April 12, 2021

Detroit Q4 Multifamily Market Report: Vacancy Remains Low Despite Economic Pullback

Highlights:

The Detroit multifamily market maintained a low vacancy rate, and rents remained in a very tight range in 2020, despite economic headwinds that stalled the pace of improvement. With the economy forecast to regain momentum in 2021, apartment fundamentals should remain healthy.
Apartment vacancy in Detroit posted healthy performance in 2020, with the rate inching up just 10 basis points for the year. Vacancy declined in the fourth quarter, dipping 20 basis points to end the year at 3.3 percent.
Asking rents ticked up 0.4 percent in 2020, ending the fourth quarter at $1,067 per month.
Developers delivered nearly 1,100 apartment units in 2020, but the pace of construction is forecast to accelerate in the year ahead. Projects totaling nearly 4,900 units were under construction at the end of 2020.
The Detroit multifamily investment market recorded mixed performance in 2020. The number of transactions was similar to levels from 2019, but there was a decline in activity in larger transactions. The median price fell, but cap rates compressed, averaging approximately 6.4 percent.