Last year, Kirsten Iverson and her husband, Marcus, bought a new riverfront home on the east side of Detroit, an area once obscured by junkyards and abandoned industrial buildings.

Their 5,050-square-foot home in the gated Morgan Waterfront development has water views, five-bedroom suites, two garages, and a marble foyer with 18-foot ceilings. The couple paid $580,000—easily half or one-third of what a comparable unit would cost in many other U.S. metropolitan areas.

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