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US recovery drives demand for Detroit property

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The US housing market continues its slow and steady recovery, as house prices rise and construction climbs. The improving conditions helped to drive demand for property in Detroit last month, with tenanted homes in the city attracting some of the most enquiries on TheMoveChannel.com.
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Why These 5 Investors Are Interested in Detroit?

Why These 5 Investors Are Interested in Detroit

Detroit, Michigan was once a manufacturing mecca, a city where industry and production combined with a rich culture all built around the automotive industry. Recent years have shown a downward trend into citywide chapter 9 bankruptcy, and the perception of Detroit has become one of a dangerous ghost town. The reality is, it’s a city waiting to make a comeback; a city of rich history and great potential, and it’s something many people are beginning to recognize.
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OPEN FOR BUSINESS! DETROIT REGION AEROTROPOLIS DEVELOPMENT CORPORATION ANNOUNCES CEO, NEW NAME & MARKETING PLAN

 Taylor, Mich., July 18, 2013 — The Detroit Region Aerotropolis Development Corporation (ADC) today announced it  has hired a CEO, has completed a strategic marketing and organizational plan, and is rebranding itself as VantagePort.

Verna McDaniel, Washtenaw County Administrator and Interim ADC Chair, said “It took us longer than we had hoped  but we’re pleased to have a highly qualified CEO dedicated to leading our efforts. We conducted a public search, received  over 60 applications and after a complete review, we are confident that Tim Keyes is the best candidate to accomplish  what we want done.  Tim is very familiar with the Aerotropolis as he has been engaged to some degree with our work from the beginning, which will enable him to jumpstart the initiative and re-energize our efforts.”

“The Aerotropolis is a major driver of economic development in Wayne County and the state of Michigan as a whole,” said Wayne County Executive Robert Ficano. An ardent supporter of the concept from the beginning, Ficano added: “I am happy to see someone who has been involved in the project since day one, be named CEO. I have no doubt that Tim will be able to jump right in and continue to move the Detroit Region Aerotropolis forward. We look forward to working with Tim to make this happen.”

The ADC Board worked with Applied Storytelling, a brand management firm, to select the VantagePort name.

VantagePort hired Greyhill Advisors, a global site selection and economic development consulting firm, to prepare a strategic plan for the organization.  The Greyhill report will be used as a guide for VantagePort’s next steps. Some of the recommendations include:

  • Implementing a marketing and business development program, incorporating the new name
  • Identifying business targets by industry sector
  • Creating a formalized land development program
  • Developing the brand and value proposition and related materials

These recommendations will be executed by the newly hired CEO, Keyes, who said, “I am honored and excited to be a part of moving this vision for Southeast Michigan forward.  With our new VantagePort brand and our strategic marketing and organizational plan, I’m ready to hit the ground running.  I look forward to working with our many partners to achieve success.”

“The development of the Aerotropolis was identified as a key component in accelerating growth in Southeast Michigan in Business Leaders for Michigan’s New Michigan strategy and in Detroit Renaissance’s Road to Renaissance initiative,” said Doug Rothwell, President and CEO of Business Leaders for Michigan.  “We have tremendous assets we can leverage to grow our state’s economy, including a world class airport, surrounding land available for development, a unique geographic location and a skilled workforce.  Now that we have a CEO of Tim’s caliber in place, we can move with lightning speed to implement this effort.”

Wayne County Executive Ficano had long envisioned an Aerotropolis for the Detroit Region and the Detroit Region Aerotropolis was a part of the Detroit Renaissance (now Business Leaders for Michigan) Road to Renaissance strategy to help grow the economy for the entire Detroit region. The goal was to develop the area between and surrounding Detroit Metro and Willow Run airports into a global logistics hub for the movement of people, products and information. Over the long term, the Aerotropolis is projected to attract more than 60,000 jobs to the region and more than $10 billion of additional annual economic activity with an aggressive business attraction effort.

Members of the ADC include: Wayne County, Washtenaw County, Belleville, Huron Township, City of Romulus, City of Taylor, Van Buren Township, City of Ypsilanti, Ypsilanti Township, Wayne County Airport Authority, Business Leaders for Michigan and DTE Energy.

Additional information is included on the enclosed VantagePort Fact Sheet.

Verizon trying to be a little less secret about its secret metro Detroit facility

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After a frigid and molasses-like start to the year, the metro Detroit housing market has blossomed this spring into a seller’s market.

On the flip side, would-be buyers should brace for some frustration — unless they’re paying in cash — because the competition for a limited number of move-in ready homes is even fiercer than it was last year.

Realtors report that houses in the suburbs are regularly fetching at or near their asking price, and in many instances above it.

As buyers become frustrated by the slim pickings on the resale market, home builders are seeing a surge of interest and sales. Building activity in the metro area is projected to soon return to 2007 levels.

Related: Home sales rise in Detroit’s historic mansion neighborhoods

Related: Detroit’s historic neighborhoods provide their own fun

Database: What are homes selling for in your town? Find out here

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Yet in the near term, the region’s housing inventory is expected to stay tight and continue to lift prices up from their  post-crash lows.

There are fewer borrowers underwater on their home mortgages, but many of them are waiting to see how high  prices will rise before they decide to sell — a strategy that keeps home inventories low.

“If you’re buying and selling, you’re going to be so happy when it comes to your sale,” said Realtor Andy Hargreaves  of Coldwell Banker Preferred in Plymouth, “but you’re going to be very frustrated when you try to buy (because of)

the lack of selection and the amount of competition.”

