Hello BP! I am currently in the market for my first property and live in the Metro Detroit area.
I have found a few SFH's in Royal Oak that have caught my attention, as I feel they are being sold under market value based on comps I have received. They are also in higher rent areas, and very close to downtown - long story short, I feel confident about these properties renting easily and cash flowing well.
My question is: how do you feel about the Royal Oak market in general? Clearly it has become known as a growing city that is attracting a young, college-grad crowd - but do you think it has peaked? Looking at historical sales data, the average home sale price has risen dramatically since 2010, which leaves me thinking it may soon plateau and decline. But, if you drive around the city, especially downtown, new construction is happening all over, indicating that the city may just be in the beginning of a rise.
What are you thoughts? Let me know!
Hey! I like the Royal Oak area for investing if you buy right. Many of the homes are overpriced in the area and homeowners are moving to surrounding areas like Ferndale. I would check on how much your property taxes are because they may increase if they have not already. You will always have someone wanting to live in the area so its a high rent area and you will have someone always ready to move in. If it cash flows, you buy right which I think is most important for Royal Oak I say it is a market that is trending upwards. Cannot predict the future but I do see it slowing down (plateau) but not losing value just a slow progression.
@Brandon Jurczyszyn - The average house price is rising thanks to an increase in new residential development. Primarily the kind that involves blowing out old $150k 1000 sq ft houses and replacing them with mammoth $500k houses over double the size. Assuming this continues to happen, we should see the values of all our homes in RO continue to uptick. My house alone has gone up 15-20% in value in 1.5 years.
I would also recommend taking a look at how well the homes held up in value during the recession. Although everyone took a hit, many homes in RO kept values relatively close to where they were at pre-recession. Perhaps the appreciation starts to sputter - based on what I've seen over time, I have less concern about the bottom dropping out on values in my city.