|Anne Parsons, president and CEO of the Detroit Symphony Orchestra, and her husband, Donald Dietz, a photographer, in their new home. Photo: Jason Keen|
Last year, Kirsten Iverson and her husband, Marcus, bought a new riverfront home on the east side of Detroit, an area once obscured by junkyards and abandoned industrial buildings.
Their 5,050-square-foot home in the gated Morgan Waterfront development has water views, five-bedroom suites, two garages, and a marble foyer with 18-foot ceilings. The couple paid $580,000—easily half or one-third of what a comparable unit would cost in many other U.S. metropolitan areas.
“Every day I wake up and I’m just like—‘This is a dream come true,’ ” said Ms. Iverson, a 34-year-old attorney who commutes 15 minutes to her office downtown. Daughters Madison, 4, and Maci, 2, watch summer fireworks over the Detroit River from their lawn.
Detroit is living up to it 1805 motto—“Resurget cineribus”—as it rises from the ashes. Corporate investment, tax credits for developers, and federal funding are helping erase decades of blight. Thousands of jobs have been created and moved downtown since 2010, with the arrival of Quicken Loans, Blue Cross Blue Shield MI, and new tech startups. More than 7,700 derelict buildings have been razed through the city’s blight-removal program; some vacant lots have been transformed into micro farms that supply the city’s trendy new restaurants.
Detroit’s distinctive urban lifestyle is attracting a new professional class to its downtown, where demand for affordably priced high-end residences has surged. Sale prices for the top 10% of Detroit’s real-estate listings started at $290,000 in 2015—nearly half the U.S. average for the luxury segment. That luxury niche is the strongest sector of Detroit’s housing market: Although the city’s 2015 median sale prices were still 22% below 2008 levels, prices for luxury homes more than doubled—12 times the growth rate of the U.S. overall, according to Realtor.com.
“That’s something we really don’t see anywhere else—it’s unique to Detroit,” said Javier Vivas, an economic researcher for the website. ( News Corp, which owns The Wall Street Journal, also owns Realtor.com, the listing website of the National Association of Realtors.)
New luxury developments are being built from the ground up for first time in decades. Residents can dock their boats in reserved slips at Water’s Edge, a bespoke community on the Detroit River with a private marina and two private lakes that opened in January. Rental prices for its 134 apartments range from $1,285 to $2,324 a month.
The Scott at Brush Park, a $64.5 million development with 199 apartments, will be completed in December. For $949 to $2,844 a month, renters will have access to a rooftop pool, outdoor kitchen and spa—as well as a pet-grooming station and on-site bike repair.
Dan Gilbert, Quicken Loans founder and a prominent Detroit developer, has acquired more than 85 properties and invested over $2.2 billion to date. This year, Mr. Gilbert’s Bedrock company will break ground on a new $70 million, 8.4-acre development in the historic Brush Park district with restored Victorian-era mansions, pedestrian greenways, shops, and 400 new residences.
Meanwhile, there’s stiff competition for rental apartments in landmark skyscrapers that have been transformed into well-appointed residences, some after standing vacant for decades. There are 176 people waiting for apartments at the David Whitney Building, a Gilded Age tower with a four-story atrium and boutique hotel, says leasing manager Michael Martorelli. There’s also a wait for apartments at the Albert, a circa-1929 building where residents can mingle at wine and cheese parties or shop for a $700 Detroit Bike on the ground floor.
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