Detroit isn’t unlike most Midwest cities when it comes to its multifamily market: Construction of new apartment units is rising while vacancies of existing ones are falling.
That’s the takeaway from Marcus & Millichap’s fourth-quarter Detroit multifamily report.
According to the report, Detroit’s multifamily vacancy rate will drop to 3.2 percent by the end of the year. This is the continuation of a trend: Marcus & Millichap reports that Detroit’s apartment vacancy rate fell to its lowest level since 2000 in the third quarter of the year.
On a year-over-year basis, the area’s multifamily vacancy rate has dropped 50 basis points on a year-over-year basis.
The news is good when it comes to monthly rents, too. Marcus & Millichap reported that after climbing 3.8 percent last year, the average effective rent hit a new high in 2019, reching $1,007 a month in the fourth quarter. That’s an increase of 4.6 percent in effective rents.
With the market this strong, it’s not surprising that developers have reacted. Marcus & Millichap reported that developers will have completed 1,400 new apartment units during 2019. That’s well above last year, when developers added 800 units to the Detroit market.