The multifamily market set a record in the Midwest, adding a never-before-seen number of new units throughout the region, according to the latest research from CBRE.
CBRE reported that a total of 32,845 new apartment units were delivered throughout the Midwest in 2017. That beatsthe old record of 29,739 units in 1999, by quite a bit.
According to CBRE, much of the credit for this wave of new apartments goes to three Midwest cities. Chicago led the region with 7,423 new apartment units in 2017, while Minneapolis came in second with 5,829 units. Columbus rounded out the top three with 4,311 new units.
That’s not the only good news for the multifamily market here. CBRE reported, too, that vacancy rates in this sector have continued to fall. In Detroit, for instance, the apartment vacancy rate has fallen 483 basis points since 2009, the largest decline in the Midwest. Minneapolis had the lowest overall multifamily vacacncy rate in the Midwest, 3 percent.
“Since the recession, housing choices have changed and shifted toward rentals. While other markets have delivered enough product to meet the change in demand, the Midwest has lagged in that regard resulting in lower vacancy rates,” said Abe Appert, executive vice president with CBRE, in a written statement. “This is the case in Minneapolis where the lack of supply and dynamic economic environment have contributed to historically low vacancy rates as the market quickly absorbs additional units.”
CBRE studied 10 Midwest markets in its report, and found positive rent growth between 2015 and 2017 in all of them. Columbus saw the biggest gain in rents, 7.1 percent. Indianapolis came in second, its apartment rents increasing by 6.5 percent. Detroit saw rent growth of 5 percent.