Want to Know Where to Buy Real Estate in Detroit?

As in the past, the future of real estate may be tied to rail projects.

MORTGAGE, EXPERT, MICHIGAN, BIRMINGHAM, BLOOMFIELD, DETROIT, ROCHESTER, ROYAL OAK, TROY

Looking for a potential bright spot in the city of Detroit?

There are plans afoot to break ground on a $420 million rail project along Woodward Avenue by the end of 2010. 

The project is called the M-1 Rail Project and is a sorely needed bright spot for the city.

The project's $125 million first phase is being funded by a "who's who" of Detroit area businessmen - Peter Karmanos of Compuware, Dan Gilbert of Quicken Loans, Mike Ilitch of the Red Wings and Tigers, and Roger Penske.  The Kresge Foundation has also contributed $35 million.

The 3.4 mile first phase they plan to fund will run from Jefferson to the New Center area.  It will service Detroit's downtown entertainment district, Comerica Park, Ford Field, Wayne State University, the Detroit Science Center, the Detroit Medical Center and more.

Now here's the really good news - despite Detroit's tradition of shooting "gift horses" on arrival, this project survived a recent political skirmish that delayed it by one year.  Detroit's Department Of Transportation (DOT) got involved as they had their own plans. 

Clear heads somehow prevailed though and the private money was actually leveraged to get approval from Congress to fund the remaining $295 million needed for Phase II of the project. 

Phase II is planned to run the rail all the way to 8 Mile Road, connecting Detroit with the suburbs. 

Would have been nice if someone had planned the recent renovation of the Woodward - 8 Mile overpass with the rail project in mind.  There was a lot of discussion about removing the overpass and restoring the intersection to a normal setup.  Can't have everything I guess.

Why is This Important to Real Estate Investors?

The history of real estate in the U.S. is tied to rail and transportation development.  Towns across the country sprang up near water transportation and later railways. 

There's a high probability that the real estate along the M-1 Rail Project will become some of Detroit's most sought after real estate. 

Looking at other cities that have invested in significant rail transportation, most have prospered.  Chicago, Detroit's most similar "sister city" has a more vibrant downtown than Detroit because of its transportation options.  People actually want to live in downtown Chicago and it's a common occurrence, actually pretty normal. 

People that want to live in downtown Detroit are considered adventurous or trendsetters.  How many of Detroit's college graduates have moved to Chicago and other cities with better transportation options?

Commercial real estate along the M-1 line will benefit from free advertising as riders see there businesses daily as they pass by.  Coffee shops, convenience stores and newsstands will prosper near the rail stops. 

Office buildings and retail within walking distance will prosper due to riders spending extra time shopping as they wait for the next train. 

Residential real estate within walking distance of stations will also see increased demand and as result rising prices.  People will want to live near accessible transportation and will pay more for the convenience.  The money they'd normally put monthly towards gas for their cars, they'll be willing to spend on housing.  If they can get rid of their car expenses altogether, think how much more they'll have to spend on real estate!

Now, before everyone runs out and starts bidding up real estate along the proposed rail line, understand that if you do so, you'll be speculating.  The line has not been built yet and it'll take some time for people to embrace it when it is complete. 

Who knows how long that will take, although there are already rumors about secretive agents making offers on commercial real estate along Woodward for unidentified investors.

Some more good news to think about - a joint project between the cities of Birmingham and Troy, the Troy Transit Center, recently got full funding approved.  Plans have already been set to start construction of a modern station along the Amtrak rail line running behind the retail development at the southwest corner of Maple & Coolidge.  Plans are to connect the Transit Center with bus lines running into downtown Birmingham and up & down Woodward, Maple Road and Big Beaver.

What will that do for real estate in those areas?