The Detroit Housing Market Amidst the Pandemic
I’ve spent some time recently sifting through home sales data in Detroit starting the year prior to the pandemic, through March of 2022. As I documented in a long, long Twitter thread recently (part of what made me start a Substack with some more space to write), there are things happening in Detroit housing since the pandemic that I’ve never seen before:
What the charts and data below will show is that home prices have grown rapidly during the pandemic. Rising home prices preceded the pandemic as well (though not as rapidly), but what was not present in the years before the pandemic was an accompanying phenomenon of long-vacant homes being rehabbed and reoccupied across the city. In spots? Yes. But not at anything close to the scale, nor in the parts of the city, that I documented in that research on Twitter.
(Note: It’s paywalled, but Arielle Kass at Crain’s wrote a great piece about my newly-occupied homes research with a lot of interesting voices from across the city.)
Since the pandemic started, long-neglected inventory is being brought back online, the number of vacant homes is actually declining in Detroit for the first time in at least 15 years. And prices keep rising. I think it’s pretty clear there are substantially different housing market dynamics today than what we grew accustomed to from 2010 - 2019.
I’m not suggesting these are good or bad developments. What matters is how people & power centers respond and adapt to the fact that conditions are changing rapidly under our feet. Lots of long-vacant homes are now reoccupied? Fine. What are government, media, non-profits, local developers, and so on, going to do to understand the people who live in them, why they moved into them, and what they need and want from the city they live in?
The facts are what they are. What matters is how we adapt to the change we’re observing.
Data on the Detroit Housing Market from 2019 - Q1 2022
Since the first quarter of 2019, the average sale price of a single family home in Detroit has nearly doubled:
There’s been some change in that torrid pace since around Q2 of 2021, though moreso on the non-single family home side of the equation (condos, townhouses, etc), as single family home prices have continued to rise, albeit slower. However, March of 2022 recorded the highest average sale price for single family homes in Detroit of any month in the chart above:
Looking at all residential sales prices on a per square foot basis, the acceleration in prices coinciding with the start of the pandemic is clear:
Though it’s not shown in the chart above, March of 2022 also recorded the highest average per square foot sales price for residential properties in Detroit of any month in that chart — $77/sq ft.
I also looked at the kinds of owners who have been behind selling these homes by combining sales data with City of Detroit principal residence exemption (PRE) data at the time of sale (the PRE denotes whether a property is owner occupied or not).
One of the things I’ve wondered is whether longtime homeowners might be an increasing source of this sales activity, taking the opportunity to capitalize on the highest home prices in a long, long time. That doesn’t seem to be happening, though:
There’s been a slight rise in the percentage of home sales by homeowners, but it’s hovered pretty consistently since the start of 2019 at around 25% of home sales being homes sold by homeowners.
There’s even some indication that the buyers of these homes are, increasingly, homeowners. However I would caution drawing any definitive conclusions from the chart below. Again, I’m using PRE data to determine these figures, which can be noisy, and the numbers are close enough here that they could within margin of error:
Note: The totals in the chart above are different because “Ownership at Time of Sale” includes properties that were sold multiple times between Q1 2019 - Q4 2021, whereas Ownership in April 2022 just looks at the current ownership of each property that sold.