June 20, 2023
“Home Sales in Detroit” shows that market sales have returned to almost every part of the city, but sales cost remain low
“Black Homebuyer Demand” shows Detroit making progress in attracting Black middle-class homebuyers but work remains to increase homeownership demand in Detroit neighborhoods
DETROIT – Detroit Future City’s (DFC) two latest reports “Home Sales in Detroit” and “Black Homebuyer Demand,” released during National Homeownership Month, examine the housing market in Detroit and the region, and provides data to help strengthen the city’s homebuying market, a primary indicator of economic health and factor in Detroiters’ opportunity to build generational wealth.
Both reports show a growth in homebuyer demand and purchases in the last two years, including an increase in Demand from Black homebuyers at various income levels, and outline key areas for growth, citing the need to increase housing values to help improve Detroiters’ economic mobility, as well as improvement in housing stock options and quality, housing at a variety of price points, neighborhood amenities, and neighborhood marketing.
“The increase in home purchases over the last 10 years is a real testament to the cross-sector collaboration to create a healthy housing market. With the housing market strengthening in Detroit, we must leverage targeted investments that create stronger and more equitable homebuying opportunities,” said Anika Goss, DFC president and CEO. “These investments should be prioritized to develop greater diversity in housing prices, allowing the city to capture homebuyers with broader ranges of income who have accessible opportunities to attain a mortgage.”
To assemble a comprehensive look at “Home Sales in Detroit,” DFC partnered with Data Driven Detroit to analyze records for 2012-13 and 2020-21 from the Wayne County’s Register of Deeds. The analysis looks at the volume of sales, type of sale, and sales price. DFC categorized home sales by two types – market sale, an arm’s length transaction between two relatively equally situated parties where the sale price is reasonably reflective of the actual market value; and, distressed sale, a sale that usually occurs quickly and at a reduced price due to some pressure on the property owner, such as foreclosure homes already owned by the bank.
“Home Sales in Detroit” identifies that while the volume of sales decreased (from 27,734 to 26,286), between the 2012-13 and 2020-21 time periods, the balance of sales shifted from distressed to market. Additionally, market sales have returned to many parts of the city, notably in areas that previously had little to no sales activity. In total, 70% of the city’s census tracts saw a decrease in the number of distressed sales over this time period, most likely due to a smaller number of tax foreclosure sales, and an overall stabilization of the housing market. Median sales values have also doubled to $30,000 for the city as a whole, but this sales price remains low.
While a higher number of market sales indicates a positive stabilizing trend in the city’s home purchase market, 42% of the sales remain distressed. This indicates the need for further market stabilization and stabilization in neighborhoods across the city.
“Black Homebuyer Demand” shows that over the past decade the demand for mortgages by Black homebuyers has increased by 188% across Detroit and the region. In the city of Detroit specifically, demand for mortgages by Black homebuyers increased by 443% or 1,600 applications from 2012 to 2021, almost three times the region. But, even with the increase in demand across the city, regionally only 1 in 5 mortgage applications by a Black homebuyer are made within Detroit.
In the suburbs, both inner-ring cities like Eastpointe and Warren, and communities further out, including Romulus and Clinton Township, are seeing a higher amount of demand from Black homebuyers. In some of the Detroit neighborhoods with the most mortgage applications by Black homebuyers lie in the city’s northwest side in Grandmont-Rosedale, Bagley, and neighborhoods between the two, and on the Eastside in East English Village.
Demand for mortgages in Metro Detroit spans income levels, with a substantial jump of 41% in applications from 2012 to 2021 by those making less than $50,000. In Detroit, applications from middle- and upper-class Black homebuyers increased by 382%, and by 477% for Black homebuyers making less than $50,000 during this same time period. Additionally, Detroit has regained the lead regionally as the city with the most Black middle-class homebuyer demand, surpassing Southfield in 2017.
“Last fall, DFC announced an ambitious eight-year plan to increase the city’s Black middle class and other communities of color. We have clearly gained some ground in the last decade, but even with the increase in middle class borrowers, disparities in mortgage originations continue to persist,” said Goss. “African Americans make up 77% of the Detroit’s population and are denied home purchase loans at two times the rate as white applicants. It’s not until we solve for this issue, that we can equitably rebuild the homeownership in the city.”
In addition to these two new reports, DFC has developed a comprehensive portfolio of research to support the equitable growth of Detroit’s housing market. Recent reports include “Buying In: Opportunities for Increasing Homeownership through Mortgage Lending,” the “Detroit Mortgage Catalogue,” and “A Detroit Homebuyers Guide to Overcoming Mortgage Application Obstacles.” DFC also is the lead convener of the Detroit Housing Compact, a forum for regular collaboration and collective action by more than 80 public, private, philanthropic, and non-profit stakeholders who work toward the goal of increasing the availability of stable, healthy, and affordable single-family homes for renters, homebuyers and homeowners in Detroit.
For more information, visit www.detroitfuturecity.com.
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