Apartment vacancy rates are falling throughout the Midwest, with rates especially low in Detroit and Minneapolis, according to the latest research from CBRE. And overall, Midwest markets added more than 30,000 new apartment units to their stock in 2017.
That’s the good news from CBRE’s Midwest U.S. Multifamily 2017 Year-End report.
The company reported that Detroit’s apartment vacancy rate stood at 3.6 percent as of early March. That’s higher only than Minneapolis, which had a multifamily vacancy rate of 3 percent.
Overall, Detroit’s apartment market has seen vacancies fall 483 basis points since 2009, the most in the Midwest. Rents have been rising here, too. From 2015 through 2017, Detroit recorded a 6 percent increase in asking rent per unit. Detroit saw the third-highest rent growth in the Midwest during this time, behind only Indianapolis, where apartment rents grow 6.5 percent, and Columbus, where they rose 7.1 percent.
“We have seen a strong interest in the rental market in recent years, especially in downtown Detroit, where we have seen a revival in the office sector,” said Jack Johns, first vice president with CBRE, in a written statement.
Johns said that workers want to be clsoer to their offices as more jobs move into the downtown areas of the city. This is inspiring more employees to relocate downtown for housing options. Johns said that increased demand for rentals means that developers should bring more units coming online in the market in 2018 and 2019.
Overall, markets in the Midwest combined to deliver 32,845 apartment units last year. That broke the previous record of 29,739 units delivered in 1999. Detroit added 1,832 new apartment units in 2017.
