DETROIT, MI – Metro Detroit home values were up 16.5 percent year-over-year in the first quarter of 2014, according to real estate tracking firm Zillow’s latest real estate market report, released Tuesday.
Not to be confused with median selling prices, Zillow arrives at its home values indices by taking the median estimated home value on its database for any given day, and includes all residential real estate, regardless of whether it sold within a given period.
Metro Detroit home values are expected to continue to grow this year, albeit at a slower pace. Zillow is forecasting a 3.6 percent rise through the first quarter of 2015.
Nationally, home values increased 5.7 percent year-over-year in the first quarter. Zillow expects national values to rise another 3.3 percent through the first quarter of 2015.
“The lows of the housing recession are becoming an increasingly distant memory as home values reach new highs and homes become more expensive than ever in many areas,” Zillow chief economist Stan Humphries says in Tuesday’s report. “This is a remarkable milestone coming only two and a half years after the end of the worst housing recession since the Great Depression, and is a testament to just how robust this housing recovery has been.”
At the same time, the recovering real estate values have not affected affordability in many markets, Humphries said. This could be said of the Detroit market, where decent homes are listed for as little $20,000 or even less.
But there are still barriers to buying rock-bottom real estate in Detroit. One problem, said Embry Webb, immediate past president of the Detroit Association of Realtors, is that many of the homes listed for ultra-low prices in the city are not considered habitable by mortgage lenders, so they won’t lend money.
That problem has been compounded by scrappers, who prey on the copper wiring, radiators and other valuable materials of homes that sit empty. That also leaves Detroit with a smaller inventory of sell-able homes.
Meanwhile, we’ve been hearing some anecdotal scenarios of people being priced out of their apartments, especially in downtown Detroit, as the city is further redeveloped.
According to Zillow’s rent index, Detroit rental rates were up by about 3.5 percent year-over-year in the first quarter of 2014. Zillow arrives at its value by taking the median rent estimate on its website database for a given geographic area, including all single-family homes, condominiums and apartments, regardless of whether they are currently for rent.
