Study: Artists Boost Home Prices in Desolate Downtowns
In Detroit, the Urban Legend Is Fact -- and We Have a Chart and Records to Prove It
Can low-income artists really revive dying downtown real estate? The answer in three Detroit zip codes is "YES."
FNC senior statistical analyst Sankar Bokka examined a neighborhood near downtown Detroit where artists have transformed crumbling buildings into homes and small businesses. Bokka studied price trends in the North Corktown neighborhood, where a community development organization sold discounted homes to artists, musicians and members of the creative community. He also tracked two zip codes along the Cass Corridor which has attracted artists, musicians and cool bars, despite high rates of drug and prostitution crimes.
Bokka's chart shows home prices inflated rapidly along with the real estate bubble, then plunged when the bubble burst. But prices bottomed out in August 2009 and are now trending higher. The small population makes the ups and downs more jagged since a single home sale has a bigger impact. But housing prices mostly stayed above their purchase value and are recovering steadily.
For his research, Bokka used FNC's Residential Price Index™, which contains 78 million more records than other residential price indexes and can calculate across the spectrum -- micro-trends in a few zip codes or trends sweeping across cities.
"Sometimes statistics can capture the effect something as ephemeral as hope or determination has on a neighborhood," said Bob Dorsey, FNC's Chief Data and Analytics Officer. "Our holiday wish for Detroit is that home prices across the city will move up as part of a prosperous new year."