Demand for new homes has teardowns on the rise in Detroit suburbs

“Teardowns have always been a hot commodity,” said Paul Mooney, the owner of PRM Custom Builders. “The demand’s going to stay pretty strong.”

Mooney said it’s increasingly difficult to find people who are willing to sell because with current market values, longtime owners need to find a new place to live — and in addition to higher costs, their taxes would go up considerably in a new home. Indeed, the number of Birmingham demolitions has been falling in recent years, from 120 in 2018 to 59 in 2021. Through the beginning of May, there were 35.

Still, he said, there are “plenty of older homes in Birmingham and these hot markets” that will continue to turn over.

Christina Gennari, who runs the Christina Gennari real estate group at Keller Williams Domain in Birmingham, said a lot of the homes she sells to be torn down are functionally obsolete. They have one or two bedrooms over a crawlspace or a Michigan basement, were built in the early 1900s and aren’t well laid-out for modern needs. While many could be renovated, she said for the cost, it “doesn’t make sense when you could have something brand new.”

When the trend first started in the city, Gennari said, there was resistance from sellers who didn’t want to see their family home destroyed. But now, she said, sellers often have less sentimentality. They’ve seen it happen elsewhere on their street. They understand the neighborhood will continue to change.

Dan Lynch, with Lynch Custom Homes, said he didn’t used to tell sellers that he planned to demolish their house if they sold to him. But he’s since changed tack.

“We’re straightforward with it,” he said. “I thought there was going to be more emotional attachment to houses. They’re not sensitive to it anymore.”

Lynch said he’s paid as much as $750,000 for a house he planned to tear down; in that instance, he was able to split the lot and build two homes. He often buys to build spec homes, but he said most don’t sit for long before they have an interested buyer.

Indeed, David Schmerin, the owner of Bingham Development, said he’s often contacted by prospective buyers while the build is still in progress. He has three properties in the works in Birmingham right now, and said it’s “more than normal” that he’ll demolish the existing home, start to build, and have a buyer before he’s gotten very far. Schmerin said about a third of the work he does involves teardowns.