The COVID-19 pandemic may have changed the ways in which we do business but it hasn’t hurt Detroit’s real estate market much, as low-interest rates remain and demand continues to outpace supply.
“That kept the market going like it was before COVID-19,” says Ryan Cooley, owner of O’Connor Real Estate in Corktown. “We’ve been very surprised with how well the market has held up.”
The housing market in Southeast Michigan has been strong despite an economy that has devastated small businesses and resulted in many people losing their jobs. According to Realcomp, in November, home sales were up year over year nearly 12% in Metro Detroit. In the city of Detroit, sales were down 10% (after growing nearly 20% in September). But in November, the number of listings was down 45.8% while the median sale price had soared 45.5% from 2019, a persistent imbalance between demand and supply.
Of course, selling houses looks a little different these days. Realtors like Cooley have more fully embraced already-existing technologies like virtual tours to show their listings. Each O’Connor listing now comes with a virtual tour, something that was not the case pre-pandemic. Ryan Cooley, owner of O’Connor Real Estate in Corktown
As Realtors utilize virtual tours more and more, it allows buyers a decent-enough idea of a place that they’ve been putting in offers without ever setting foot on the property.
“Virtual tours have gotten pretty big. A lot of my clients have been buying properties sight-unseen,” says Kevin Hill, agent and owner of The Detroit Realtor.
“People are buying them and the first time that they’re seeing them in-person is at the inspection. You have to be creative.”
When houses are shown, the usual precautions are taken; face masks and sanitizer abound and capacity limits are in place. And Realtors stress that despite their clients relying more and more on technology in their home-buying experiences, it still comes down to creating a good experience for home buyers and sellers alike.
Here are the neighborhoods to watch, according to Realtors who spoke with Model D.
East English Village
Mark Culpepper, a Realtor with Keller Williams in Royal Oak who often does business in Detroit, says that high-quality, more historically authentic homes have been what sell fast in the city. He doesn’t expect that to change in 2021.
Mark Culpepper says historical properties, such as midcentury homes, and neighborhoods like Southwest Detroit are popular right now.“Whenever something built midcentury goes on the market, it disappears in two days,” he says. “And the more original the house is, the better. Don’t mess it up by covering your kitchen in gray and white paint.”
Charming homes built in the first half of the 20th century is somewhere Detroit excels, from one end of the city to the other. Culpepper points to a neighborhood like East English Village, with its strong housing stock offered at an affordable (relative to similar homes found elsewhere) rate, as an area to watch in 2021.
East English Village has been a neighborhood high on Realtors’ lists within the past couple of years and that’s not going to change any time soon.
“In East English Village, you have these big, beautiful houses selling for not that much money. And you’re close to the Grosse Pointes and all of the amenities there,” Culpepper says. “They all have great potential there.”
Cooley agrees. There are a number of east-side communities he points to as real estate hot spots for 2021, trends that are expected to carry over from 2020. These neighborhoods include Jefferson Chalmers, Pingree Park, and the area just east of Indian Village.
“In some of these neighborhoods like East English Village, you’re better off buying an existing home, one that is more beautiful than what the same price could build for a new one,” Cooley says.
“Construction prices are too high to recreate these homes.”
One trend wrought by the COVID-19 pandemic is consumers focusing more on single-family homes with yards to call their own. With people working from home, Cooley sees a greater demand in the more spacious neighborhoods outside of the city core rather than the stacked condos and apartments of greater downtown Detroit.
It’s a result, he says, of people not needing to be close to their downtown jobs. So why not enjoy some personal space? Or so the thinking goes.
The shuttered bars, restaurants, and entertainment venues don’t help.
“With a lot of people working from home, it affects the office market, which then affects the housing market. Will we see people return to their offices? If it happens then they’ll still want to live close to downtown,” Cooley says.
“There’s a direct correlation between bars and restaurants being shut down and people wanting to live downtown.”
One such area is the network of neighborhoods that make up Southwest Detroit. Located outside of the downtown core, Southwest Detroit includes neighborhoods like Hubbard Farms and Mexicantown, neighborhoods that real estate agents like Culpepper increasingly find themselves bringing clients.
If someone can’t find a place in the greater downtown, he says, then chances are that Southwest Detroit is the next place they’ll go.
“I’ve sold homes in Southwest Detroit and I really like those neighborhoods. The homes are maintained well. There’s a great sense of community. It’s got good bones, architecture,” Culpepper says.
“It’s a cool, upcoming spot. And it has great commercial aspects in Michigan Avenue and the area around Clark Park.”
Corktown and North Corktown
While the increased popularity in single-family homes witnessed by Realtors may point to trending neighborhoods outside of the downtown core, Realtors like Kevin Hill remain high on downtown and its nearby neighborhoods. The complete transformation of Brush Park, for example, with several blocks of brand-new condos and townhomes, is becoming an increasingly popular area for the doctors, lawyers, and professional athletes who are more frequently moving to the city, he says.
“We’re seeing a greater demand for the luxury market,” Hill says.
Still, Hill acknowledges last year’s COVID-19 trend toward single-family homes. Though, to be fair, the Realtors we interviewed each expect that greater downtown’s apartment and condo market will bounce back as we wrest control of the pandemic.
“I’ve seen a lot of growth in the neighborhoods,” Hill says. “For a long time, the focus has been on downtown. But people are more and more interested in single-family homes.”
Though it may not be news to anyone, Corktown is becoming even more popular in the real estate market. Photo by David Lewinski.Though it may not be news to anyone — and if not considered downtown, then certainly downtown-adjacent — the neighborhoods of Corktown and North Corktown are becoming even more popular places in the real estate market. And while Corktown has long been a favorite, with its central location, vibrant commercial district, and historic character largely intact, North Corktown has lagged behind in that regard.
While innovative land-use projects like urban farms have anchored North Corktown’s vacant parcels in recent years, the neighborhood is beginning to see new construction projects throughout. Realtors expect that 2021 will only increase the popularity of North Corktown real estate as Ford Motor Company’s transformation of Michigan Central Depot and the surrounding blocks into its 21st-century mobility campus could dramatically alter the nearby neighborhoods — socially, economically, and otherwise.
Cooley, for example, recently had a client close on a newly constructed home in North Corktown for $390,000. That’s a sentence that would have been hard to imagine 10 or 12 years ago.
“With Ford and the train station, we will see a lot more activity and construction around here. It doesn’t feel real in some ways without all the people, but that will start to take shape in 2021,” Cooley says.
“It will be interesting to see how it plays out up there. Any time you have hyper-development like that, things can go haywire. How will everything fit in with the existing people already there, or aesthetically with the existing homes, or adding new density?
“There’s a lot of vacant land there, probably the most vacant land closest to downtown.”