BBBI Address -
33583 Woodward Ave.
Birmingham, MI 48009
Birmingham is the most expensive neighborhood of Detroit MI area. Mostly upper class people live there. Executives of GM/Chrysler and doctors, investors etc.
GROSSE POINTE, Mich.—Just outside bankrupt Detroit, where thousands of homes are being sold this week at auction for as little as $500, real estate is hot again.
After years of slow sales and depressed prices, homes here in some of the wealthiest communities around the Motor City now receive multiple offers as inventory shrinks. Prospective buyers often carry big wads of cash, and some of the most sought-after properties change hands in super-secret "whisper listings," according to local brokers.
If the city of Detroit has run out of money, many home buyers in the region appear to be taking little notice.
"You try to get your people in the house the day it lists, because it might sell right away," said Pat Chasteen, a real-estate agent with Monaghan GMAC in Grosse Pointe Farms. She spent nearly every night last week closing deals and met her first client Friday at 6:30 a.m.
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Five years ago, when auto sales crashed and two of the Detroit Three auto makers filed for bankruptcy, car plants closed, thousands lost their jobs and those who held on were stripped of pay, benefits, and bonuses. But in recent years, the car companies have posted record profits, while salaried and union workers collected some of their biggest bonus checks in history.
Home prices are rising here as fast as any major metropolitan market in the country, attracting some new investors, said Jed Kolko, chief economist at Trulia, a real-estate website.
To be sure, Detroit and its suburbs are still digging out of a big hole. The region's housing lost about 36% of its value during the recession, and its value remains 28% below pre-recession levels, according to housing and mortgage-refinancing data tracked by the Southeast Michigan Council of Governments.
In addition, the Detroit region is still seeing little new residential construction. And the market has the nation's highest home-vacancy rate after suffering from two decades of the country's worst job losses.
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"We have a long way to go, but I think we're starting to turn a corner," said Brian Parthum, economic analyst at the Southeast Michigan council.
"What we know is that during the housing boom, Detroit did not do nearly as well as the rest of the country, and suffered more on the way down," said Craig Lazzara, senior director, S&P Dow Jones Indices. "But it's had a much bigger bounce off the most recent bottom."
Increasingly, it's a tale of two Detroits, the beleaguered city in bankruptcy court with few jobs and abundant vacant property, and the larger metropolitan region bouncing back gradually with falling unemployment and rising home sales.
Across four counties that comprise metro Detroit, the median home price jumped 48% in September over a year ago, and the number of sales rose 7%, according to sales figures compiled by Realcomp, a multiple-listing service in Farmington Hills, Mich.
"It's like someone turned off the water five years ago and just turned it back on," said John Hannett, a real-estate agent based in the tony northern suburb of Birmingham who has sold property for almost a half-century.
But the upswing in the market touches few places in the city of Detroit, where state-appointed leaders filed for bankruptcy protection in July, citing an estimated $18 billion in long-term debt. Sales in the city of Detroit fell last month 13%, compared with the same month a year ago. The median sales price of a home in Detroit last month was $11,000.
Real-estate agents say sales are up in the city's downtown and nearby Midtown, but that potential buyers are often frustrated by Detroit's high taxes, spotty public safety, shaky public schools and antiquated assessment system that often overvalues property and prevents traditional financing.
"I was very apprehensive about which areas were safe, but I never really wanted to move out of Detroit," said Lisa Card, a 41-year-old special-education teacher and mother of two who moved back from the suburbs and closed in August on a $74,000, three-bedroom, bank-owned house on the city's east side.
Foreclosures continue to haunt the city. This fall, Wayne County is trying to sell at auction 18,000 properties—90% in Detroit—that failed to pay their taxes for at least three years. In the first round of the auction, only 880 were sold. In the final round of the auction ending Oct. 25, bids start as low as $500.
Critics say the massive auction keeps real-estate prices in the city low. And new buyers often fail to pay taxes, pushing the properties back into tax foreclosure, said the county's chief deputy treasurer, David Szymanski.
Still, buyers outside the city like 34-year-old Stanley Adams, a pilot, and his wife, an automotive engineer at General Motors who was transferred back to Detroit, see now as the time to invest.
Last Tuesday, the couple living in northeast Ohio closed on a 3,000-square-foot, two-story colonial in Grosse Pointe Park, paying over list price after the property received multiple offers. The four-bedroom home, which was listed for $384,000, lasted six days on the market.
"We wanted close access to downtown where my wife works," Mr. Adams said. "But it's separated and somewhat insulated from the issues downtown."
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