Before there was Silicon Valley, Detroit was once considered the hotbed of innovation in the U.S., with the auto industry helping to make the city the wealthiest in the country around the 1950s, by many accounts. However, issues such as auto factories moving out of the Detroit area to other countries and low-cost areas within the U.S. contributed to significant economic pain for the city, leading to Detroit filing for bankruptcy in 2013.
While Detroit has recovered in many ways since then, real estate remains relatively affordable compared to high-cost cities like San Francisco. The median price per square foot for homes sold in Detroit is just $81, according to Redfin.
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Despite San Francisco facing some issues of its own, such as with a recent population decline amidst the fallout from the pandemic. Some tech workers are moving to other cities, and real estate prices remain some of the most expensive in the country. In San Francisco, the median sale price per square foot is a whopping $1,000, per Redfin.
On that basis alone, $1 million buys you over 12,000 square feet in Detroit versus 1,000 square feet in San Francisco.
Small Homes vs. Flexibility
Granted, the median price per square foot doesn’t always hold the same at every price point, but even in the outer edges of San Francisco, $1 million typically won’t even get you 2,000 square feet. Because of the condensed space, you’re often looking at two-bedroom condos at that price point, though there are some small single-family homes for around $1 million in San Francisco.
In comparison, $1 million in Detroit gives you a world of options. For example, on the outer edges of the city, you could buy a full apartment building made up of 18 1-bedroom units. Or you could buy a seven-bedroom mansion in a historic neighborhood within Detroit.
“With a $1 million budget in Detroit, yes, you have a ton of options — and that’s the beauty of it. You could go ultra-central with a modern luxury condo in the heart of downtown, say in Brush Park, or scale up with a beautifully restored multi-family in Woodbridge, or you could even buy a boutique development that is turnkey in an emerging corridor, like the Milwaukee Junction neighborhood,” said Erica Collica, associate broker, Max Broock Realtors — Detroit.
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A Brush Park condo won’t necessarily be massive at a $1 million price point, but your money still goes a lot further than it would in San Francisco. For example, there’s currently a three-story, three-bedroom, five-bath townhouse condo for sale for just under $1 million in Brush Park, coming in at 2,682 square feet, according to a Zillow listing.
In comparison to this ultra-modern, spacious condo, there’s a same-priced option in San Francisco, around the intersection of the desirable Hayes Valley and Duboce Triangle neighborhoods, for a two-bed, two-bath condo that’s 1,300 square feet, and it mixes vintage and modern styles, per a Zillow listing.
Both are arguably great options, and it’s hard to make apples-to-apples comparisons, but it’s clear that $1 million goes a lot further in Detroit than it does in San Francisco.
“The price-per-square-foot difference between cities like San Francisco and Detroit is super dramatic — but not surprising. In Detroit, we’re working with more land, less density and a fundamentally different economic backdrop. San Francisco’s values are driven by extreme demand in a geographically tight market — water on three sides, tech capital pressure and long-standing housing constraints,” explained Collica.
Choosing Between These Cities
If you’re shopping for a home, either to live in or as an investment, your instinct might go in one of two directions.
One route is to choose Detroit, since real estate is so much less expensive there, so for $1 million you might buy a huge house or a multi-family building you could rent out.
However, you might be thinking that prices are lower in Detroit for a reason, and you’d rather put your money into a wealthier city like San Francisco. Even if you can’t buy as large of a home, you might reason that salaries are higher in San Francisco and there are still a lot of innovative companies attracting people to the region, which might support elevated real estate prices.
There’s a good case to make for both sides, so really it depends on what you value.
“In Detroit, you get space, quite literally and creatively. There’s room to grow, to breathe and to build something completely new. Our market is more accessible, but also more layered. You’re not just buying square footage here — you’re investing in potential, vision and momentum,” said Collica.
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This article originally appeared on GOBankingRates.com: What $1 Million Buys You in San Francisco vs. Detroit (The Difference Is Extraordinary)
