Detroit Real Estate Market 2023

Detroit Real Estate Market Trends & Statistics 2023

Detroit is among the most affordable cities in the country, and its real estate market is one of the strongest. This combination makes Detroit an attractive option for investors and homebuyers alike.

Detroit has a strong manufacturing base, with several Fortune 500 companies headquartered there. Manufacturing (particularly automotive) and health care are the most heavily represented job sectors in Detroit.

Explore Detroit’s housing market, population and employment trends in the tabs above (or below if browsing on mobile) to learn more about this area.

Data Sources:

• https://www.zillow.com/
• https://factfinder.census.gov/
• https://www.deptofnumbers.com/
• RealWealth Property Team Data

Median home values stats and descriptions

The median home price in Detroit is $237,575. This is 30.8% less than the national average of $343,292.

In neighborhoods where RealWealth members invest, the median home price is $97,500. That’s 71.6% less than the national average!

The real estate market in Detroit is somewhat competitive, with a Redfin Compete score of 30 out of a possible 100. The average home receives 2 offers and sells in around 35 days.

Median monthly rent stats and descriptions

In 2022, the median monthly rent for an average home in Detroit was $1,427. That’s 27.6% lower than the national average of $2,054. We see that in neighborhoods where our members invest, median rents are $1,075.

And while the Detroit housing market is slightly skewed towards buying over renting with a price to rent ratio of 14 (which means it’s a bit more affordable to buy than rent homes), 52% of households rent their homes.

For investors who have the right guidance, Detroit offers solid cash flow prospects. Many homes in the city are priced below $100,000 and conform to the 1% rule (meaning they rent for over 1% of their purchase price). Average rent to value ratios in the city’s metro area stand at 0.6%, 5.4% higher than the averages for properties across the country. For Realwealth investors in Detroit, average RTVs are 1.1%. This is greater than 1% and 93% higher than the average US RTV ratio!

Median home value appreciation rate 2014-2022

Home values in Detroit grew by 86.94% from 2014 to 2022, an increase of 3.4% over the national rate (84%) during the same period. Detroit home values grew at an average annual rate of 9.35% during this period, which is slightly higher than the national average (9.1%). According to Kiplinger’s Market Affordability Report, since the last real estate market bottom in March 2012, home prices in Detroit have increased by 136.9%.

Median monthly rent appreciation rate 2014-2022

As Detroit’s rental market has grown, so have rent prices. In the last 8 years, median rent prices have increased by 37.51%, an average of 4.61% per year. This shows that Detroit’s rent prices have grown 27.6% slower than average US rent prices. Rents are increasing, albeit slowly, in Detroit, and the rental vacancy rate is low at 4.4%.

The Detroit metropolitan area has a population of 4,365,205. Between 2011 and 2021, Detroit grew by a total of 1.72% at a rate of 0.17% per year. The city has experienced a population growth rate lower than the national average for the past 11 years. However, over the past few years it has seen an influx of young professionals and immigrants.

Between 2013 and 2017, metro Detroit had the second-highest growth rate for populations between the ages of 24 and 35. Although Detroit’s millennial population growth rate of 9.5% trailed Seattle’s millennial growth by 13.5%, it outpaced the national average of 5.5%. In that same five-year period, metro Detroit experienced a 10.7% growth in its foreign-born population — above the national average of 7.7%.

Employment opportunities have been a major draw for millennials moving to Detroit, with 77,000 new jobs created in the Detroit metro area between July 2021 and July 2022.

Detroit-Warren-Dearborn, MI MSA has a GDP of more than $220 billion as reported by the Federal Reserve Bank of St. Louis. It has grown by nearly 11% over the last 10 years.

Detroit is home to 17 Fortune 500 companies including BorgWarner, General Motors, Lear, Whirlpool, Dow Chemical Company and Ford Motor Credit.

The largest employers in the Detroit region include Ford Motor Co., General Motors, Ally Financial, the University of Michigan and its associated medical centers, Beaumont Health and Quicken Loans.

Affordable real estate prices

Detroit is a great place to invest in real estate.

The median price of homes in metro Detroit in 2022 was $237,575. This is 30.8% lower than the national average of $343,292. The median price of homes in neighborhoods where Realwealth members invest is $97,500, which is 71.6% less than the national average home price.

In Detroit, rental housing is generally affordable. Average rents and renter household incomes are somewhat lower than national levels. But, median incomes for renter households have risen faster than the median gross rent, contributing to increased affordability over time.

Strong rental cash flow opportunities

Detroit is a place where you can get great deals on real estate, and it’s also a place where real estate prices are steadily appreciating.

This city has many properties that fit the 1% rule. The average rent-to-value ratio in the metro area is 0.6%, 5.4% greater than the average rent-to-value ratio for investment properties across the US. Realwealth investors in Detroit have an average RTV of 1.1%, which is greater than 1%.

