Ann Arbor real estate commands a premium driven by the University of Michigan, a world-class research institution that employs tens of thousands and maintains constant rental demand. Median single-family home prices in Ann Arbor typically range from $380,000 to $550,000, with homes near campus and in the Burns Park and Old West Side historic districts reaching $700,000 or more. Most buyers use conventional loans, and the higher price tier pushes some transactions into jumbo loan territory for buyers targeting larger homes in premium neighborhoods.
Student rental market and investment returns
Ann Arbor's rental market is defined by U of M enrollment. Properties within walking distance of central campus command strong per-bedroom rental rates, with houses of 3–5 bedrooms generating rent that can significantly exceed what a comparable single-family would earn elsewhere. Cap rates on student-oriented rentals near the Hill and Central neighborhoods typically run 5–7% at current purchase prices. Turnover is seasonal and management-intensive, but experienced landlords find the gross income per square foot among the highest in Michigan. The price-to-rent ratio in Ann Arbor has moved above 20 citywide, consistent with a market where appreciation has outpaced rent growth.Property taxes in Ann Arbor carry effective rates near 1.5–2% of market value, in line with Washtenaw County norms. Michigan's Principal Résidence Exemption applies to owner-occupants and reduces taxable value. Closing costs for buyers run 2–4% in Michigan, with sellers customarily paying state and county transfer taxes. FHA loans remain usable at lower price points, while buyers above the conforming limit need jumbo financing with a 10–20% down payment. Washtenaw County's median household income keeps it above the threshold for many first-time buyer assistance programs, so most Ann Arbor buyers finance through standard market-rate loan products.
