The Housing Market May Be in the Best Shape Since the Great Recession
After a long uphill battle, it seems that the housing market is finally back on the rise from the great recession.
According to The Detroit News, Americans were buying new homes in this past December at the strongest pace in 10 months. This is an indicator of strong positive momentum in real estate.
New home sales shot up 10.8% last month to a seasonally adjusted annual rate of 544,000. December showed the third consecutive monthly gain since sales collapsed in September.
This surge almost reached the high sales rate of 545,000 in February 2015.
There was a sharp rise of 14.5% in the sale of new homes, likely a result of steady job growth dwindling the unemployment rate to 5%, as well as relatively low mortgage rates making them more affordable for the 32% of purchasers who are first time buyers.
The median sales price for a new home has fallen 4.3% over the past year, to $288,900.
This trend has even been seen in areas that suffered the most during the recession and the crash of the housing market, such as Detroit, MI.
The high demand for housing has forced buyers to look at alternative options besides popular metropolitan areas, such as New York City or Los Angeles.
What made Detroit such a hot spot recently was the discovery of mansion districts once owned by auto barons and wealthy business owners, who spared no expense to build homes from 1900 to 1929, as the Windsor Star reports.
Because Detroit’s poverty rate is more than twice the national average, many of the blue collar workers live in suburban areas, leaving many of the century old mansion districts up for grabs.
Buyers think: “Why not trade a two-bedroom apartment in Manhattan and have an 8,800-square-foot mansion in Detroit for half of that?” said Kenan Bakirci, an agent for Max Broock who for almost 20 years has focused on Palmer Woods and Sherwood Forest, two historic neighborhoods in north-central Detroit.
The Detroit neighborhoods filled with 4,000 to 7,000-square-foot beauties, have attracted buyers all over, from Paris, Panama, New York, Washington, and San Francisco.
Since the city filed for bankruptcy in July 2013, surprisingly, more tech start-ups and boutiques have opened, and international investors are buying more commercial property. Coupled with the rise of their housing market, Detroit could soon see an even bigger surge in housing demand.
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