The once-bankrupt Midwestern city that has transformed into an investor’s paradise: ‘America’s least-likely real estate boom!’
Savvy investors are buying up cheap real estate in Detroit, more than a decade after the city went bankrupt in 2013.
The Midwestern city was founded by the Wall Street Journal as real estate developers flock to the region after the economy bottomed out.
Among them is Chase C. Hunter who told Makelaar.com She was able to purchase properties totaling just $1,800.
Her journey to success began when she searched Google for “best places to buy cheap houses.” That search led her to the Motor City, where she saw that the Detroit Land Bank Authority was selling vacant properties “as is” for as little as $1,000.
“I bought my first two properties on the same day in June 2021,” Hunter said. “The day I closed was my very first time in Detroit.”
Chase C. Hunter poses on the steps outside her first Detroit home, which she purchased for $2,000 in June 2021
In the years since Hunter first committed to Detroit, he has become a small-time real estate mogul, owning eight different homes in the city
Her first home cost $2,000, the second $1,800.
Since first settling in Detroit, she has grown into a small-time real estate mogul with eight different homes in the city.
One building has been converted into an office for herself, while the other seven are renovated rental properties.
This year, she moved permanently from Houston to the city so she could be “on the ground” near her investments.
“The market can be challenging to navigate if you’re not there every day,” she said. “Buyers need to understand the culture of Detroit to understand how to invest here.”
She is so passionate about the Detroit market that she became a real estate agent 10 months ago and started a real estate investment group to help others do exactly what she did.
“Investors come to Detroit from all over the country because the market is unique,” she said.
The average price of a home sold in Detroit was just $7,500 in December 2008, months after the Great Recession was in full swing and had devastated the city’s legendary auto industry.
This Detroit home hit the market last day and is selling for $93,500, which is about the same as today’s average asking price
Detroit was in deep trouble long before the city announced in 2013 that it had a $20 billion debt.
The average price of a home sold in Detroit was just $7,500 in December 2008, months after the Great Recession hit and devastated the city’s famed auto industry.
Incredibly, sales prices have risen gradually most years until they $93,000 in July 2024which represents an increase of more than 1,100 percent since 2008.
“Buyers, including investors, have taken advantage of the area’s low home prices over the past decade, bringing energy and money to the city,” said Hannah Jones, senior economic research analyst at Realtor.com.
Buying a home for under $100,000 may seem like a pipe dream, especially when you consider that the median asking price nationwide is nearly $440,000 as of July 2024.
But it can be tough to get into Detroit’s housing market. Many properties are in complete disrepair or still have back taxes to pay.
Although Hunter’s first home initially cost just $2,000, she had to spend another $85,000 in renovations before the house was ready for renters.
Hunter, who is standing in front of her seventh property in Detroit, warns newcomers that there are a few things to keep in mind about the city, including the many repairs most homes need and the high crime areas
The $1,800 house she converted into an office ended up costing her $130,000 because she had plumbing problems.
“I used to buy big renovations that I had to fix from roof to basement; now I focus on things that I can turn around fairly quickly, like cosmetic renovations,” she said. “I look for homes in the $80,000 price range because you spend less on repairs.”
Her renovations typically cost between $5,000 and $10,000, which still means she pays 79 percent less for her properties than the average American.
Because home improvements require contractors, Hunter warned that out-of-town investors in particular should carefully vet who they work with.
“People will try to take advantage of you, especially if they know you don’t live here,” she said.
Hunter also acknowledged that crime in Detroit and surrounding neighborhoods remains “a major problem.”
“It can definitely deter you from buying something here.”
This Detroit home is listed for $129,900. It has three bedrooms and two bathrooms and spans 1,843 square feet
This new listing is slightly smaller at 116 square feet and is slightly cheaper at $124,900
Despite its reputation as one of the most violent cities in America, crime rates have been falling. Detroit ended 2023 with 252 murders, the lowest number since 1966.
The number of non-fatal shootings and car thefts have also decreased significantly over the past two years.
Still, Hunter protects her portfolio of homes with security systems and advises her clients to do the same. She also researches the quality of the neighborhoods where she plans to buy, because she wants her tenants to be safe.
“I avoid really bad areas that would be unsafe for single mothers and children,” she said. “If a home doesn’t work well for a family, I leave.”
While crime remains high in some areas, Hunter has found that Detroiters enjoy a close-knit community.
“Neighbors here keep an eye out for you,” she said. “One of my favorite neighbors passed away last year and he would call me if my tenants were doing something wrong. His daughter does that for me now.”
‘Most of my neighbors have become my family.’