A typical home in the Detroit-Warren-Dearborn metro area costs $151,000, roughly the same as in Michigan as a whole, where the typical home is worth $137,500. Detroit’s median home value is also the third highest of any metro area in the state.
The price of a typical Detroit home is, however, less than the national median home value of $194,500.
Residents of areas with less expensive real estate also tend to have relatively low incomes. In Detroit, however, the typical household earns $53,628 annually, higher than the $51,084 median household income statewide and similar to the $55,775 national figure. Detroit has the fifth highest median household income of any Michigan metro area.
Home values tend to be higher in dense, urban areas, where space is limited and land is more expensive as a result. In the Detroit-Warren-Dearborn metro area, however, there are 1,105 people per square mile, far greater than the average urban population density of 283 Americans per square mile across all metro areas nationwide. Detroit has the highest population density of any Michigan metro area.
Home values in the metro area may also be hurt by the condition of the local job market. People often relocate for occupational reasons, and an area with higher unemployment is more likely to have less expensive real estate. The Detroit-Warren-Dearborn metro area’s unemployment rate, however, was 4.9% as of August 2016, roughly the same as the 4.9% jobless rate nationwide.
Improved unemployment among the Detroit-Warren-Dearborn workforce over the last five years — like most of the country — may have helped increase home values as a result. Since August 2011, the Detroit unemployment rate has fallen by 6.5 percentage points. Over the same period, home values in the metro area increased by 27.7%. Nationwide, the unemployment rate improved by 4.1 percentage points as the median home value increased by 12.0%.
Areas with low home values are often fairly well-educated. In addition to the lower-paying jobs that educated residents often hold, the lack of good schools and universities are likely to decrease demand for nearby homes. In Detroit, 29.5% of adults have at least a bachelor’s degree, a share roughly equivalent to the 30.6% of Americans with similar education nationwide.