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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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16 Best Places to Buy Rental Property in the Year 2018

By Kathy Fettke December 5, 2016

The best places to buy rental property for cash flow and equity growth often have three things in common: job growth, population growth and affordability. When you find a market that has all three of these factors, you’ll probably be able to find good investment opportunities.

The Best Cities To Invest in Rental Properties in 2018 [Free Investor Guide]

There are several cities across the United States where these factors exist today — places where you can buy high cash flow rental property while prices are still low (around $100,000 in many cases), and watch your equity grow.

In this article, which was updated for quality and accuracy on January 16, 2018, you’ll learn about 16 of these “best-buy” real estate markets for the year 2018. Find out what makes them great places to invest and why. Note: These markets are not listed in any particular order.


TABLE OF CONTENTS

Click to to read by section.


Part 1: Orlando, Florida

The demand for single family homes has been on the rise in the Sunshine State for quite some time. Still, it’s possible to acquire fully renovated properties in good Florida neighborhoods for under $125,000.

What’s even more interesting is that, despite these incredibly low housing prices statewide, many home seekers are choosing to rent instead of buy. As you can imagine, this is causing rental rates to skyrocket (approximately 8% just this year)!

On top of great cash flow, values are on an upswing in these areas with no sign of slowing down. They are nowhere near their 2006 highs and inventory levels are still way down because builders just can’t make a profit at these price points.

Property taxes and insurance are low, plus there’s no state income tax. Add warm weather and exceptional health care, and you can see why many of the 10,000 baby boomers retiring every day are moving to Florida.

Orlando is one of the best places to buy rental property in the state of Florida in 2018. Located in Florida’s “sun belt” region, the area is known for its warm climate, beautiful beaches, world famous amusement parks, entertainment, and attractions.

With a combined population of 3.3 million residents, the Orlando real estate market is fueled by job seekers, baby boomer retirees, and students who want to live in a “cheap and cheerful” area that offers a high quality of living at a reasonable cost.

Orlando Market Statistics

  • Median Sales Price: $188,000
  • Median Rent Per Month: $1,360
  • Median Household Income: $42,000
  • Population: 2.4 M
  • 1-Year Job Growth Rate: 4.20%
  • 5-Year Equity Growth Rate: 66.40%
  • 5-Year Population Growth: 14.20%
  • Unemployment Rate: 4.5%
Orlando Florida Real Estate Market Trends & Statistics for 2017 Infographic
 

Orlando Market Quick Facts

  1. Metro Orlando is the 4th largest metro area in the country, and it’s also the 16th fastest growing metro in the nation.
  2. Forbes reports that 60 million people visited the Orlando area in 2015, making it the most visited tourism destination in the country.
  3. The population in Orlando has grown 41% since the year 2000. To date Metro Orlando houses over 2.3 million residents.
  4. Rents grew by 3.4% in the last 12 months, which is higher than the national and state levels.
  5. Orlando’s projected job growth for the next ten years is the second-highest (3.2% annual growth) in the United States among the 200 largest metros, Forbes reports.
  6. Orlando Medical City boasts a $7.6 billion economic impact and will create 30,000 jobs.

Conclusion: Top 3 Reasons to Invest in Orlando in 2018

As mentioned, most of the best real estate investment markets have three factors in common: job growth, population growth and affordability. Orlando is no exception…

Job Growth: Orlando’s employment growth is among the best in the U.S. with more than 173,900 jobs created since the recession and a projected growth rate of 3.2% annually for the next ten years.

Population Growth: Orlando’s population has grown 217% faster than the national average over the last 5 years, and with all the new jobs coming to the area, it’s very likely this trend will continue in 2018.  (This means the demand for housing is likely to increase.)

Affordability: In Orlando it is still possible to purchase fully renovated 3-bedroom properties in good neighborhoods for as little as $122,500.


Best Real Estate Markets 2017: Tampa, Florida

Part 2: Tampa, Florida

Located on the west coast of Florida, Tampa Bay is a densely populated metropolitan area (second only to Miami), with a population of more than 4 million people. Major cities in this area include St. Petersburg, Largo, Clearwater, New Port Richey, Holiday and Tampa.

