Home prices in Detroit are on the upswing
Home prices in Detroit were up 6.7% in September from a year ago, according to an index out this week from S&P CoreLogic Case-Shiller. That increase is the highest of the 20 metro areas in the indicator, beating out New York, San Diego and Los Angeles.
“I call it the revenge of the Rust Belt,” said Craig Lazzara of S&P Dow Jones Indices, pointing out that Chicago and Cleveland had also seen increased growth in home prices in recent months.
The last decade was pretty good for Detroit. Some neighborhoods saw lots of investment, noted Brookings Metro senior fellow Jenny Schuetz.
“Once you get core neighborhoods where people want to live, that tends to drive investment in surrounding neighborhoods, as well,” she said.
Schuetz also said that Detroit home prices hadn’t boomed in recent years the way they had in some other cities, so there’s more room for upward growth. Plus, when housing prices rise people tend to take better care of their homes.
“When your property is appreciating, then people have more equity,” she said. “And they’re also more likely to do things like rehab their kitchens or, you know, invest in some new landscaping.”
That can create a kind of virtuous cycle, but Anthony Baber of the nonprofit Detroit Action worries some residents of the city will be left out.
“You know, Detroit is extremely working class. It’s majority communities of color,” he said. “And rising housing prices are consistently pushing your neighbors out, and so you end up with a city that’s whitewashed and doesn’t have the culture that’s been established over a long time.”
To keep people from being priced out, Brookings’ Jenny Schuetz said that now’s the time for the local government to buy property and invest in affordable housing — before it becomes not affordable any more.
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