According to a study by the University of Michigan, Black homeowners in Detroit have gained $2.8 billion in home value in the past decade. The study entitled “The Growth of Housing Wealth in Detroit and its Neighborhoods: 2014-2022” concluded that the added home value of Black homeowner-occupants in Detroit rose by 80 percent between 2014 and 2022. This news is a major milestone for Detroit’s Black homeowners and real estate agents.
“For the past nine years, the active members of 600 organized block clubs and neighborhood associations in the city have been working to rebuild their neighborhoods. The $3 billion in new home wealth they have created and earned is a result of their dedication and hard work,” Mike Duggan, the Mayor of Detroit said about the city’s skyrocketing home value.
In July 2013, Detroit filed for Chapter 9 bankruptcy becoming the largest U.S. city to file for bankruptcy. The study consequently analyzed changes in Detroit’s housing values for the nine years following the city’s municipal bankruptcy to understand how much growth has happened and whether it has been equitably distributed across neighborhoods and racial/ethnic populations. It found that the net value of all owner-occupied homes increased from $4.2 billion in 2014 to $8.1 billion in 2022. Black homeowners had some of the largest gains in wealth, with their home values rising from $3.4 billion in 2014 to $6.2 billion in 2022.
Additionally, the study shows that neighborhoods that were struggling in 2014 have seen the biggest increase in value. While neighborhoods that had the lowest values experienced a nearly 300% increase in value, those of comparatively middle and high value saw increases of 99% and 131%, respectively. The Condon neighborhood, which had one of the largest rises in value saw the average home sale price rise from around $7,500 in 2014 to more than $71,000 in 2022.
The study attributes Detroit’s net wealth gain to its great reduction in tax foreclosures. The City and a coalition of partners such as The Rocket Community Fund, Gilbert Family Foundation, Eastside Community Network, and others have helped to reduce tax foreclosures by 95% since 2016. Detroit Mayor Mike Duggan has credited the neighborhood rebound to committed residents who have fought hard to keep their communities stable as the city worked to recover.
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The results of the study are no surprise to realtors and real estate agents who have been seeing the changes happen in real time over the past several years.
“There has been a huge shift for the better in Detroit’s home values, driven largely by the improvements being made in neighborhoods. My fellow realtors and I have been seeing this shift for years. Black-owned homes are rising in value and Black families are gaining the most family wealth. And while home values have risen dramatically, there is a lot of growth yet to come. Detroit homes are beautiful and dollar-for-dollar still a great value.” said Ken Scott, past President of the Greater Detroit Realtist Association and Detroit Association of Realtors.