Updated 2026 · Based on median market data for Ann Arbor, MI
Home values in Ann Arbor, MI have appreciated at 3% per year. Appreciation is modest, meaning total returns will be driven primarily by cash flow rather than equity gains. This is actually preferred by many investors who want predictable, income-based returns.
If Ann Arbor continues appreciating at 3% annually, the current median of $395,000 would reach approximately $457,913 in 5 years — an equity gain of $62,913 on a property purchased at the median. With a 20% down payment of $79,000, that represents a 80% return on invested equity from appreciation alone. Combined with 5 years of NOI totaling approximately $51,536, the projected total return is $114,449 — a 145% cumulative return on the initial investment.
Ann Arbor's population growth of 0.8% is moderate and positive, supporting steady but not explosive demand for housing. Markets with this growth profile tend to appreciate consistently without the boom-bust cycles of hyper-growth metros. Higher-than-average local incomes ($68,200) support continued price growth as more residents can afford to bid up properties.
Smart investors evaluate both cash flow AND appreciation. In Ann Arbor, the 2.61% cap rate provides modest ongoing cash flow, while 3% annual appreciation adds an equity component. Conservative underwriting is essential. Focus on deals where the cash flow stands on its own, and treat any appreciation as a bonus.