With the burst of the housing bubble, home prices have fallen dramatically and Michigan has been one of the hardest hit markets in the United States. This might just make Michigan one of the best markets to invest in right now.
It’s no secret that the struggling automotive industry has caused widespread job losses throughout Michigan, and as a result, foreclosures have driven Michigan housing prices down more than 60% since 2006. According to Realty Trac, foreclosures account for 33% of Michigan’s home sales through the 2nd quarter of 2010, and this trend is expected to continue through 2011. For real estate investors these foreclosures represent an excellent opportunity to purchase property at a steep discount.
The Michigan economy is not out of the water just yet, but there are some very encouraging signs indicating that things may be turning the corner.
1. Detroit‘s Automakers Are All Producing Profits
It is no secret that Michigan’s economy is heavily tied to the automotive industry. In recent years, the automakers have struggled tremendously, but the restructuring is starting to take hold. In the 2nd quarter of 2010 all three of Detroit’s automakers were in the black posting the following profits:
- Ford – $2.6 Billion
- General Motors $1.3 Billion
- Chrysler – $183 Million
This is welcomed news for the Michigan job market as these profits have already resulted in renewed investments into Michigan’s economy. The Michigan Economic Development Corporation reports that 17 of the world’s leading electric battery companies are investing $5.8 Billion into Michigan. This includes a $43 million investment by General Motors for a new plant that will manufacture the batteries for the Chevy Volt – the automotive industry’s first fully electric vehicle. These investments are expected to create approximately 63,000 jobs.
2. The State of Michigan Has Provided a 42% Tax Credit to Film Makers
In April 2008, the state of Michigan announced a 42% tax credit for film makers that produce films using Michigan workers. This has spurred a flurry of film making activity. Before the incentive, Michigan averaged five film productions annually. In 2008 thirty-one films were produced, and in 2009 thirty-five films were produced. This trend is expected to continue with the announcement of 3 major studios to be built in Pontiac, Detroit, and Grand Rapids. These studios alone are expected to bring 6500 permanent jobs to Michigan.
3. Investment in Renewable Wind Energy
Because of Michigan’s vast coastlines along the great lakes, the wind potential is phenomenal. Michigan has enacted the Renewable Portfolio Standard which requires 10% of the state’s energy demand to come from renewable resources by 2015. This standard is sure to drive investment into renewable energy resources in Michigan.
The Time to Invest in Michigan Is Now
All of this economic activity is sure to result in the appreciation of Michigan’s deflated housing prices. In fact, Yahoo Real Estate is projecting that the Southeast Michigan real estate market will appreciate by 33.1% by 2014!
For investors, the time to invest in Michigan real estate is now. Fortunately, investors do not need to live in Michigan to participate in this market. Companies like Michigan Turnkey Investments are setting up cashflowing turnkey investment properties for out-of-state investors. These properties are solid investments that boast returns from cashflow in the range between 13% – 20% annually. With these kind of returns and the prospect of heavy property appreciation, it’s a no-brainer – the time to invest in Michigan real estate is now.
Source: Todd Brittingham
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Published at Fri, 12 May 2017 21:17:36 +0000