Buying a house in Detroit is easier now, but not cheaper

Detroit’s real estate market is starting to level off, according to the latest MLS data from Realcomp.

Why it matters: After two-plus years of plummeting inventory and sky-high home prices, Detroit-area buyers have waited a long time for a little relief.

What’s happening: Inventory, inflation and interest rates are driving the market, Jeanette Schneider, president of RE/MAX of Southeastern Michigan, said.

• Inflation makes it harder for folks to save up for a down payment.
• Higher interest rates mean higher monthly mortgage payments, which puts buying out of reach for some.
• Less demand and more inventory leads to lower home prices.

By the numbers:

• Inventory of homes for sale in Detroit was up 25.5% in August.
• Closed sales are down 17.2% compared with this time last year.
• And while median home prices are up 13.3% year over year, they have fallen in recent months.
• For example, in June, the median sales price was $100,250 and in August it was $85,000.
• 30.3% of Detroit listings had price drops in August, up 12.4 points from last year.
• 23.7% of homes sold for over asking price, a 5.3-point decrease from last year.

Zoom out: What we're seeing now is in line with 2019 and the pre-pandemic market, Karen Kage, chief executive of Realcomp, said.

• She's been in real estate for 43 years and says conditions in 2020/2021 were highly unusual.
• Looking at a five-year period, however, Detroit's home values have appreciated healthfully.

What it means: Even though Detroit isn't seeing the inventory rebound quite like other parts of the country, local buyers still have more options than early 2022 and 2021, Schneider said.

• A less-frenzied market means buyers can take their time touring, offer closer to asking price and get an inspection.

What they're watching: Mortgage rates. How those change, or not, over the next several months will have a big impact on the market.