Strong demand for properties in Detroit sparks bidding wars
Despite the fact that the housing market has been flooded since 2006, finding a refurbished, ready-to-move-in property in Detroit has proven hard for both buyers and renters.
This increasing demand for refurbished properties in Detroit has sparked bidding wars among house hunters, especially for those looking for quality homes in decent neighbourhoods.
Most House hunters are faced with a market dominated by trashed foreclosed homes or homes that are owned by people who simply could not afford repairs or updates during times of recession. Most home owners are reluctant to put quality houses on the market if there mortgages are underwater and are waiting for higher prices to return.
“As soon as anything hits the market, it’s a stampede to get there,” Andy Hargreaves from Plymouth Realtor commented. “It’s not uncommon for us to see five to eight offers on a good home.”
Property sales in Detroit have seen a 1.2% annual gain throughout July, with a strong demand in the summer months according to the S&P/Case-Shiller home price indices. Despite this, the number of homes for sale in Detroit dropped nearly 29% in July from the same time last year, according to data from Realtor.com.
What’s more, most purchased properties in Detroit were bought faster than the national average. In July the median age of inventory in metro Detroit was 67 days compared with 97 days nationally.
Over the last year the property market in Detroit has also seen a tightened supply of properties in the tri-county area. Oakland County had a 5.7-month supply at the end of June compared with a 6.8-month supply in June 2010.
In Wayne County, there was a 6-month supply of homes in June 2010, which fell to a 5.5-month supply a year later.
In a normal market has 3-6 months – anything over 6 months is a buyer’s market, and less than 3 months is a seller’s market.
These factors have contributed to what property experts have named a ‘bidding war’ for ready-to-move-in properties in Detroit.
Buy-to-let properties in Detroit have become a popular option for investors looking for strong rental yields and potential capital appreciation. Working with property specialists, investors can purchase refurbished houses through professional management companies who offer pre-tenanted options for an instant income.
With tenancies in place for 12 months – and most tenants looking for long terms lets due to lack of available, quality housing – this is a hassle-free way for purchasers to generate income from the property market in Detroit.