Detroit homes grew an average of 23% in value over the past two years — a record increase, according to data from the city assessor’s office.
Mayor Mike Duggan said Monday that every residential neighborhood in the city saw home values increase in the past two years. Those gains aren’t evenly distributed across the city, but Duggan said in this case, that’s a good thing. “We are now seeing the neighborhoods that had lagged before, are now climbing the fastest,” he said.
And according to at least one study, Detroit is seeing the fastest property value growth in the nation, a fact Duggan took care to note. “Who would have ever thought we'd see the day … that the value of homeowners in Detroit is exceeding the rest of America?” he said.
It is indeed a complete reversal for Detroit from a decade ago, when following the Great Recession and foreclosure crisis, the city’s property values hit near-rock bottom. However, context is important — while exact numbers are hard to come by, it’s clear that median property values in Detroit remain well below those of other major cities.
The city’s real estate market is unusual in other ways as well. In recent years, most real estate transactions in Detroit weren’t used for assessment purposes because they weren’t considered “market sales”—traditional, arms-length deals, as opposed to cash sales or land contracts. That’s flipped somewhat since the COVID-19 pandemic, with one study finding that more than 50% of home purchases are now market sales. Still, a significant portion of the city’s real estate market continues to be non-traditional transactions, making it more difficult to get a clear sense of the housing market.
Duggan also stressed that despite the big jump in property values, Detroit homeowners shouldn’t expect to see a big jump in their property taxes. That’s because of a clause in the state constitution that caps yearly property tax increases at 5%.
Nonetheless, the city is encouraging Detroiters to appeal their property assessments if they think they’re inflated. The city has now permanently expanded the Assessor Review process from February 1-22, followed by a further appeals process at the city’s March Board of Review. Detroiters looking to appeal their property assessments can find more information and start the process at www.detroitmi.gov/PropertyTaxAppeal.
