With limited inventory in downtown Detroit and Midtown in 2017, due in part to the delay of a few development projects, the Lafayette Park/East Riverfront District recorded the highest volume gain in condominium sales — up 38 percent to $23.7 million — over the same period in 2016.
According to figures released today by Berkshire Hathaway Home Services and The Loft Warehouse, located in Detroit’s Eastern Market (the two organizations partnered in 2017), the overall condominium market in Detroit recorded an average price increase last year of 9 percent to $223,000 over the same period in 2016.
This year, added inventory should propel sales and prices further, with new and converted condominiums coming on line, including the Fort Shelby in downtown Detroit, Great Lakes Tower at Harbortown, the Selden in Midtown, and City Modern in Brush Park.
“We were projecting growth in the Detroit market in terms of new units last year, and that growth has shifted to this year,” says Jerome Huez, president of Berkshire Hathaway Home Services and The Loft Warehouse. “We are working very closely with the Detroit City Council to receive final approvals for NEZ status (Neighborhood Enterprise Zones) for some of these projects (reduced property taxes).
“There is more confidence in the city, people who are renting are looking to buy, the city is four years out of bankruptcy, and we’re seeing condo prices rise while interest rates are likely to go up. We’re seeing quite a number of people coming in from the suburbs and drawn to Little Caesars Arena, all the new and existing restaurants, and all of the memorable shows, operas, concerts, and activities.”
While the central business district, Midtown, Lafayette Park, and the East Riverfront District have drawn the most interest among condo buyers and apartment renters, Huez says Corktown will pick up this year as new projects come on line at the former Tiger Stadium site at Michigan and Trumbull (The Corner by Larson Realty Group) and Elton Park just east of the stadium site (Soave Real Estate Group).
Here are highlights of Detroit condominium market:
Overall Detroit condo market:
- The 2017 average condo price has increased vs. 2016 from $204,000 to $223,000 (up 9 percent). In terms of price per square foot, the increase was from $161/sf to $179/sf (up 11 percent).
- The number of transactions has reduced from 345 to 315 (down 9 percent).
- As a result, the Detroit condo market volume stayed the same at $70 million compared to 2016 due to a lack of new inventory. Additionally, new inventory such as Great Lakes Tower (95 units, 10 closed) at Harbortown, Fort Shelby (56 units, 23 under contract) in downtown Detroit, and the Selden (12 units, 10 under contract) in Midtown are coming on line this year.
- Midtown (48201) dropped from it top ranking to 2nd place with a sales volume reduced from $27.5 million to $16.9 million (down 39 percent).
- Lafayette Park/East Riverfront District (48207) is the new leader with a significant increase from $17.2 million to $23.7 million (up 38 percent). This shows that, as inventory is lacking and prices go up, buyers explore opportunities further from the downtown/Midtown area.
- The Westin Book Cadillac remains the market leader, by far, with resales now averaging $500/sf, which means $600,000 or more for a standard two bedroom/two bathroom residence.
- The Grinnell Lofts in Corktown achieved the 2nd best performance averaging $387/sf due to its close proximity to downtown Detroit, freeways, and the Detroit River.
- New construction projects such as Selden (Midtown) and the Ashton (downtown Detroit) have pre-sales in the $400/sf-$450/sf range.
- Other new inventory such as Fort Shelby, Saint Charles (West Village), Willys Overland (Midtown), and City Modern (104 units, approximately 50 under contract) showed great activity and sales and pre-sales in the $300/sf-$350/sf thus confirming the need for more inventory.