Metro Detroit's new homes still cost more than old ones
Add Axios as your preferred source to
see more of our stories on Google.
New homes in Metro Detroit cost more than old ones, contrary to major markets across the country where new homes actually cost less, recent data shows.
Why it matters: Brand-new houses are still pricier here because they are in short supply and because home prices are generally lower in Metro Detroit than in other parts of the country.
- "Historically, the price point has been extremely low for older homes in Detroit compared to anywhere else in the nation," Ishma Best, sales director for local developer Century Partners and Prep Realty managing broker, tells Axios Detroit.
State of play: With elevated interest rates hammering housing affordability, many builders are shrinking homes to cut costs or offering incentives, including lower rates on mortgages.
- Home shoppers are seeing such discounts in 21 major U.S. metros, led by San Diego, Salt Lake City and Los Angeles, according to a recent Zillow report.
By the numbers: New U.S. homes are selling for $3.50 less per square foot than old ones, the widest gap in at least six years, per the report.
- In Metro Detroit, new homes cost $51 more per square foot than existing ones.
Zoom in: Detroit issued 18 permits for new house construction last year.
- Developer Greatwater Homes, however, recently completed three homes in East Village and plans to build about 20 more in the area. Greatwater's homes are priced at $339,000, $439,000 and $459,000, advertising amenities including garages and air conditioning.
The big picture: People typically pay a premium for brand-new houses, but in this brutal home market, some are finding deals among new construction.
The bottom line: "Not only are cash-strapped buyers continually seeking out lower-cost options, but developers are changing what type and size of home they're producing to try and meet that need," Zillow senior economist Orphe Divounguy tells Axios.