The multifamily vacancy rate in Detroit remained at its lowest level in five years, according to the fourth quarter multifamily market report from Marcus & Millichap.
Marcus & Millichap reported that multifamily vacancy rates are hovering below 4 percent in all but three submarkets of Detroit. And in buildings completed since 2010? Vacancy rates dropped 110 basis points on a year-over-year basis to 1.8 percent in the third quarter.
Overall, the positive absorption of more than 2,400 apartments in the Detroit market will send vacancy rates to 3.3 percent by the end of the year, Marcus & Millichap predicts. This follows a vacancy rate that decreased by 40 basis points last year.
While vacancies are falling, rents are moving in the opposite direction. Marcus & Millichap reports that the average effective rent for apartments in the Detroit market should hit $978 a month by the end of the year. That’s a year-over-year increase of 4.6 percent.
New apartment units will continue to rise in Detroit, but they might do so at a slower pace. Marcus & Millichap says that developers will complete 1,100 apartments during 2018. That’s down from last year, but still represents a solid pace of new construction. Marcus’ report says that the city’s downtown/Midtown/Rivertown submarkets will see the most new rentals.
