Metro Detroit real estate Growth
I’m going to give you a little explanation about how Detroit and it’s suburbs developed. Like all major cities Detroit started the suburban sprawl in the 1940 and 1950s. Basically you can map out the growth of Detroit as it grows out further and further as the years progress. Many cities like Livonia, Farmington Hills grew in the 1960’s. Then many cities like Northville Twp, Plymouth Twp, Novi, and Canton Township really took off after the 1980’s.
But what happened is that land got more and more expensive in the 1990’s. The cost of building skyrocketed. Everybody from the individual contractor, to the developer, to the suppliers were making a very good living. Even cities were doing well connecting the sewers, and with inspection fees. It was not unusual for some contractors to be making 6 figures. Builders and developers lived in multi million dollar homes. Everybody in the building process were getting a good piece of the pie. Contractors that once made $50 -60,000 were making excellent money, sometimes over a $100,000. What the effect of that was is that as time went on… New homes increased dramatically in cost. The cost per square foot rose dramatically too.
So as you get further away from the City of Detroit, new home prices went higher and higher. Again the newest houses cost the most, and as you worked back in towards the city of Detroit homes got cheaper. It actually became economically unfeasible to build ranch homes or small homes because of land and building costs. It made more sense for many builders to build the 3000, the 4000, the 5000 square foot homes. Some of these homes were going anywhere from $175 – $400 a square foot.
In many cities like Northville, Novi, Canton, you can chart the higher price houses out closest to Beck Rd and start getting less expensive, and smaller as you move in toward Haggerty Rd/ I-275. One benefit of the Metro Detroit real estate contraction is that many homes that were over $500,000 now are in the $300,000 range. Some new homeowners put over $700,000 into the homes by the time they figured in landscaping, window treatments, and upgrades. Those new Metro Detroit homes inNorthville are now selling in the $500,000 range. New homes that are now coming down closer to $100 a square foot versus the $150 to $185 to over $200 a square foot they were getting.
So if you are looking for a newer home in Western Wayne County you will find most of them west of I-275. Some buyers may not find a small (in square footage) new home in the upscale cities. You may either have to decide to go to a different city like Brownstown Twp, Van Buren Twp, or Taylor to find a small new home. Simply because land costs were cheaper there.
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