The Great Recession of 2007-2009 battered Detroit, perhaps more than any other U.S. city. Of the Big Three automakers – Ford Motor Company (NYSE: F), Chrysler and General Motors Company (NYSE: GM), which had provided the foundation of the city's employment base for decades – only Ford emerged from the crisis without requiring government intervention to remain afloat. Thousands of jobs disappeared amid the malaise. The city's unemployment rate exceeded 25% for a time in 2009. As of March 2016, Detroit still claimed one of the nation's highest unemployment rates at 11%.

With residents fleeing the city by the thousands in search of better economic opportunities, Detroit's real estate market has suffered. The median home value in the city, which stood at $62,800 in 2000, fell below $30,000 during the depths of the crisis. In Detroit's most blighted areas, houses went on the market for as little as $1 – and still went months with nary an offer.

Market Insights

Still reeling from the Great Recession, the median home sales price in Detroit was $32,000 in June 2011. Prices slowly began to come off their lows the following summer. As of May 2016, however, appreciation in Detroit has been minimal, with prices still well below where they stood during the 1990s and early 2000s. In April 2016, the median Detroit sales price was $39,900.

Over the five-year period studied, price and sales volume fluctuations throughout the year have been seemingly random, not coinciding with seasonal changes. This stands in contrast to many cold-weather U.S. cities, which experience increases in home sales and median prices during the summer months. In Detroit, the highest prices seen between 2011 and 2016 were in December 2015, when the median sales price reached $45,000.

Sales volume, while fluctuating wildly from month to month during some years, is low in Detroit. The most homes sold in the city during any one-month period from 2011 to 2016 was in October 2015, when Detroit had 380 home sales. For comparison, Phoenix had over 5,000 home sales during the same month.

Property and Transfer Taxes

Wayne County and the city of Detroit have some of the highest property tax rates in the United States. Because of the area's low home values, however, tax bills often are still very low in terms of dollar amount. For tax purposes, homes in Detroit are assessed at 50% of their market values. Homeowners pay city, county, state, education and community college taxes, all of which are calculated in mills. A mill equals $1 per $1,000 in tax-assessed value. The net millage rate for a Detroit home is 84.5.

A Detroit home with a market value of $50,000 – which is actually higher than the city's median – has a tax-assessed value of $25,000. Given a net millage rate of 84.5, the homeowner's annual property tax bill comes to $2,112.50.

Transfer taxes in Michigan include a state tax of $3.75 per $500 in real estate transferred and a county tax of 55 cents per $500. For counties with populations over 2 million, the rate is 75 cents per $500. As of 2016, no county in Michigan exceeds 2 million in population.

Most Expensive Neighborhoods

Detroit may be known for poverty and blight, but interspersed in its vast swaths of urban decay are several exclusive neighborhoods that are home to the city's elite. Many of these neighborhoods sit only a few miles from the city's slowly revitalizing downtown. Indian Village and Sherwood Forest feature large homes constructed during the 1920s and earlier, all situated on spacious lots with mature trees. Both neighborhoods provide access to greenery and the city's park system, offering convenience to downtown and the University district.

Upscale Detroit suburbs include Birmingham, Wolverine Lake and the aptly named Beverly Hills. All are in Oakland County, which, in stark contrast to the population loss of Detroit proper, has been adding residents throughout the 21st century.

Top Real Estate Websites

Perhaps because the city's real estate market lacks vibrancy, Detroit has fewer local real estate websites than other large cities. Several national real estate companies maintain strong presences in Detroit, including websites managed by local teams of agents in the city. Remax-Detroit.com is one such site, operated by local agents and featuring an extensive home search feature.

Otherwise, homebuyers can utilize sites such as Trulia, Zillow and Realtor.com, all of which provide access to Detroit MLS listings as well as information about broader real estate market trends in the area.

Indianapolis Real Estate Market

Related Articles
  1. Small Business

    5 Detroit-based Startups That Emerged This Century

    Learn how startups are changing the face of Detroit, a city long dominated by large corporations, and identify the specific Detroit startups leading the trend.
  2. Investing

    Find Your Dream Home For Less

    If you think you can't afford your dream home, check out these compromises that could make it happen.
  3. Insights

    The 5 Cities Where $50K Goes Furthest

    If you are comparing cost of living to see where a $50,000 salary will stretch the furthest, these 5 cities are at the top of the list.
  4. Managing Wealth

    The Truth About Real Estate Prices

    Historical housing price data suggests ongoing increases in housing prices, but these numbers don't tell the whole truth.
  5. Managing Wealth

    The 5 Most Expensive Places To Buy A Home

    Find out what makes these areas so desirable to live in despite the high costs of real estate.
  6. Personal Finance

    The Top 5 Under-the-Radar Cities for Job Seekers

    Don't be misled by 'Top 10' lists that rank cities purely on job growth. These cities get top marks for income growth and other key factors.
  7. Investing

    Best Places In The U.S. To Buy A Summer Home

    Here are the best spots in America to buy a summer home, based on price, exclusivity and other enticing features.
  8. Investing

    Ultra-Luxury Real Estate: What's Hot, What's Not

    And is this a good time to buy? Here's the 2016 forecast for luxury residences in seven global markets, from Shanghai to London to New York City.
  9. Managing Wealth

    The 5 Factors Of A 'Good' Location

    “Location, location, location” is a common mantra in real estate. And it’s good advice.
  10. Investing

    6 Cities Where Real Estate is a Buyer's Market

    In January real estate sales hit a 10-year high, but not all markets have a housing inventory shortage.
Frequently Asked Questions
  1. How do interest rate changes affect the profitability of the banking sector?

    Learn how interest rates affect the banking sector. When interest rates rise, the profitability of the banking sector increases.
  2. Is there a difference between capital gains and dividend income?

    Selling something for a profit leads to capital gains. A payment made by a corporations to stockholders is a dividend. Both ...
  3. What is an Islamic investment policy?

    Islamic investments are a unique form of socially responsible investments because Islam makes no division between the spiritual ...
  4. What Is The Prime Cost Formula?

    Prime costs are the costs directly attributed to the production of a product. Before calculating prime costs, direct costs ...
Trading Center