Detroit home price av­er­age lingers be­low $40,000

Financial Mirror (Cyprus) - - FRONT PAGE - By Dou­glas McIntyre

Among all the ev­i­dence that Detroit con­tin­ues to suf­fer from both the ef­fects of a smaller car in­dus­try and the Great Re­ces­sion, the me­dian home price in the city is $35,000. On bal­ance, prices have fallen re­cently, while through­out much of the United States home prices are ris­ing.

Ac­cord­ing to real es­tate web­site Tru­lia: “The me­dian sales price for homes in Detroit for June to Septem­ber was $35,000. This rep­re­sents a de­cline of 7.9%, or $3,000, com­pared to the prior quar­ter and a de­crease of 0.7% com­pared to the prior year. Sales prices have ap­pre­ci­ated 9.9% over the last 5 years in Detroit. The av­er­age list­ing price for Detroit homes for sale on Tru­lia was $33,527 for the week end­ing Septem­ber 9, which rep­re­sents an in­crease of 0.8%, or $270, com­pared to the prior week and a de­cline of 1.3%, or $434, com­pared to the week end­ing Au­gust 19. Av­er­age price per square foot for Detroit MI was $29, a de­crease of 9.4% com­pared to the same pe­riod last year.”

The pri­mary rea­son for the lack of im­prove­ment is likely both the drop in pop­u­la­tion and de­mo­graph­ics. The city’s pop­u­la­tion is more than half be­low its peak of over 1.5 mln in 1960. And most of the peo­ple who could af­ford to leave Detroit have, leav­ing a poor pop­u­la­tion, which keeps tax yields for the city low, which means city ser­vices can­not re­bound.

Ac­cord­ing to data from The Amer­i­can Com­mu­nity Sur­vey, the me­dian house­hold in­come in Detroit is about half the na­tional av­er­age of just over $50,000. The poverty rate is about three times higher. The city is in the midst of bull­doz­ing thou­sands of houses.

An in­tended sym­bol of the progress in re­build­ing is that many of the bro­ken or burned out street lights have or are be­ing re­placed. How­ever, Detroit is still “un­der­po­liced” and crime re­mark­ably high.

The life blood of the city was slowly sucked out, be­gin­ning as the U.S. car busi­ness be­gan to lose mar­ket share to the Ja­panese in the 1970s. As that trend ac­cel­er­ated, car com­pa­nies moved fac­to­ries out­side the city or closed them. Car qual­ity per­cep­tion and union costs made mat­ters worse.

The city does still have a pro­gram to sell blighted homes for $1,000 from the Build­ing Detroit web­site to peo­ple who pledge to re­fur­bish them. But only a few such houses are be­ing sold each day, and the pro­gram likely does lit­tle to help boost the me­dian home price across the city.

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