Ed Welburn, chief designer for General Motors, was in the company archives years ago when he spotted something familiar in a framed 1930s Cadillac ad hanging on the wall: a row of white stones along the roadside grass, similar to the ones outside his house.
Motown Classics for a Song
As he dug deeper, looking through more vintage luxury-car ads—many set against backdrops of Tudor-style mansions with grand front lawns—he soon realized he was looking at pictures of his own neighborhood, Palmer Woods.
"Some of the homes haven't changed at all," says Mr. Welburn, who has lived in the historic Detroit enclave for about 30 years. Among the images in the archive, Mr. Welburn recently discovered one of his own house, a 1927 Georgian colonial, with a gleaming 1930 LaSalle parked out front.
Situated near the northern edge of the city, about 8 miles from downtown, Palmer Woods is where Detroit's tight street grid relaxes into winding avenues lined by stately 5,000-square-foot Tudors, mixed in with unique houses designed by the likes of Frank Lloyd Wright, Minoru Yamasaki and Albert Kahn. First developed during the 1910s, it has long been home to Detroit's political, industrial and cultural elite, from the Romneys to the Fishers to the former heads of GM and Chrysler.
Today, the neighborhood remains a haven for leaders in business and the arts, as well as doctors, lawyers and university professors. More recently, it has managed to attract some newcomers from the suburbs, a significant achievement in a city that has lost more than half its population in the last 50 years. One of the newest immigrants to Palmer Woods is Mike Duggan, a former county prosecutor who recently stepped down as head of the Detroit Medical Center to prepare a bid for mayor of Detroit.
Palmer Woods homes are a window into the wealth and artistic expression that flowed from Detroit's breakneck expansion in the early 20th century and earned the city the nickname "Paris of the Midwest." They feature elevators and grand ballrooms, large mahogany-paneled music rooms and marble crafted by artisans brought in from Italy. There are libraries with moving walls (Prohibition-era wet bars concealed behind them) and colorful tile work by celebrated potters, including Detroit's own Pewabic Pottery. One home has a pub fitted into its basement, its pieces dismantled and shipped over from England.
Yet today, because of the deterioration in the city's economic fortunes—not to mention the houses themselves—even some of the most distinctive Palmer Woods homes are priced as garden-variety colonials would be in other cities.
One property now on the market is a 10,000-square-foot mansion built in 1922 by Charles Van Dusen, then president of S.S. Kresge Co., precursor to Kmart Corp. The house has seven bedrooms, nine bathrooms, a walnut-paneled entrance hall, carved marble fireplace, walk-in vaults and a ballroom on the third floor. It's listed at just under $700,000.
"These are wonderful houses for the cost," says Graham Beal, director of the renowned Detroit Institute of Arts, who moved to Palmer Woods 13 years ago and lives in 6,000-square-foot replica of an English Cotswold manor house.
Recently, Mr. Beal was working with an insurance agent to update his homeowner's policy. "The insurance agent was scratching his head" trying to come up with a replacement value, Mr. Beal explained, because much of the house's craftsmanship couldn't be reproduced today. Ultimately, the agent pegged the replacement value at about twice the market value.
Palmer Woods itself has changed little over the years, residents say, even as the city around it has suffered. A strong neighborhood association, whose activities include home tours and staging jazz and classical concerts in residents' homes, has helped stave off the blight that has crept into other prime areas. The neighborhood is listed on the National Register of Historic Places.
The area has seen its share of foreclosures and vacancies in recent years, though. The Romney family's old 5,500-square-foot house on Balmoral Drive, where Mitt Romney lived as a boy, fell into foreclosure several times, bouncing between lenders and becoming a neighborhood eyesore. Under orders from Wayne County, it was demolished in 2010.
Stephen Williams, a real-estate agent who lived in Palmer Woods for 19 years, says the neighborhood is rebounding, thanks in part to interest from young professionals and empty-nesters and a drop in property-tax rates several years ago when the area became an urban enterprise zone. Right now, he has five clients searching for homes in the area but inventory is tight. "If I could find them a house, they'd buy right now," he says.
Geographically, the neighborhood is largely buffered from the rest of the city, with a cemetery on the north side, a large park to the south and few entry points from the major streets surrounding it.
Inside the community, the mansions sit on flat, open lots, without gates or fencing in between. Palmer Woods' planner, landscape architect Ossian Cole Simonds, designed it with curving streets, irregular lots, expansive lawns and no raised curbs—just the white stones dotting the roadside—making it feel more like a park than a rigid subdivision.
"It's not on a grid. It's fluid," says John Sayah, an IT management consultant who moved from Washington, D.C., to a Mediterranean-style Palmer Woods villa with a glass-enclosed conservatory, after his wife got a job in the Detroit area last year. "The streets go back and forth, and people just keep running into each other."
Home styles vary widely, from castle-like Tudors with brick or stone exteriors to stucco-clad French-style châteaus to angular modern houses with horizontal lines and floor-to-ceiling windows.
The first houses came up in the 1910s, as Detroit was on its way to becoming one of the world's wealthiest cities. William and Alfred Fisher, of Fisher Body Co., an auto-body builder founded in 1908, built some of Palmer Woods' grandest homes, including one totaling over 22,000 square feet, with an indoor pool, eight-car garage, extensive gardens in the back and a wrought-iron conservatory.
In the 1920s, the brothers, seeking more room for the gardens, bought two adjacent lots and had the houses on them moved about a block away.
A second wave of building, after World War II, helped bring more modern homes, including one designed by Mr. Yamasaki, architect of New York's original World Trade Center towers.
To the south, along West Seven Mile Road, is Frank Lloyd Wright's Turkel-Benbow house, commissioned in 1955 by parking-lot heiress Dorothy S. Turkel, and later owned by Domino's Pizza founder Tom Monaghan, The boxy building, part of Mr. Wright's Usonian Automatic series of precast-concrete homes, was purchased in 2006 out of foreclosure by Norman Silk and Dale Morgan, co-owners of a local floral business.
The neighborhood's architectural anchor is the 40,000-square-foot Bishop Gallagher house, the largest residence within city limits. Built by the Fishers, it was donated to the Catholic Church and housed leaders of the diocese until the church sold it in 1995 to former Detroit Piston John "Spider" Salley. It's now owned by Great Faith Ministries, a religious group with churches in Detroit and Atlanta.
Other notable residents of the area have included William Knudsen, president of GM in the late 1930s, and K.T. Keller, Chrysler's president in the 1930s and '40s, as well as former Detroit Mayor Dennis Archer.
Prices in Palmer Woods reflect a Metro Detroit housing market that's just now recovering from a free fall during the housing and auto industry crises. In the third quarter of 2012, the median sale price of a home in Metro Detroit was $75,700, up 13.8% from a year earlier, according to the National Association of Realtors; the nationwide mean, by comparison, was $186,100, up 7.6%.
For many, Palmer Woods still is a tough sell. Its aging homes and their exotic features typically require a lot of upkeep and costly repairs. Detroit's fiscal woes have diminished municipal services. Palmer Woods residents pay about $495 a year to their homeowners association to fund private security, landscaping of some public areas and snow removal.
Others see in Palmer Woods' bargain prices an opportunity for ordinary people to live like titans of industry. "You can't buy a house like this for less than $1 million in the 'burbs," says Scott Moorhead, a specialty-chemical salesman, who moved from the suburb of Royal Oak into a nearly 4,000-square-foot Tudor revival in August. "They don't build houses like this anymore."
Corrections & Amplifications
Real-estate agent Stephen Williams lived in Detroit's Palmer Woods neighborhood from 1991 to 2010. An earlier version of this article said he still lives there.