Median sale price for [City of] Detroit homes jumps 50%

[Lowell]

"The median sales price for homes in the city in August increased 50 percent year over year to $36,000 — the biggest jump in metro Detroit, according to new data released Thursday by Farmington Hills-based Realcomp Ltd. II. The number of total sales in the city increased 14.7 percent to 414." From Crain's

On the surface that sounds good, and up is always good, but the median is so far below the metro median of $176K as to make the percentage increase more dramatic than it really is. I am curious how much of that is boosted by higher new housing sales, removal of available properties by demolition and speculation created by Detroit's improving image. Housing supply remains low everywhere.

Nonetheless, it should bode well for Wayne County with its upcoming auction of tax delinquent properties as well as for the property tax coffers for both the city and county.

[renf]

The median is probably strongly influenced by the higher sales price of homes in the city's increasingly desirable and prosperous neighborhoods. Nevertheless, the Census Bureau's 2016 has some rather positive reports about employment and income in the Detroit area including the city.

[emu steve]

The median is probably strongly influenced by the higher sales price of homes in the city's increasingly desirable and prosperous neighborhoods. Nevertheless, the Census Bureau's 2016 has some rather positive reports about employment and income in the Detroit area including the city.

Not sure. Remember what the median does:

It ranks a series of numbers from lowest to highest and then picks the middle number. It is designed to correct the flaws inherit in using the mean or 'simple average' which can be influenced by 'extreme numbers. Some areas, e.g., Brush Park or along Cass Ave., might have multi-million dollar homes and old shells.

Now, if you are saying that more than 1/2 of the sales of houses in Detroit are in the more pricey, appreciating neighborhoods, then in fact the median would capture that. If the pricey, appreciating houses are say the top 20 or 30 or even 40% of sales, then the median would not capture that.

It is very possible that there are 'two housing markets' in Detroit:

1). Those housing units in more desirable, pricey neighborhoods which are showing a lot of activity and price appreciation.

2). The remainder which are lower priced, less activity and less price appreciation.

From what I read, it does appear that progress is being made in many neighborhoods so it might be that houses which may have sold for X thousand dollars 5 or 10 years ago might be showing decent appreciation as the neighborhood gets stronger with blight removed, street lights, etc. etc.

[rex]

I expect the area between corktown and woodbridge and west along Grand River to see development sooner than later. That neighborhood is maybe 75% empty lots already. Streets and sidewalks already in place. Close to the action.

[JBMcB]

Another factor is the demolishing of old, dilapidated housing. Though this would mainly effect the mean price, it also reduces overall housing stock, reducing supply and pushing up price as demand holds steady or increases.

Hopefully the mean price increases to the point where it's worth refurbishing the old homes instead of knocking them down.