Recent news coming out of Metro Detroit bodes well for 2014:
Most importantly, the area’s urban hub, Detroit City is likely to be granted bankruptcy at a hearing that concludes on 3rd December 2013. This will mean freedom from crippling long-term debt repayments and could open up an exciting period of growth for the city. A thriving urban hub will offer a considerable economic boost to RTI ‘s target markets in the Metro region.
Signs of a turnaround are already apparent, as Goldman Sachs and Warren Buffett recently launched their initiative to fund 10,000 start-up companies in Detroit last week. Buffet added to the optimism, declaring that ‘Detroit is a great city’ with a ‘huge industry (auto) that’s come back in a big, big way’. Click here to view the video.
This came as CNBC placed Detroit city as the top turnaround city in the US
for housing in 2013. View CNBC’s Diana Olick giving the reasons for this.
US housing continues double-digit price surge:
Recent data to come out of the US housing market shows the continuation of double digit annual house price increases. Average price gains were 13.3% from September 2012 to September 2013– the largest year-on-year increase since February 2006.
This is despite a rise in mortgage borrowing costs from the record lows of the summer months. The fact that house prices continue to rise even as mortgage borrowing costs increase suggests underlying strength in the market, with buyers less dependent on credit. This is backed-up by a 39% drop in completed foreclosures over the past year, showing the improving quality of inventory.
Other indicators also point to the strengthening of the US economy in 2014: US consumer confidence is as high as it has been since early October, while the Christmas period also usually sees markets rise into the New Year (the so-called Santa Claus rally). Particularly encouraging for investors in Michigan is data showing that factory activity is at a 2-1/2 year high in the US. Michigan is the US’s undisputed centre for manufacturing and any national uplift will be further magnified in the Metro Detroit area:
Set against this background, we believe the coming months provide property investors in
Michigan with good reason to be optimistic.