the country that has more unoccupied houses than Detroit,” Najor said. “My program specifically, the entire goal besides increasing occupancy in the neighborhoods is to address the problem of the appraisal gap. It’s incredibly tough to get houses to appraise out. The goal is to strategically choose the areas of renovation so it creates comps for others to get financing.” Only about 10 percent of home buyers in the city of Detroit used financing to purchase in the third quarter of 2017, according to ATTOM Data Solutions, which shows that 89.6 percent of all single family home and condo sales during the quarter were to all-cash buyers. All-cash sales accounted for 40.8 percent of all single family home and condo sales in the broader Detroit metropolitan statistical area in the third

quarter of 2017, up from 33.6 percent a year ago and the 17th highest share of cash sales among 98 metro areas analyzed in the ATTOM Data Solutions Q3 2017 Home Sales Report. BUILDING BOOM LIMITED BY WORKER SHORTAGE While older housing inventory is being demolished in some parts of the Detroit metro area, new housing stock is being built in other parts. The Home Builders Association of Southeastern Michigan is projecting that just under 5,400 building permits will have been issued in 2017, the highest yearly total since 2006. “The development within the city limits are multi-use or apartments. Most of the new home development is occurring outside the incorporated city

limits of Detroit but physically within 20 to 30 miles,” said Mike Stoskopf, CEO of the builders association. Stoskopf estimates that his region would be doing around 8,200 permits per year but is limited by a shortage of workers in the trade skills statewide. According to Stoskopf, a typical new home being built in the Detroit metro area is 2,200 to 2,300 square feet with a two- or three-car garage and a basement (not counted as part of the square footage). Including improvements and land cost the average sales price is around $380,000 — with ranch style houses go for a premium. “Fifty-five and over is becoming the emerging market in Southeastern Michigan. What happens there is the trend for the state. The people with money that can afford the new construction are probably 45 years

WHERE FLIPPERS ARE FLOCKING, AND FLEEING Q3 2017 Year-over-year Percent Change in Home Flipping -140% 140%

and over because they are established,” he said. •


City of Detroit

Detroit Metro


120% 100%

80% 60% 40% 20% 0%

Q1 2000 Q1 2004 Q1 2008 Q1 2012 Q1 2016

34 | think realty magazine :: march 2018

thinkrealty . com | 35

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