Home Owners Insurance in and around Detroit.

[Josh Walker]

I am in Oklahoma looking at properties in and around Detroit. Does anyone have some baseline home owners insurance numbers that I could use for my evaluations? Any help is greatly appreciated. Thanks!

[Antonio DeFlorio]

Some background...

I lived 20ish miles north of Detroit until I was 32. Left 2 years ago for work, and am moving back to the northern part of state next month. Dad retired with 35ish years at GM, father-in-law still works for Ford. Big 3 is an intricate part of the history. When the recession hit, Michigan, hardest Detroit, was already hurting. The recession hit much sooner than the rest of the country. The Big 3 and others hit financial crisis and were retracting there footprint in the city. This killed the middle class. Most everyone in a 30 mile radius worked for the Big 3 or a top tier supplier (Continental, Uniroyal, Borg Warner, Webasto, Lear, etc). Poverty and crime was high, people who could afford it left Detroit. Auto was the driving industry that supported Detroit. 

Over the last several years casinos have went up, Ford Field (Lions) and Comerica Park (Tigers) were erected and people who loved the city began brainstorming how to revive it.

More recently, Little Ceaser's Arena (new home of Pistons and Red Wings) construction started and is due to open Sept this year. A riverfront project is underway to develop the city along the water. Two big names investing in Detroit area of time city icon Mike Ilitch (owns Little Ceaser's and the Red Wings among other things) and Dan Gilbert (Quicken Loans). Ilitch passed away this year, but his son seems to be running the empire and is focused on Detroit. Google those names and you will get some background on them. 

Everyone is hoping for a Detroit turnaround, especially with the big money investors. It seems to be attracting buy and holds in hopes there is a turnaround to capitalize on. At a tax sale in fall 2014, one conglomerate bought over 6,000 properties as a "blight bundle". 

I personally worked all around the cities right outside Detroit; Warren, Roseville, bad side of Southfield, bad side of Sterling Heights, etc.  My employer had no locations actually in Detroit, but hundreds of my employees came from there. These areas were economically hurt as well. My concern is the investment in Detroit would need to create high paying jobs in the city and those earners to live in the city for change to come at a granular level and be sustained. The attractions in Detroit (casinos, stadiums, Fox Theater, Bell Isle, etc) pull the middle class from the suburbs for a few hours, but they go back to suburbia afterwards because they will never live/raise a family near downtown. But these are the people that will buy houses or be long time renters. 

There are nice areas around Detroit; Macomb, parts of Sterling Heights, Farmington Hills, Birmingham, Royal Oak, West Bloomfield, and plenty more I just can't think of right now. These areas are more stable, but you would have to put effort into finding below market deals. Not the $5000 houses you read about online. 

Another area similiar to Detroit in as the auto industry sustained it and then left is Pontiac. GM had several factories there that closed. A friend has been doing rentals in Pontiac for years. Picks them up for 10-20k, rehab enough to rent. Class D neighborhoods, but it works for him. He use to live there, but hated it. Moved to a Florida, but still invests in Pontiac with local partners. 

Hope this helps. Let me know if you have any questions.