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Opinion: San Francisco a model for Detroit

By Mark S. Lee The Detroit News June 10, 2018
San Francisco Skyscraper (4)

I saw Detroit’s potential future in the tech industry based on what I encountered — in San Francisco. While visiting my son there recently, I envisioned Detroit as an emerging technology and mobility hub attracting talent from across this region and country. 

I have been visiting San Francisco for over 30 years and to see “The City’s” (its local nickname) transformation has been significant. 

I have also been tracking the trials, tribulations and successes of Brian Clark, a native Detroiter and University of Michigan alumnus, who moved there five years ago to pursue his entrepreneurial journey in Silicon Valley. 

To Motor City residents, San Francisco was been long known for its Golden Gate Bridge, trolley cars, steep hills, the idyllic ocean side views and the backdrop for many TV shows and movies. But now, as part of Silicon Valley, it’s known as a technology hub that’s become a magnet for young people, engineers, entrepreneurs and innovators.
 

Upon my arrival, I walked around downtown and felt the energy and thought of Detroit’s burgeoning downtown with its enhanced and renewed vibrancy. I also thought about our city’s potential and ever-expanding presence in the tech space. 

My son, who relocated to San Francisco with his wife from Chicago, explained to me why so many young people are migrating from primarily the East Coast and parts of the Midwest. He also reminded me that the financial resources and tech companies flowing into San Francisco were key reasons for attracting young people with diverse backgrounds. 

And as I walked around downtown, it felt like I was surrounded by a number of recent college graduates working in the shadows of San Francisco’s historic downtown buildings. I also saw technology-based companies sprinkled throughout its core. 

 

This influx of people has driven housing prices while increasing the region’s overall cost of living to significant levels.

For example, I talked extensively to an engineer-turned-entrepreneur regarding his housing situation. He currently shares a two-bedroom, 900-square foot apartment for $5,600 per month with three other business owners. He simply stated he has no desire to move and is willing to stay because he’s an engineer and believes having accessibility to these types of opportunities are essential for business longevity. 

These costs, however, are driving some to live across the Bay in neighboring Oakland and other surrounding areas. 

Regardless, I was amazed by its energy, continued growth and thought about how San Francisco can be an example for Detroit.

There’s been much talk about our city becoming more economically diverse. While going down this path, Detroit continues to grapple with its historical political, racial and regional divide. While progress has been made, Detroit’s future, with manufacturing its core legacy, is tied to economic diversity, technology/mobility sectors and a strong entrepreneurial ecosystem.

San Francisco’s expansion into the technology sector has become an integral part of its local economy. 

As a Detroit native, I have seen the cyclical nature of the automotive industry. And challenges still confront our fragile neighborhoods. But as I see and hear stories about Woodward Avenue’s continuing reemergence, enhanced talk about Corktown potentially becoming a tech-based hub and the automotive industry continuing to align itself in the mobility space, I thought about it in the context of San Francisco. 

Mark S. Lee is president and CEO of the LEE Group

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Report: Detroit lands in top 20 of the hottest real estate markets in the U.S.

By Robin Runyan January 25, 2018



Trying to figure out the Detroit real estate market isn’t the easiest task, but we do know that good properties don’t last long on the market here. We also know that people love to look at Detroit real estate. Perhaps that’s what makes the Motor City one of the hottest markets in the country.





Realtor.com released their list of the “hottest” markets in the country for January 2018, according to how long houses stay on the market and by listing views in mid to large markets. 13 of the top 20 metro areas are in California (perhaps many are curious as to the astronomically high prices in the San Francisco/San Jose areas). Detroit and Columbus, Ohio were the only midwestern cities to crack the top 20.

This is the second month in a row for Detroit-Warren-Dearborn at the #19 spot. The median age of inventory—or how long the homes last on the market—came in at 68 days for Detroit.

As we’ve noted in the past, the Detroit housing stock varies greatly across neighborhoods. We keep searching for those elusive, fairly affordable move-in ready homes amid the high-priced condos in downtown and Midtown and complete fixer-uppers or foreclosures in many other parts of the city. It seems like many more people are doing the same.

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Forecast: Big demand for downtown Detroit housing

By Candice Williams The Detroit News August 24, 2017

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Neighborhoods within the greater downtown Detroit area are expected to see a demand for 10,000 new residential units during the next five years, according to a survey released Thursday by the Downtown Detroit Partnership.

The areas included in the Greater Downtown Residential Market Study are downtown, Corktown, Rivertown, Lafayette Park, Eastern Market, Midtown, Woodbridge, TechTown and New Center.

The figure reflects the demand for both market-rate and affordable-housing options — for sale and for rent.

“We’re seeing a continued demand for residential units, and that demand is increasing faster than the current supply of available units,” Eric Larson, CEO of the Downtown Detroit Partnership said in a statement. “There is a great opportunity in the city for developers for both market-rate and affordable units.”

Market-rate housing refers to dwellings rented or sold on the free market; tax credits for affordable housing frequently help finance construction by developers. Affordable housing is considered as being accessible to incomes between 30 and 80 percent of area median income. The median income for Wayne County is $48,100 annually for a one-person household, according to the Michigan State Housing and Development Authority.

The study notes that the average rent in a multi-family building in the greater downtown area is $1,703 a month for 862-square-foot unit. The average price for a 1,273-square-foot unit for sale is $338,263.

Findings in the study include:

  • There is demand each year for 1,230 to 1,500 new market-rate rental and for-sale multi-family units, and an estimated demand for 414 to 512 affordable rental and for-sale multi-family units.
  • Over the next five years, estimated demand for new market-rate rentals and for-sale multi-family units is 6,150 to more than 7,500 units. There will be a demand for 2,070 to more than 2,500 affordable units for rent or sale.
 
  • Nearly 76 percent of units developed since 2014 were market-rate and 24 percent are affordable, or income-restricted units.
  • Nearly 7,400 new units have been proposed and are in the pipeline throughout the greater downtown area.

Residential projects in the downtown area include 28Grand, expected to be complete this summer in the Capitol Park district. The project will include 133 market-rate units and 85 affordable units.

Construction is also underway on the $100 million City Modern development with 400-units in the historic Brush park neighborhood downtown. That project is expected to be complete by 2020.

The study showed that while there were 20 new rental buildings developed in the area since 2014, it still lagged behind forecast sales. Among those projects were the Malcomson Building on Griswold in downtown, Kirby Center lofts in midtown and Regis Houze in New Center.

In 2017, 1,750 new rental units were developed, but that is 150 to 1,000 fewer units than forecast demand, according to the study.

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