The $100K Home May Soon be a Dream of the Past in Southeastern Michigan

Housing prices continue to soar in the Metro-Detroit region, and beyond.  According to the Case-Shiller Home Price Index, the average price of single-family dwellings sold was $154,160 in July of 2021; this was $1,560 higher than the average family dwelling price in June. Furthermore, the July 2021 price was an increase of $21,700 from July of 2020 and $56,030 from July of 2014. This means, that the average single-family dwelling was being sold for under $100,000 in 2014. The data below shows how pressed a homebuyer would be to find a home for such a price in 2019 (most recent American Community Survey), meaning it is even more difficult today.

According to the 2019 ACS data, Wayne County had the highest percentage of owner-occupied units that were valued at less than $100,000 at 44.8 percent. The percentage of owner-occupied homes valued at less than $100,000 available in Wayne County in 2019 was 24 percent less than what was available five years prior (2014). Wayne County experienced the smallest decline in owner-occupied units valued at less than $100,000, while Oakland County experienced the largest. In 2019, 12.5 percent of the owner-occupied units in Oakland County were valued at less than $100,000. That number is a 47 percent decrease in the percentage of owner-occupied units valued at less than $100,000 in 2014—five years prior.

While Oakland County had the largest decline in the percentage of owner-occupied units valued at less than $100,000 between 2014 and 2019, it was Livingston County that had the smallest percentage of owner-occupied units valued at less than $100,000 both in 2014 and 2019. In 2019, 8 percent of Livingston County’s owner-occupied housing stock was valued at less than $100,000 and in 2014 it was 14 percent (still the lowest in the region).

Overall, the data shows some of what we already know—particularly that housing prices continue to increase, and at a more rapid rate than in previous years. However, we also know that wages are not increasing with the rate of inflation, and for many, with the rate of increased home prices. As affordable housing continues to remain an issue, it is important to understand where those gaps are also growing at an increased rate. The data shows that, regionally, Wayne County had the largest percentage of homes available for under $100,000, with the number available decreasing at the slowest rate.

Majority of Detroit Home Problems Involve Water Inside

There are household problems, and then there are home problems. Home problems range from lead paint to inadequate infrastructure to high utility costs. The respondents of the 2021 Detroit Citizen Survey were provided a list of home problems and asked to identify which ones apply to their house or apartment. There were 570 respondents to this question and of those a total of 1,111 problems were identified.

High utility costs was the most common problem, which was identified by 275 people or 48 percent of the respondents. Water or dampness in the basement was the second most identified problem and plumbing issues was the third. Four of the five top problems (mentioned by 83% of householders) concern water in the home, and mold is later mentioned by another 9 percent. Water and dampness in homes is highly correlated with asthma, which is one of the most frequently occurring problems for children and adults in Detroit.

The University of Michigan recently produced a study titled “A Decent Home: The Status of Home Repair in Detroit,” which found that more than 24,000 housing units in Detroit are “severely or moderately inadequate,” but only about 3,000 residents were able to access funds to fix the problems. These funds are aimed at low income residents and provided through grants or loans.

A little background about Detroit’s housing stock, according to the US Census Bureau, 78 percent of Detroit’s housing stock was built before 1960. Of the occupied housing units in the City, 75 percent are worth less than $100,000. Additionally, 67 percent of the occupied rental units have rental prices of less than $1,000. The age of housing and its cost plays a role in ongoing home problems, as does the average income of a household. According to a Bridge Detroit article, 73 percent of Detroit renters earned less than $35,000 in 2019, and about half of those households spent at least 50 percent of their monthly income on rent in. This means either less money for home repairs or having to live in housing units that are less than desirable.

The City of Detroit does have a 0% Home Repair Loans Program that offers zero percent interest loans from $5,000 to $25,000 to help Detroit homeowners invest in and repair their homes. Projects that are eligible for funding through this program include correcting health and safety hazards, electrical repairs, furnace replacement, roof replacement and plumbing. Jefferson East Inc. and Rocket Community Foundations are two other organizations in the City that offer funding for home repairs