Case-Shiller Index Shows 14% Growth in Metro Detroit Housing Market in January
Double-digit home price growth remains the norm, according to a national index that tracks home sales, as Metro Detroit’s housing market continues to post strong increases.
Detroit prices rose 14% in January from a year earlier according to the S&P Case-Shiller Home Price Index, which tracks the selling prices of homes sold in a month relative to their last sale. A 20-city index showed a 19.1% year-over-year increase for January, with prices inflated by huge sales increases in cities like Phoenix, Tampa and Miami, all of which recorded an increase of more than 25%.
Of the other Midwestern cities tracked by the index — Chicago, Cleveland and Minneapolis — Detroit saw the largest year-over-year increase. Detroit remains the most affordable city among these, and since the fall of 2019, prices have continued to hit new highs virtually every month.
“It’s a really good sign that Detroit is back,” said Lawrence Yun, chief economist for the National Association of Realtors.
Domestic supply remains tight in Detroit, as in much of the rest of the country, Yun said. But even with an appreciation as high as it is, he said the Midwest is the most affordable part of the United States and first-time buyers still have a chance here, as they are overpriced on many other markets.
“In the Detroit area, mortgage rate changes are not welcome, but they are easily manageable,” he said of buyers in the market. “Middle-income people should be able to buy a house.”
Ray McConville, spokesman for the S&P Dow Jones Indices, said it looked like every market was at an all-time high. In Detroit and elsewhere, he says, it’s hard to find sweetness in the market.
That’s playing out in local sales, where Leila Hamka, president-elect of the Dearborn Area Board of Realtors, said buyers continue to release contingencies and offer prices well above asking prices for homes. Low supply is persistent, she said, and people who have decided to move are adamant about it.
“Interest rates are rising, but the market is not slacking off,” she said.
Higher values are good for homeowners whether or not they plan to sell, said Randolph Barker, outgoing president of the Detroit Association of Realtors. It’s especially good for investors, he said, and it’s good for government coffers as property taxes go up.
“There are a lot of bang for your buck if you want to invest in Detroit real estate,” he said. “There is a viable exit strategy. It’s a hot market.”
Barker said he expects that to be the case for the next few months. And he wants the upward trend to continue.
The numbers are “very telling of what’s happening in our housing market,” said Bob Taylor, CEO of the Grosse Pointe Board of Realtors. He said the area still has many housing issues to address — research released this week shows Detroit has seen an increase in mortgage lending, for example, but still lags its peers. Racial disparities continue to exist in determining who has access to mortgages. And the burn still persists in a number of neighborhoods.
But Taylor said rising house prices show Detroit is a great place to live and raise a family.
“I think Detroit is a story of rebirth,” he said. “I’m happy with what I see.”