Detroit Real Estate Market: House Prices & Trends

Is detroit real estate investment profitable? Do you have to invest in this market right away to grab the profit opportunity? You can make the best decision by learning more about the real estate market in Detroit.

Detroit Population and Growth

Before determining a location to invest in property, you need to consider a lot of aspects including the population and growth of this city. Let’s find out the statistics of detroit real estate detroit metro population.

More than 639,000 people are living in the city of Detroit. Meanwhile, over 4.3 million people are living in the metropolitan area. With this kind of population, Detroit becomes the most populous city in Michigan. Michigan is not only the largest city on the US-Canadian border but also the second-largest metropolitan in the Midwest. The largest metropolitan area in the US is Chicago.

Detroit metro has five counties including St. Clair, Lapeer, Oakland, Macomb, Livingston, and Wayne. Even though this city is the most populous in Michigan, the population declined by 1.1% last year. Per capita income is $35,288 and median household income is $62,768.

You have no choice but to understand the people in Detroit if you want to understand the Detroit real estate market.

Cost of Living in Detroit

To understand the detroit houses business, you need to understand the quality of life in this city. You might not have any idea that Detroit has new housing, as well as businesses in Midtown, New District, and Downtown areas. Because of this renaissance, more visitors and residents are attracted to this city. The low cost of living along with affordable rentals and vibrant neighborhoods becomes a great attraction in Detroit.

Compared to Chicago, the cost of living in Detroit is 18% lower based on the result of NerdWallet’s cost of living calculator. Detroit is included in the list of the best places for business and career in the US made by Forbes. You can find various companies in emerging technologies, including hydrogen fuel cell development and nanotechnology.

US News & World Report has made a research that found out that Detroit is one of the best places where people can live and also retire. Some suburbs in the metro area of Detroit are considered the best by niche, including Grosse Pointe Park, Ann Arbor, Bloomfield Charter Township, and Troy.

To support a better quality of life in Detroit, you need to check the facilities in the area. GM Renaissance Center which has 73 stories and seven skyscrapers become an important landmark in the city that has been photographed a lot. Detroit residents can go to the Eastern Market on Saturdays to get local produce, meat, and fresh flowers.

Are you a sports fan? You have a lot of things to cheer about in Detroit because this is the home of the Detroit Lions, Detroit Pistons, Detroit Red Wings, and Championship Detroit Tigers. You will have more entertainment options in Detroit because this city has major theaters including Orchestra Hall and The Fillmore Detroit.

Detroit Real Estate Market

The booming housing market can be found in Metro Detroit. It can be seen from the increasing demand and record-high prices although the interest rates are rising, as well. Despite those facts, the price of housing in this area is still relatively low. The median price for a single-family home is still under $100,000.

The detroit real estate might be seen as a perfect market by opportunistic investors if they want to get very affordable rental housing for collecting the cash and refinance it later. According to the report from The Wall Street Journal, local residents might find it hard to buy a home because of a lack of credit. That must be the reason why more households in Detroit are rented than owned.

According to Zillow, the Home Value Index for Detroit through May 2022 is $67,846. Compared to the last year, home values in this area increased by 27.4%. A significant increase can be found in the home values in Detroit over the last five years which reaches more than 122%.

According to, the median listing price of a single-family home is $80,000 in April 2022. Meanwhile, the median list price per square foot for a Detroit home is $71 and the median selling price is $84,500.

Detroit homes are selling for lower than the asking price on average because the sale-to-list price ratio is 92.02%. Detroit has 179 neighborhoods and among them, the most expensive one is Boston Edison West with a median listing price of $307,000. If you are looking for the most affordable neighborhood for detroit real estate investment is Farwell with a median listing price of $51,600.

Detroit Real Estate Market History

Before investing in detroit, you need to forecast the potential returns of your real estate investment in the long term. You need to analyze the history of home price change and the housing affordability in a specific market. The home price increase can indicate potential value appreciation. Meanwhile, housing affordability indicates potential demand for rental property.

A house price index report is published by Freddie Mac each month. This report gives us information about the home price trends in the short and long term in all major markets of the US. The recent report for the Detroit-Warren-Dearborn, house price index in April 2017 is 106.49 and in April 2022 is 162.04. The house price change in five years is 52.1%. Meanwhile, the one-year change is 13.8% and the monthly change is 1.4%.

Detroit Real Estate Market Forecast

Now, it is time to talk about the detroit housing market forecast, especially in the metro area. Some highest home appreciation rates in the US can be found in Detroit. According to Zillow, the price trend of typical home value in the Detroit-Warren-Dearborn metro has increased by almost 160% since May 2012. This price trend can reflect the typical home values in the 35th-65th percentile range. The typical home value in the very same metro area is $238,278 nowadays. Meanwhile, the high demand for housing and low mortgage rates made home value in this area increase by 15.3% over the past year. The trend will keep rising in the next twelve months, after all.