The local economy is worth of $130 billion and the metro area has been ranked as one of the top 20 fastest growing in the country. Tampa also has a strong local economy with a strong focus on job growth in areas such as financial services and healthcare.

The Greater Tampa Bay area is worth over $130 billion and is consistently ranked among the top 20 fastest growing metro areas in the country. More than 19 firms with annual revenues of more than $1 billion are headquartered here and it is home to four Fortune 500 companies.

Tampa Market Statistics

  • Median Sales Price: $136,000
  • Median Rent Per Month: $995
  • Median Household Income: $43,514
  • Metro Population: 3.0 M
  • 1-Year Job Growth Rate: 2.10%
  • 5-Year Equity Growth Rate: 4.60%
  • 5-Year Population Growth: 8.70%
  • Unemployment Rate: 4.60%
Tampa Real Estate Market Trends & Statistics 2017-2018 Infographic
 

Tampa Market Quick Facts

  1. Tampa has a population of 4 million, a local economy worth over $130 billion, and the it’s ranked in the top 20 fastest growing metros in the United States.
  2. An area with mostly high-priced homes, Tampa still has pockets where investors can find homes at affordable prices (even as low as $90,000) and turn around to rent them for $950 a month to $1,250 a month.
  3. New jobs from Amazon and a talent pipeline from the University of South Florida helped push the Tampa metropolitan area to the No. 15 spot on the Milken Institute’s 2018 index of best-performing cities in the United States.
  4. The area has numerous strong Fortune 500 companies including Publix Super Markets Inc., Jabil Circuit Inc., and WellCare Health Plans, Inc.
  5. Tampa remains a fantastic tourism market. It’s a popular option for retirees as well, providing for many short-term rental opportunities.

Conclusion: Top 3 Reasons to Invest in Tampa in 2018

As you’ve learned, when a real estate market has job growth, population growth and affordability, you’ll likely be able to find good investment opportunities. We believe Tampa is one of the best places to invest in real estate in 2018 because it has all three.

Job Growth: The Tampa metro area is ranked #15 on the Milken Institute’s 2018 index of best-performing cities in the United States

Population Growth: Tampa has a population of 4 million, a local economy worth over $130 billion, and the it’s ranked in the top 20 fastest growing metros in the United States.

Affordability: An area with mostly high-priced homes, Tampa still has pockets where investors can find homes at affordable prices, even as low as $90,000 and turn around to rent them for $950 a month to $1250 a month.


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Best Real Estate Markets 2017: Jacksonville, Florida

Part 3: Jacksonville, Florida

In the past 10 years, the Jacksonville metro area has grown by a whopping 20%. To date there are 1.3 million people living in this area, and more continue come every year. In fact, Jacksonville’s population has been steadily increasing at a rate of about 2% per year, and their workforce is growing at a consistent rate as well.

There are many reasons for this growth. For starters, Jacksonville is also the only Florida city that is home to four Fortune 500 companies. The region also has a world-class health care system, with more than 20 hospitals and a growing bioscience community. Additionally, 13 of Forbes Global 500 have operations in Jacksonville.

With a cost of living below the national average, a wonderful climate and a business-friendly environment, we believe Jacksonville is one of the best real estate investment markets in the country right now.

Jacksonville Market Statistics

  • Median Sales Price: $154,000
  • Median Monthly Rent: $1,050
  • Median Household Income: $48,143
  • Metro Population: 1.5 M
  • 1-Year Job Growth Rate: 3.0%
  • 5-Year Equity Growth Rate: 38.70%
  • 5-Year Population Growth: 9.60%
  • Unemployment Rate: 4.6%
Jacksonville Real Estate Market Trends & Statistics Infographic 2017-2018
 

Jacksonville Market Quick Facts

  1. The population in Jacksonville has grown 24.1% in population since 2000, which is higher than Miami’s 16.4% and Tampa’s 19.8%.
  2. Future job growth in Jacksonville is predicted to be 39.21% over the next 10 years.
  3. In Jacksonville, the median home price is about $153,400, which is 23% less than the national average.
  4. A typical 3 bedroom home can rent for 25% more than the national average.
  5. The expansion of the Panama Canal is helping to bring jobs into the Jacksonville area ports. This is likely to lead to even more population growth.
  6. The Jacksonville metro also has a world-class health care system, with more than 20 hospitals and a growing bioscience community.

