Detroit home price average lingers below $40,000
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.