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Demand for homes in some of the lowest-cost neighborhoods in the country is surging in the red-hot housing market, prompting neighborhood revitalization projects to spread.
U.S. ZIP codes where the median home price is less than $100,000 have posted a 42% jump in home values in the past three years, according to an analysis by CoreLogic and The Wall Street Journal. That’s double the increase in ZIP codes where the median price was between $150,000 and $200,000 and triple the hike in areas with prices $300,000 and up, according to the analysis.
The higher home prices are helping to revive local economies in places like Detroit and Cleveland, where there are pockets of homes that aren’t even eligible for financing, the Journal reports. In Detroit’s cheapest ZIP codes, where the median sales price was $45,500 in early 2018, home prices have surged 113%, according to CoreLogic. The Detroit Land Bank Authority, which manages thousands of vacant properties, sold 1,091 homes in the first three months of the year and decided not to demolish about 300 other homes due to the increase in demand.
Investors and first-time home buyers are helping to lift the bottom end of the housing market, the Journal reports. Still, housing experts warn that rising prices could ultimately keep more potential buyers out of the market.