Price Gains, Efforts Indicate Detroit Is Turning the Corner
Detroit’s struggles during the latest financial crisis and housing meltdown has been an ongoing issue for a long time, but Clear Capital data suggest the city is turning the corner.
According to the real estate asset valuation and collateral risk assessment provider’s September Home Data Index Market Report, Detroit was named the second highest performing metropolitan market behind only San Francisco.
In September, Detroit home prices saw quarterly and yearly growth of 4.3% and 23.3%, respectively, therefore bringing the median home price to $107,500. Comparatively, the national median home price is $215,000.
Through September, Detroit home prices are still down 64.5% from peak values, whereas San Francisco is only 28.2% below its peak.
“Strong performances in San Francisco and Detroit remind us that in a dynamic market, the only constant is change,” said Alex Villacorta, vice president of research and analytics at Clear Capital. “As demand calibrates to local economic environments, markets will start to find their natural equilibriums with moderating gains ahead,” that should invite new markets, such as Detroit, “to share the spotlight as their recoveries continue to evolve.”
Villacorta noted that Detroit’s struggle with relatively high REO saturation over the last several years delayed recovery. But low price points and REO saturation improvements now are driving gains.
Over the last four years, REO saturation in Detroit has been cut in half, but it still remains relatively high at 31.7%. Furthermore, the Truckee, Calif.-based data firm said that since March, the saturation rate for the Motor City has fallen by 11.5 percentage points.
As metro Detroit and its dilapidated housing market starts to emerge from years of a full-blown crisis several local and national organizations are gathering to contemplate the validity of past and future economic development strategies.
And for the first time the National Alliance of Community Economic Development Associations is not holding its annual summit in Washington, but in Detroit from Oct. 2-4.
NACEDA’s 7th Annual Summit brings to Michigan national experts in financial empowerment, housing development, land banks and land trusts, community benefit agreements, and place-making who will meet with local community leaders to discuss future community development options.
After filing for bankruptcy earlier this year city officials are concentrating on new solutions. The summit’s logo reads: “With necessity comes ingenuity!”
Speakers include Matt Cullen, president and CEO of Rock Ventures, the subsidiary of Quicken Loans that has invested more than a $1 billion in revitalizing Detroit. Rock Ventures moved 10,000 employees to Detroit's urban core and recruited 100 companies to join them.
Since Detroit’s low-income neighborhoods were the hardest hit by the city’s downfall and continue to face major challenges, Sheila Crowley, president and CEO of the National Low Income Housing Coalition, will share with the audience NLIHC’s expertise as one of the leading supporters of the United for Homes campaign, whose stated goal is to reform the Mortgage Interest Deduction, achieve a fairer tax policy and increase the efficiency of the National Housing Trust Fund.
Also in attendance will be the commissioner of New York City’s department of consumer affairs, Jonathan Mintz, who is credited for launching the Office of Financial Empowerment, a local coalition designed to help leverage the power of municipal government to reduce poverty while promoting long-term financial stability and asset building.
Mintz is expected to offer insights about how to maximize city government-based financial empowerment initiatives.
Up to 100 economic development professionals from across the U.S. are also expected to attend.