Detroit Multifamily Market Report
Renter Demand Shifts to Lower-Cost Properties,
as Class A Apartments Face Headwinds
Motor City leads the nation in Class A rent growth. 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. Metro 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. Regardless, the mean effective Class A rent continued to increase by double digits year-over-year in June, the highest increase in the nation.