Conclusion: Top 3 Reasons to Invest in Jacksonville in 2018

There are three main reasons that Jacksonville made our list of the best places to invest in property: job growth, population growth and affordability.

Job Growth: Forbes also ranked Jacksonville #3 on their list of best cities in the U.S. for jobs. The region also has a world-class health care system, with more than 20 hospitals and a growing bioscience community.

Population Growth: The population in Jacksonville has grown 24% since the year 2000, and continues to grow by an average 2% annually. Future job growth over the next ten years is predicted to be 39.21%.

Affordability: In Jacksonville, the median home price is about $153,400, which is 23% less than the national average. A typical 3 bedroom home can rent for 25% more than the national average. These factors show us that there’s a strong opportunity for cash flow in the Jacksonville metro.


Best Real Estate Markets 2017: Cape CoralPart 4: Cape Coral, Florida

Known as the “Boaters Paradise” of Florida, Cape Coral is a fantastic area to acquire rental property, for both cash flow today, and a strong chance of appreciation in the future.

What’s interesting about this area is that before now, Cape Coral was primarily a vacation destination. As a result, it was one of the hardest hit cities in the country during the real estate downturn of 2008. Values plummeted.

Our team at Real Wealth Network was concerned about that and the possibility of it happening again in the next downturn. But our research showed that many baby boomers who are retiring today are choosing to live in vacation-like communities for a resort-style retirement.

What were once just vacation homes are now becoming primary residences. Plus, values haven’t come back yet in Cape Coral, so it’s still a very affordable vacation-style destination. With 10,000 baby boomers retiring every day, and not all in a position to buy, it’s no wonder rents in Cape Coral are on the rise.

As a result, Cape Coral rents have increased by more than 26% over the last few years and the baby boomer population continues to be one of the fastest growing rental groups in the nation.

This could be because they are not as intrigued with home ownership after the last crash, or they don’t want to deal with home maintenance, or maybe they just can’t qualify for a loan but want to retire in an affordable resort community.

Cape Coral Market Statistics

  • Median Sales Price: $217,000
  • Median Rental Price Per Month: $1,650
  • Median Household Income: $51,000
  • Metro Population: 722,000
  • 1-Year Job Growth Rate: 2.44%
  • 5-Year Equity Growth Rate: 81%
  • 5-Year Population Growth: 17%
  • Unemployment Rate: 4.8%
Cape Coral Real Estate Market Trends & Statistics 2017-2018
 

Cape Coral Market Quick Facts

  1. Single family home values in Cape Coral have risen 81% over the last 5 years. This is 179% faster than the national average.
  2. Cape Coral was recently named as one of the 10 Real Estate Markets To Watch in 2017, according to Forbes. Their reasons: high job growth (fourth in the nation!) and a sharp drop in vacancy rates. “And then Fort Myers, FL is home to baseball’s Boston Red Sox and Minnesota Twins during spring training every year, which boosts the economy even more every spring,” says Pat Eberle of RASO Realty in Cape Coral, FL.
  3. Many retiring baby boomers are choosing to live in vacation-like communities, and Cape Coral is one of the top communities in the nation for this type of resort-style retirement.
  4. Forbes rated Cape Coral the number one best city in the United States for future job growth in 2017, and in the top 25 for best places to retire in 2015.
  5. Money Magazine ranked Cape Coral as the #1 city for startups in 2015.
  6. In 2016 Forbes Magazine named the City of Cape Coral as # 9 of the “Top 25 Cities To Retire in the United States”

Conclusion: Top 3 Reasons to Invest in Cape Coral in 2018

Job Growth: Money Magazine ranked Cape Coral as the #1 city for startups in 2015 and in 2017Forbes rated it the number one best city in the United States for future job growth.

Population Growth: Forbes ranked Cape Coral as the 10th fastest growing city in the nation. And MarketWatch ranked it as the #2 city in the U.S. where retirees are moving.

Affordability: Home prices in Cape Coral still haven’t bounced back from the Great Recession of 2008, so it’s still more affordable than other coastal cities. Plus, with 10,000 baby boomers retiring every day, not all in a position to buy, it’s no wonder rents in Cape Coral are on the rise too. (Both good signs for investors!)


