A new housing and retail development on Detroit's riverbank could encourage future homebuyers to get off the sidelines and into the homeownership game, as the units are geared toward young professionals. The $60 million project, which the developer hopes will be finished by early 2016, will include three- and four-story town houses, apartment buildings and mixed retail, according to The Detroit Free Press.
"We think that there's pent-up demand for the housing product with the workforce downtown and others," Richard Baron, a Detroit native and executive of developer McCormack Baron Salazar, told the newspaper. "I've always wanted to come back to Detroit and help with the redevelopment of the city."
Future homebuyers may want to familiarize themselves with Michigan's escrow processes, as some steps can vary from other states. First off, few, if any lending institutions, in the state pay interest on the money in an escrow account.
The money in an account is there so the escrow company can pay a homeowner's property taxes and hazard insurance, so many feel that they are entitled to the money the lender earns by paying these fees. However, that is not the case in Michigan, but there is another option. According to the state, one method - sometimes called escrow capitalization - is when a portion of a borrower's monthly payment required to pay taxes and insurance is deducted from the balance owed on the mortgage. When the fees have been paid, the amount is added back into the balance, which in turn reduces the amount of interest the borrower pays.
Downtown Detroit on the rise
The as-yet-unnamed development on the Detroit River is one of many attracting not only homebuyers to the area, but tourists and area families. Downtown's Globe Building is undergoing a $12.5 million rehabilitation funded by the Department of Natural Resources. When it is finished, it will be an adventure center with educational opportunities, as well as a climbing wall and other attractions, The Free Press reported.
Despite the city's recent bankruptcy filing, some experts say that the move will help the city rebound quicker than it would have otherwise. Other residential projects include the 124-unit Broderick Tower and the 58-unit Auburn in the Midtown neighborhood.
"These are practical real-estate deals that we know there'll be a lot of market acceptance for," said Sue Mosey, president of the nonprofit organization Midtown Detroit Inc.