With steady growth since the pandemic, the Michigan metro has climbed to No. 1 for the first time on the quarterly Wall Street Journal/Realtor.com Housing Market Ranking
Affluent home buyers looking for more bang for their buck should cruise on over to the Motor City, according to the latest Wall Street Journal/Realtor.com Housing Market Ranking, released Thursday.
Detroit has risen to No. 1 on the ranking of luxury housing markets, dethroning St. Louis from the top spot, which it held for the past five quarters.
“It’s been a long time coming,” said Dan Gutfreund of Sotheby’s International Realty. “The perception of Detroit has shifted dramatically over the last decade.”
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Once perceived as a “rebuilding city,” it’s now “entering into a luxury chapter,” with a “serious amount of cash flow coming back into the city,” he said.
A number of businesses have relocated to Detroit, with companies like Rocket Mortgage, United Wholesale Mortgage and StockX opening offices there over the past 10 or so years, Gutfreund said. Nearby University of Michigan, in Ann Arbor, has attracted medical professionals to the area, and of course, Detroit has always been the country’s automotive hub.
“Detroit has done a good job of diversifying and rebranding itself in terms of the companies and corporations there,” said Anthony Smith, a senior economist at Realtor.com, adding that the city has grown its tech, finance and healthcare sectors while still maintaining its presence as a center for the automotive and manufacturing industries.
Photo: Realtor.com
Photo: Realtor.com
The quarterly Wall Street Journal/Realtor.com Housing Market Ranking is based on key housing market data, as well as economic vitality and lifestyle metrics, for the 60 most-active luxury metropolitan areas in the U.S. The ranking aims to highlight metros that offer a high quality of life—accounting for factors like lifestyle offerings, traffic and commute times and climate—and that are expected to see future home price appreciation.
After Detroit, St. Louis; Charlottesville, Virginia; Santa Fe, New Mexico; and Salt Lake City rounded out the top five.
Though Detroit has consistently found itself in the ranking’s top 10 over the past year, even rising to second and third a few times, it’s never before topped the list.
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“The path that Detroit has had from once a city filing for bankruptcy after booming for so long to now finding its footing and finding its way back,” Smith said. “It’s really telling a story that very few other metros can tell, and I think we’re starting to see some of that play out in real time.”
In addition to executives and other business professionals relocating to Detroit, the pandemic also drove in buyers from pricier coastal cities in search of more space and lower cost of living to the area. The metro’s market has essentially remained a seller’s market ever since.
“Pre-Covid, we were at about 12 months supply, and during Covid it went down to about four [months], and now we’re roughly at 4.6, so it hasn’t changed much,” said Cory Richards of @properites Christie’s International Real Estate.
Luxury buyers in Detroit are split nearly 50/50 between local home shoppers and those looking to relocate, typically from coastal cities like New York and Washington, D.C. as well as Indianapolis, according to the report. Gutfreund said he’s also had buyers from Chicago and California.
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“Typically, if they’re working remotely, they can take advantage of our lower cost luxury living, in comparison to New York or Miami or Los Angeles, and have a really good lifestyle surrounded by equal-minded people and equal levels of affluence,” Gutfreund said.
Detroit and its surrounding suburbs give residents “more stability” and comfort, and “you still get a lot of the added benefit that these big cities offer,” Richards said.
Prices for Detroit’s 90th percentile of listings start at $721,625, according to the report, one of the lowest luxury entry price points in the ranking. However, Richards and Gutfreund both said that the entry point for the city’s ritzy northern suburbs of Birmingham and Bloomfield Hills is at least $1 million.
“You truly can’t get anything that is really turnkey for less than $1 million—that’s absolutely the bottom-level entry point into the Birmingham-Bloomfield market,” Gutfreund said. “To get something that’s a little bit newer, maybe more updates, you’re looking at $1.5 million to $2 million, easy.”
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