Best Real Estate Markets 2017: Pittsburgh

Part 5: Pittsburgh, Pennsylvania

With a population of over 2.3 million, the Pittsburgh Metro area is the 22nd largest in the nation. The “Burgh” is known as “The City of Bridges” for its 446 bridges, and “The Steel City” for its former steel manufacturing base.

It’s the home of several large corporations that help to keep its moderate and growing economy stable including PNC Financial Services and Federated Investors. Its economy thrives on healthcare, education, technology, robotics, financial services, glass, and more recently film production (The Dark Knight Rises was recently filmed downtown).

The region is also known for oil and natural gas production and is headquarters to major global financial institutions including PNC Financial Services (the nation’s fifth largest bank), Federated Investors and the regional headquarters of BNY Mellon.

It is ranked as one of the top 12 places to invest by the Pittsburgh Post Gazette. It’s also one of the top 10 housing markets for redevelopment and growth. Plus, according to RentRange rents for single-family homes rose 12.6 percent and the average gross yield was over 15 percent! That’s of course why why we believe Pittsburgh is one of the best places to buy rental homes this year.

Pittsburgh Market Statistics

  • Median Sales Price: $137,000
  • Median Rent Per Month: $1,140
  • Median Household Income: $36,000
  • Metro Population: 2.3 M
  • 1-Year Job Growth Rate: 0.27%
  • 5-Year Equity Growth Rate: 20.20%
  • 5-Year Population Growth: -0.63%
  • Unemployment Rate: 4.70%
Pittsburgh Real Estate Market Trends & Statistics Infographic 2017-2018
 

Pittsburgh Market Quick Facts

  1. The median sale price of 3 bedroom single family homes in Pittsburgh remains low at only $137,000. However, in some neighborhoods it is possible to purchase homes for less than $73,000.
  2. Median rent per month is $1,140 a month or 0.99% of the median purchase price, which provides an opportunity for a sizable and quick return.
  3. The area is also seeing steady rise in home value with over 20% equity growth over the last 5 years.
  4. Pittsburgh has been experiencing steady job growth in the education and health services, leisure and hospitality, professional and business services, and STEM sectors.
  5. Pittsburgh is also home to 15 Fortune 500 companies, the East Coast headquarters for Google, and many other high tech startups.
  6. Business Times ranks Pittsburgh as the #1 top city to relocate to & Zillow ranked it in the top 10 best housing markets in the nation.

Conclusion: Top 3 Reasons to Invest in Pittsburgh in 2018

Job Growth: Pittsburgh has not been creating as many jobs as other U.S. cities, however the metro area is experiencing employment gains in several sectors. For example, between September 2015 and 2016, there were 6,773 jobs created in the education and health services, leisure and hospitality, professional and business services, and STEM sectors. However, 6,447 jobs were lost from goods-producing industries, which created close to the net decline in employment for the metro area. All of this data shows us that demand in Pittsburgh is still rising at a steady rate among some “high-value” demographics, including millennials and people in STEM fields.

Population Growth: Pittsburgh’s overall population has declined since 2010 but the millennial population has grown significantly. In fact, Time recently ranked Pittsburgh in the top 10 U.S. cities where millennials are moving. This is a good sign for investors because millennials often prefer renting to buying (in 2017, homeownership for millennials is less than 13% nationwide), which means the demand for rental homes in Pittsburgh will likely rise in the coming years.

Affordability: The median sale price of 3 bedroom single family homes in Pittsburgh remains low at only $137,000, which is 27% less than the national average of $187,000.


Best Real Estate Markets 2017: Tampa, Florida: Huntsville & Montgomery, Alabama

Part 6: Huntsville & Montgomery, Alabama

The fourth-largest city in Alabama, Huntsville is just a 90-mile drive on the I-65 heading north from Birmingham. Founded in 1811, Huntsville is known for its rich Southern heritage and a legacy of space missions. Huntsville actually earned the nickname “The Rocket City” during the 1960s when the Saturn V rocket was developed at Marshall Space Flight Center, which later made it possible for Neil Armstrong and Buzz Aldrin to walk on the moon.

Today, Huntsville is one of the most well known cities in the Southeast part of the country. USA Today touted Huntsville as “one of the top communities leading the economic recovery,”

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