Renter-occupied housing accounts for 52% of the total occupied housing in Detroit. And the vacancy rate is low at 4.4%.

High property appreciation rates

Over the last 10 years, home appreciation rates in Detroit have been among the highest in the country. Home values in Detroit increased by 9.35% per year from 2014 to 2022. Due to high rates of property appreciation, Detroit had the largest increase in house flipping from 2021 to 2022, growing from 1.2% to 6%.

Robust job growth

The gross domestic product of the Detroit-Warren-Dearborn, MI MSA was $220 billion as of 2021, according to the Federal Reserve Bank of St. Louis. GDP has grown by nearly 11% over the last 10 years.

Metro Detroit’s manufacturing base is still the main source of employment gains, but jobs in the professional and business segments, as well as education, construction and health services are also increasing.

The Detroit metro area created 77,000 new jobs between July 2021 and July 2022, a 3.97% growth rate that was 3.45% higher than the US average.

Detroit is home to a variety of companies in emerging technologies such as nanotechnology and hydrogen fuel cell development. These include Daimler Chrysler, Delphi Automotive Systems, and General Motors’ Hydrogen Fuel Cell Unit.

Revitalized neighborhoods

It’s no secret that downtown Detroit is experiencing a renaissance. In the last 15 years, billions of dollars have been spent in the city’s core, revitalizing a downtown and adjacent communities that had become ghostly and abandoned.

Downtown, Midtown, and Corktown are three neighborhoods that are developing at a rapid pace. Each features a bounty of new restaurants, galleries, community gardens, and markets. Bedrock (a development company owned by billionaire Dan Gilbert) has invested or allocated more than $5.6 billion in 100 properties in downtown Detroit and nearby neighborhoods.

Newsworthy building developments and projects in Detroit

Woodward West

Woodward West is a 204-unit residential community that opened in September 2022. It was co-developed by local companies Queen Lillian Development and The Platform. In addition to residential apartments, it offers 25,000 square feet of retail space.

Woodward West features an extensive art collection on display throughout the building. The building’s lobby displays a variety of artworks by local Detroit artists.

Woodward West has leased 75 percent of its units in less than three months. 20 percent of these apartments were offered below market rates as affordable housing for those with qualifying incomes at 80 percent of the area median income (AMI).

Fisher Body 21 Redevelopment

When it comes to Detroit real estate, there aren’t many places that can claim to be as iconic as the Fisher Building. The late Albert Kahn’s masterpiece has stood tall over downtown since 1928—and now, it’s getting an upgrade.

A $134 million renovation project is underway at the building at 6051 Hastings St., in Detroit’s Medbury Park neighborhood. The rehab effort includes two adjacent lots at 991 and 666 Harper, which will provide parking for residents. The building is getting a makeover to include 433 market rate and affordable apartments, 28,000 square feet of commercial and retail space, 15,000 square feet of co-working space and a rooftop deck with views of downtown Detroit.

In what may be Detroit’s largest African-American-led development deal to date, Gregory Jackson of Jackson Asset Management and Richard Hosey of Hosey Development have teamed up to rehabilitate the 600,000-square-foot Fisher Building into loft condos. At $134 million, the project will transform the historic building into a hub for creatives—and revitalize Midtown at the same time.

THE ICON Redevelopment

Bedrock, one of Detroit’s largest real estate developers, announced in December 2021 that the company had acquired The Icon, a 420,000-square-foot development (formerly home to the United Auto Workers – General Motors training center) located along Detroit’s riverfront.

This acquisition adds more than 18 acres and 880 parking spaces to Bedrock’s growing portfolio, which has been expanding from the central business district to the east riverfront. Bedrock’s plans for the property include extending activity along the entire Riverwalk by providing access to public space, waterfront living, offices, warehousing and event space.

The Detroit Center for Innovation Building

In December 2021, the Detroit Center for Innovation was announced as part of a three-building campus near Little Caesars Arena. It is a partnership between the University of Michigan, the Ilitch family’s Olympia Development and Stephen Ross’ real estate firm Related Cos. The $250-million project will include a research and education center and a technology incubator. It will break ground in 2023.

The Detroit Center for Innovation would be a world-class research, education and entrepreneurship center anchored by the University of Michigan. The facility would house laboratories and specialized equipment for a variety of research endeavors, including automotive engineering and green technologies.

Ford’s Corktown project

Ford Motor Co. will invest nearly $1 billion to transform the historic Michigan Central Station in Detroit into a hub for 5,000 knowledge-economy jobs. The new station will be a gateway to Corktown and the surrounding neighborhoods by way of a mobility platform, multiple outdoor plazas, open spaces, and improved streets.

Four key buildings make up the development—Michigan Central Station itself, the Book Depository being revitalized into a maker space by architecture firm Gensler, Building West (a new construction to the west of the station), and The Factory (which is already home to 250 members of Ford’s autonomous vehicle business unit).