On the other hand, home values in Detroit City have increased by 28%, Wayne County by 17.1%, Oakland County by 15.7%, Warren by 15.6%, and Dearborn by 16.6% over the past year. They will keep rising in the next twelve months. reported that real estate in Detroit has appreciated 79.22% over the last decade. It means that the average annual appreciation rate is 6.01%. That is why this city becomes in the top 30% of all cities in the US for real estate appreciation.

With 18.01% of appreciation rates, Detroit is included in the highest appreciation rates in the country in the last twelve months. During this period, real estate investors can make a successful short-term investment in Detroit.

What about the appreciation rate in the most recent quarter? It reached 6.89% which means that the annual appreciation rate is 30.53%.

This forecast might make you want to look for the best neighborhood in Detroit to invest in property rentals. has listed the neighborhoods with the highest appreciation rates since 2000. They include Rosa Park Southeast, University West, West Village, McDougall Hunt South, Condon East, Corktown, Jeffries, Brush Park, McDougall Hunt West, and University.

Detroit Real Estate Pros and Cons

Before buying real estate in detroit, you need to understand the pros and cons of this market first. Why should you consider buying property in Detroit?

First things first, the extremely low prices of property in Detroit might be pretty attractive. Even average people can afford to buy a home in this area.

The prices for buying a property in Detroit will affect the rental prices, as well. There is no need to worry that tenants will not pay rent on time. The rental price is pretty affordable so they can pay rent rather easily.

If you buy a property for investment, you have to think about the profit opportunity. Property in Detroit has a lot of room for price increase in the future. More importantly, the rental yields in Detroit are excellent, as well.

People can consider buying property in Detroit because of its rather-low downside risk. That is why investment with a lot of money might come from institutional investors.

This city can be more popular in the future because it offers the comfort of a big city. Meanwhile, living costs in this metro are relatively low.

Buying a house in Detroit might be a promising investment because of those benefits. Nevertheless, you must not be careless because this choice also comes with drawbacks.

The real estate market in Detroit might be promising, but you might find it difficult to find good tenants. You also have to deal with rather-dodgy neighborhoods.

Although tenants can pay the rent rather easily, they might not pay it on time. You also have to be ready for the possibilities of troublesome tenants. It can be associated with the unemployment problem in Detroit. Pretty high crime rates can also be found in this area. You should not be surprised if your property is messed up by tenants.

The decreasing population in Detroit can also be another drawback. It can affect the demand for housing which may drop further. Detroit also has a low-income level.

Detroit Real Estate FAQs

With all of the statistics information above, you might have several questions to answer.

  • Should You Invest in Rental Real Estate in Detroit?

This might be the very first question that you will make before deciding to invest in real estate in Detroit. You have to make sure that you can make a good investment in Detroit. For answering this question, you need to find out more about local trends.

The statistics about real estate in Detroit can be considered positive. Based on the evidence, you can say that you can get good returns by investing in rental real estate in Detroit in long term. The profit can be found because the price of a home in Detroit has been increasing year over year.

  • Is the Economy in Detroit Growing?

Of course, before deciding to invest your money in real estate, you need to compare several real estate markets across the US. After making the comparison, you will find that Detroit’s real estate market for rental or investment is affordable during the housing boom in the current year.

You must not forget that 500 companies can be found in this city. This amount company is suitable for the economic and employment development in Detroit. Finance, technology, health care, and manufacturing sectors are represented the most.

  • Are Home Values in Detroit Increasing?

The price tags in Detroit residential property market are varied. It means that you can find real estate at a cheaper price than offered in other markets. The property price within the city is escalating very quickly. This circumstance makes investors consider the real estate market in Detroit because the price growth is expected to remain for a long time. Homes in Detroit have a $66,015 typical value. Adjustment to the value can be found seasonally. However, it can only include the middle price tier of real estate.

  • Is the Housing Market in Detroit Affordable and Growing?

Talking about the growth of the real estate market in Detroit, you can find that the general rates are increasing. You might have a big worry that increasing the general rates of the real estate market will make the property price much more expensive. Real estate in Detroit is still considered more affordable compared to other cities with competitive markets.

People might be looking for affordable rental real estate in the Detroit-Warren-Dearborn metro. They will find about 500,000 rental properties in the area. People with 60% of the area median income will find the price of a property in this area is still affordable. This report is based on American Community Survey data held in 2019.

You should invest in the detroit real estate market today because you have a bigger opportunity to find potential property owners of a range of properties at cheaper prices. You can improve your cash flow by renting those properties. Of course, you can feel free to sell them when you find that the market is rocketing.

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