While residential and commercial real estate in Detroit continues to represent something of a challenge even to the most intrepid investor, a panel of experts from the University of Michigan’s Ross School of Business believe that opportunities are emerging – particularly in the commercial market[1]. The panel agreed that values and prices remain at “crisis level,” but noted that the low, low prices are finally attracting buyers to the area. Austin Black II, the president of City Living Detroit, noted that 2010 had been the best year for sales in the city since he started selling real estate in the area in 2004. Black believes that the city’s unique architecture appeals to commercial and residential buyers who want elements in their buildings that “cannot be replicated,” and that the people who are buying now, unlike those buying in the past few years, are buying with plans to stay rather than the intentions of moving on as soon as they can turn a profit on their purchase.

Of course, there are still some major barriers – including the lack of services and high cost of living – discouraging serious population growth and commercial development. The panel believes that middle class buyers are the key to resolving real estate issues in the region, and that those buyers – and the businesses that follow them – will only return when services and retail return as well. Another member of the panel emphasized that for commercial investors and developers to succeed in getting financing in Detroit, they will have to “make the numbers work even under the worst scenarios.” In order to get past the crisis stage, he added, “We have to figure out how to generate market rate opportunities.”

Do you think that Detroit is ready for your investment money?

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[1] http://www.freep.com/apps/pbcs.dll/article?AID=/20110121/BUSINESS06/110121038/1318/Experts-say-real-estate-options-in-Detroit-are-appealing&template=fullarticle