Once known for its urban decay and financial turmoil, Detroit is emerging as an unlikely haven for real estate investors, offering opportunities that seem almost too good to be true in some cases.
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Chase Hunter, a Houston native turned Detroit real estate investor, symbolizes the new wave of opportunity seekers. “I closed on my first two properties the same day in June of 2021,” Hunter recounted to Realtor.com. “The day I closed was my very first time in Detroit.”
Her initial purchases were a $2,000 property and another for $1,800.
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Hunter went from searching for cheap properties online to becoming a Detroit-based real estate agent and investor. And it points to the city’s dramatic turnaround. In 2013, Detroit filed the largest municipal bankruptcy in U.S. history, burdened by $20 billion in debt.
Today, it’s being called “America’s most unlikely real estate boomtown.”
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 data from Realtor. That’s a 324% increase over 15 years.
“Buyers, including investors, took advantage of low home prices in the area over the last decade, bringing energy and funds into the city,” said Hannah Jones, a senior economic research analyst at Realtor.
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However, it’s not so straightforward. Many properties come with baggage, including back taxes and the need for renovation. Hunter’s experience reflects just that. Her $2,000 property required an additional $85,000 in renovations before it was ready for renters.
The city’s reputation for crime is also a concern for potential investors. “Crime is definitely still a major challenge,” Hunter said to Realtor. “It can deter you from buying here for sure.” However, she said that the situation is improving, with Detroit reporting its lowest crime rate in 57 years last year.
Despite the near-term challenges, major players are betting big on Detroit’s resurgence. 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 over 130 properties downtown, pouring billions into 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 relocate its headquarters to a new development in the downtown area.
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The influx of investment is reshaping Detroit’s skyline and streetscape. Luxury retailers like Gucci have opened stores downtown, the WSJ noted, while the number of apartments in the central business district has more than doubled since 2010.
For investors like Hunter, Detroit’s appeal is in its combination of low entry costs and high potential returns. “Investors come to Detroit from all corners of the country because the market is like no other,” she says.
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This article Investors Cashing In On Detroit’s Real Estate Surge: ‘A Market Like No Other’ originally appeared on Benzinga.com
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