2:46 pm ET
February 23, 2016February 23, 2016
Sorry, home buyers. And congrats, home sellers. Home prices are continuing their inexorable, upward climb. And one unlikely, long-downtrodden city is even being pulled into price-increase frenzy.
Yes, friends, Detroit is officially a hot housing market. Honest.
Overall, the cost of buying a new abode was up 5.4% in December over the previous year, according to the most recent data from the SP/Case-Shiller Home Price Indices. Prices were also up 0.1% from November.
“Prices are going up, and it’s being aided by low mortgage rates, tighter supplies [of properties on the market] and lower unemployment,” says Chris Bennett, a senior index analyst at SP Dow Jones Indices.
The market got even tighter for buyers in Portland, OR, San Francisco and Denver. These cities posted the largest year-over-year cost hikes in December.
Portland housing prices shot up 11.4% in December 2015 compared with December 2014, and jumped 10.3% in San Francisco, according to the report. Denver wasn’t far behind, with a 10.2% increase.
“We have a lifestyle that people like,” says Dawn Barry-Griffin, a Portland real estate agent at Portlandia Properties.“People are very accepting and laid back. You have nature close by.”
In the last year, she’s begun seeing an influx of folks who are being priced out of the more ridiculously expensive parts of the country, such as the San Francisco Bay Area, and relocating to Portland. This has put a squeeze on the housing market, driving prices up, up and away.
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But the big surprise on the report was Detroit. The Motor City, which has suffered high unemployment in recent decades, as its manufacturing plants closed, saw a 7.1% bump in housing prices from a year earlier.
That’s due in part to the small but growing number of new companies starting, moving to or expanding in Detroit—bringing new jobs with them, says Charles Ryan, a Detroit real estate broker at Keller Williams Realty in Royal Oak, MI. Many of those folks are looking to buy in the city’s historic districts, which have a limited supply of homes on the market. Thus, housing prices are driven up.
“I’m seeing a lot of first-time buyers, and then people who have once lived in the city see that it’s getting better and are coming back,” Ryan says.