the Midtown area," said Austin Black II of Max Broock Realtors. "Buyers are very particular of the interior of their place."
Joy Santiago of Ralph Roberts Realty explains why people are moving to the downtown area: "Rental brings people to the city if they can't quality for a mortgage. A sense of community is really important."
If you are looking to sell a house, the panel of realtors suggest that you list your home on a website such as craigslist.com. They also suggest for sellers to contact a realtor so their property can be placed on the realtor's e-mail newsletter. In addition, contact local businesses that may allow you to post a flyer about your home.
PHOTO BY JASON RZUCIDLO / ©2008 AMERICAJR.com
Dave Blaszkiewicz, president of the Detroit Investment Fund, speaks at the Detroit Housing Market seminar inside the Guardian Building on Feb. 12.
Courtesy of the Detroit Investment Fund
This powerpoint slide shows the number of new housing developments in Detroit from 2000 to 2006.
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