Detroit Multifamily Investment Forecast
Vacancy Remains Near Record Low Despite Heightened Supply Wave;
Local Buyers Drive Transaction Velocity
Economic turn around bolsters Detroit's multifamily sector. The strength of Detroit's labor market has played a pivotal role in tightening market conditions in the apartment sector. Roughly 96,000 positions were regained last year, lowering unemployment below the market's pre-pandemic level and bringing stability to the metro. Meanwhile, vacancy contracted to 2 percent and effective rents grew nearly 7 percent, both record levels in the past two decades. This year, notable employers like Amazon and Ford Motor Co. plan to expand operations within the metro, providing further optimism to the labor market moving forward. However, a few headwinds remain, potentially slowing momentum. The population of Detroit is expected to decline for a third consecutive year and supply additions are projected to reach a 19-year high in 2022. This combination will likely place upward pressure on availability this year, especially in the CBD as return-to-office timelines remain uncertain. Even though the rate is expected increase, metrowide vacancy is still projected to rank among the lowest in the nation at year-end.