This isn't speech
Keep in mind the context. These are not private items in his private sanctum.
He displayed prejudicial matériel during a house showing.
He gave a tour of his house. For home buyers.
He had no idea who the Realtor was bringing to see his house. He made a point to festoon his home with symbols of white supremacy, placed quite on purpose so they would be seen.
It's not like potential buyer showed up with a pallid complexion, beer belly, mullet and MAGA hat, and the cop sized him up to be a kindred and then unlocked a cedar chest. Not only were the items in plain view, but they were positioned so they could not be quickly hidden if he wanted to conceal them from, say, a black home buyer. He did not, of course!
The purpose of the displays was to repel non-white home buyers
And if you're not familiar with US housing law, that has been illegal since 1968. (Title VIII of the Civil Rights Act):
"It is illegal discrimination to, because of race, color, religion, sex, disability, familial status, or national origin:
Make, print or publish any notice, statement or advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation or discrimination".
The plain, obvious purpose of the displays (or from failing to remove the displays for the showings) was to have them be seen by all home buyers. It would be obvious to non-whites that he would either refuse to accept any offer, or obstruct the lengthy sale process in ways which would be deniably not about race. And in the US, the sale process has lots of places which provide opportunity to do that. He is telling minorities they are not welcome in this house or neighborhood.
I am talking like I can read his mind; that's irrelevant. Whether he thinks that way or not, any reasonable person would infer this from the displays, and that is enough to presume his intent. Anyone should have reasonably known better, him particularly.
By plain view, the preponderance of the evidince in plain view says that he intentionally violated the FHA of 1968 and most likely similar state laws if not the state constitution. And did so not by accident, but with exactly the black of heart which the laws are there to prevent. This is not speech, it is action, and the department is treating it as such.
In particular, there is also a cultural issue, in that race relations with the police are taken very seriously in Michigan. Not least because Detroit has been famous for decades of doing a very good job of it, so there's a high bar in Michigan, and a high commitment not to have a Ferguson there.