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Market Report

Detroit Multifamily Market Report

3Q 2023

Renter Demand Shifts to Lower-Cost Properties,
as Class A Apartments Face Headwinds

Class B and C vacancies are surpassed by the high-end sector. Detroit expects the second-lowest completion total among major Midwest markets in 2023, slotted above only Cleveland. Still, roughly 6,000 units are slated for delivery in 2024 and 2025, a potential upcoming headwind for Class A assets in areas of high construction. Downtown-Midtown-Rivertown and Southfield are each set to receive over 1,000 units across the next two years, expanding the submarkets’ inventory by 6.1 and 11.2 percent, respectively. Vacancy rates in low- and mid-tier assets were both at least 70 basis points below Class A in the second quarter, highlighting renter preferences for budget-friendly units amid ongoing macroeconomic concerns. The mean effective Class A rent continued to increase by double digits year-over-year in June, pricing out cost-conscious renters. 
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