“A market like no other”

Once known for urban decay and financial turmoil, Detroit is shaping up as an unlikely haven for real estate investors, offering opportunities that seem almost too good to be true in some cases.

Don’t miss:

Chase Hunter, a Houston native turned Detroit real estate investor, epitomizes 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 we closed was the first time I was in Detroit.”

Her initial purchases were a $2,000 property and another $1,800 property.

Trends:

Hunter went from looking for cheap properties online to becoming a real estate agent and investor in Detroit. And it indicates the dramatic change of the city. In 2013, Detroit filed for the largest municipal bankruptcy in US history, saddled with $20 billion in debt.

Today, it’s called “America’s most unlikely housing boom town.”

The numbers tell the story. Detroit’s median home sale price has skyrocketed from a low of $58,900 in 2009 to $250,000 in May 2024, according to realtor data. That’s a 324% increase in 15 years.

“Buyers, including investors, have taken advantage of low home prices in the area over the past decade, bringing energy and funds to the city,” said Hannah Jones, senior economic research analyst at Realtor.

See also:

However, it is not that simple. Many properties come with baggage, including back taxes and the need for renovations. Hunter’s experience reflects just that. Her $2,000 property required 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 a major challenge,” Hunter told the estate agent. “It can definitely put you off buying here.” However, she said the situation is improving, with Detroit last year reporting its lowest crime rate in 57 years.

The story continues

Despite the near-term challenges, major 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 revitalization, according to the Wall Street Journal.

His real estate venture, Bedrock Detroit, has acquired more than 130 downtown properties, investing billions in development projects.

Other corporate giants are following suit. According to the WSJ, Ford is investing more than $900 million to redevelop the iconic Michigan Central Station and its surroundings. General Motors recently announced plans to move its headquarters to a new downtown development.

Trends:

The influx of investment is reshaping Detroit’s skyline and streetscape. Luxury retailers such as Gucci have opened downtown stores, the WSJ noted, while the number of apartments in the central business district has doubled since 2010.

For investors like Hunter, Detroit’s appeal lies in its combination of low entry costs and high potential returns. “Investors are coming to Detroit from all over the country because the market is like no other,” she says.

Read on:

“THE SECRET WEAPON OF ACTIVE INVESTORS” Up your stock game with the #1 trading tool. 1 “news and everything else”: Benzinga Pro – Click here to start your 14-day Trial now!

Get the latest stock analysis from Benzinga?

This article Investors Cashing in on Detroit’s Real Estate Boom: ‘A Market Like No Other’ originally appeared on Benzinga.com

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.