Competition grows

Extreme weather delayed the traditional start of this year’s house-hunting season as the number of listings and sales this winter were down from a year ago. But prices were up.

The median sale price within the four-county region of Wayne, Oakland, Macomb and Livingston was just over $115,000 in March, up from $85,000 a year earlier, according to data from the Realcomp multiple-listing service, which doesn’t count private sales or for-sale-by-owner transactions.

Overall, prices early this winter were back to spring 2008 levels and about 25% off their local peak in late 2005 and early 2006. That is according to the latest Standard & Poor’s/Case-Shiller Home Price Index.

Realtors say that the most desirable homes are now receiving multiple offers within hours of hitting the market.

“If you’re on the market and you’re actively trying to sell and you’re priced correctly, you’re likely going to sell in less than 90 days and you’re likely going to sell somewhere between 95% and 100% of what you’re asking,” said Lora Kazanjian of Max Broock Realtors in Birmingham.

Not all would-be buyers are prepared for the intensifying competition. Realtor Lynn Caldwell described how one of her clients has had to keep raising the maximum she is willing to pay in her search for a three-bedroom ranch in St. Clair Shores. Her initial budget of $180,000 is up to $250,000.

“It’s a very frustrating time to be a buyer,” said Caldwell of Sine & Monaghan Realtors.

Agents are seeing more cash offers among interested buyers as a strategy to beat out the competition. Those with large enough bank accounts to make an all-cash offer often triumph in bidding wars, and may get modest price discounts.

For Hargreaves, just under half of his nearly 275 sales in 2013 were cash deals. Some of those sales were to foreign investors in Asia or Europe who planned to rent the properties, he said, while others were to families who intend to occupy the houses right away.

Agents note that in some transactions which close as cash sales, a buyer may still obtain a loan behind the scenes for a portion of the sale amount.

“That way you were able to put yourself at the top of the list in a bidding war, but after the fact you pulled your cash back out and took advantage of the interest rates,” Kazanjian said.

Good for builders

The slim pickings in the resale market is good news for home builders, who are anticipating a fairly strong year in suburban Detroit despite the slow start this winter.

The number of new house permits is forecast to top 5,000 this year in the four-country metro Detroit region for the first 12-month stretch since 2007, said Michael Stoskopf, CEO of the Home Builders Association of Southeastern Michigan.

One of the fastest-selling new developments is Valencia Estates in Novi by Pinnacle Homes. Construction is under way on more than a dozen of the 38 available house sites that have sold since Jan. 1, with prices averaging just below $600,000.

“For the majority of our buyers, they’re building new because there’s not much on the (resale) market,” said Tracy Shinneman, the development’s sales manager. “I think people are just tired of the frenzy of getting into these bidding wars.”

Out in Orion Township, Scott Herkes and his wife, Cody Tucker, are building a two-story, four-bedroom house in the new Stonegate West development by Pulte Homes. About 40 of the Stonegate’s 140 house sites have been sold at prices ranging from $310,000 to $425,000.

The couple decided to go for new construction after trying to look around the Lake Orion area for a bigger house than their current one in Birmingham to accommodate their growing family. They offered just above listing price on a $280,000 foreclosure sale in Lake Orion, but were outbid.

Herkes said their new house is expected to be ready by late June or early July. But they won’t be selling their Birmingham house quite yet.

As they bought their existing house near the top of the local price market a decade ago, and have since made home improvements, Herkes said they are planing to rent the property as the market continues to rise.

“At least in the short term, to see where the values go,” he said.

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Investing in Detroit Real Estate: Would You Invest There?

Detroit

Detroit sure seems to be an on-going hot topic. The “hot” part of it being- the debate on whether investing there is a good idea or not. Different than most markets, I think Detroit is definitely a love or hate market. I’ve never heard anyone claim to be in the middle of the road on this one. Investors are either avidly against buying property there or they are so gung-ho about buying there that they will shout from the rooftop defending the opportunity.

Me personally? I have had no interest in investing in Detroit. Why? Two major reasons:

  1. I’ve heard too many horror stories from big name investors I know personally about how (and why) they have lost so much money there.
  2. Detroit has been much too unstable in terms of industry and population for my liking.

With that said, I do understand there are a lot of investors who swear they are making great money in Detroit and they also defend the industry growth there which suggests Detroit is bouncing back.

So? Buy There or Don’t?

I won’t tell you what to do, because quite frankly where you buy or don’t buy has no effect on me. All you can do is decide on your goals and what you are comfortable with and what you aren’t comfortable with. I can’t give the reasons as to why you should buy in Detroit because I don’t know them. I will leave that to the readers to comment and give their reasons why Detroit is excellent for investing. I have no worry that there won’t be quite a few defenders ready and willing to tell you why you should buy there!

All I can do is elaborate on my personal opinions on Detroit as a buying market. I consider myself a very high-level (not high-level as in status, but high-level as in viewpoint), big-picture person. The 10,000-foot view, if you will. My opinions are mostly based on buy-and-hold investing, not so much on flipping specifically. But the points can go towards either in some way at least. Here are my 10,000-foot view thoughts on Detroit, which you could also consider to be a “cons” list.

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INDEPENDENT ADVICE

Detroit Property Management has worked with investment funds and high net worth individuals in dealing with each stage of the investment process

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PORTFOLIO DEVELOPMENT

Detroit Property Management has built up a strong network of clients and professionals and is active in acquiring and disposing of properties on their behalf

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PROPERTY MANAGEMENT

Detroit Property Management has experience in developing property in the USA: Assessment of development proposals, Negotiation of contracts

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