News Summary
Detroit is witnessing a notable increase in the inventory of newly constructed homes, particularly upscale townhomes and single-family houses, especially in the greater downtown area. While the starting prices for these homes are significantly higher than the city’s median asking price, some projects have faced slower sales due to high construction costs, elevated property taxes, and the shift to remote work. Developers like Robertson Brothers Homes and Greatwater Homes are leading these efforts, with new projects and temporary pauses in development in response to market conditions.
Detroit is experiencing a modest but significant increase in the inventory of newly constructed for-sale housing, particularly upscale townhomes and single-family homes. This trend, which was uncommon a decade ago, has gained momentum over the past six years, especially in the greater downtown area where demand for new homes has begun to rise.
The prices for these new construction homes currently start around $350,000, a notable figure that stands considerably higher than the median asking price for residential listings throughout the city. Most buyers seeking new homes in Detroit are typically employed within the city limits, contrasting with many suburban homebuyers who are more inclined to live in the suburbs.
Despite the optimism among developers regarding Detroit’s long-term growth potential, some recent townhouse projects have experienced slower sales than expected. Various factors are influencing this trend, including high construction costs, Detroit’s elevated property taxes, increased nationwide mortgage rates, and the growing prevalence of remote work arrangements following the pandemic. Notably, major employers such as General Motors and DTE Energy now offer remote work options, which has contributed to a decline in demand for homes located near workplaces.
One significant player in the Detroit townhome construction market has been Robertson Brothers Homes. This developer has led multiple successful projects, notably on sites such as the former Tiger Stadium. Current developments include:
- Scripps District on Trumbull Avenue, with homes starting around $380,000
- The Townes at Pullman Parc near Lafayette Park, with prices starting at $460,000
- Avery Place in Woodbridge, with homes starting at $365,000
Due to the recent dip in demand, Robertson Brothers will temporarily pause new townhouse developments to reassess market conditions. Furthermore, the first phase of Pallister Gardens in New Center has successfully sold homes ranging from $349,000 to $485,000, with construction for the second phase nearing completion. Another noteworthy project, City Modern in Brush Park, sold its last homes—totaling 105 townhomes and carriage homes—between $1 million and $1.35 million by 2024, with three out of four buyers indicating employment in the city and many affected by the remote work trend.
Additionally, the East Village development marks a significant return of large-scale projects for single-family houses in Detroit, with plans for up to 200 homes on previously vacant lots. Developed by Greatwater Homes, these residences are priced between $350,000 and $550,000, aiming to provide a modern housing solution for residents relocating from older homes or suburbs. Greatwater Homes has faced various challenges as there are few precedents for new single-family construction in Detroit.
The East Village houses are being constructed within a Neighborhood Enterprise Zone that offers financial relief by freezing property taxes at pre-improvement levels for 15 years. Feedback from prospective buyers has been largely positive, reflecting strong interest in new housing options. Successful sales in the area highlight buyers’ growing emphasis on energy efficiency and reduced utility expenses, which are key considerations for today’s home buyers.
Moreover, multiple new developments in Corktown, such as The Coachman and The Eleventh, have either sold out or are nearing completion, with prices ranging from the high $300,000s to high $700,000s. Additionally, an architect from Detroit is preparing to list a new two-bedroom ranch house in North Corktown, priced at $498,000, a rarity in this area and indicative of the changing housing landscape in Detroit.
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Additional Resources
- Detroit Free Press: New Home Construction Options
- Patch: Oversupply of Homes Affecting Metro Detroit Real Estate Sales
- Axios: New Home Construction and Affordable Housing in Detroit
- Detroit Is It: Pioneering New Home Development in Detroit
- Detroit News: Uneven Housing Revival in Detroit
