Detroit Idles Growth
Detroit’s recovery continued well into 2022, with fundamentals staying healthy. Average asking rents rose 0.8% on a trailing three-month (T3) basis through June, to $1,228, 30 basis points below the national rate and still relatively affordable compared to the $1,706 U.S. figure. Detroit’s limited new inventory continued to boost rent development. And even though the occupancy rate in stabilized properties declined 50 basis points in the 12 months ending in May, it still remained high, at 96.5%.
The unemployment rate in Detroit stood at 4.9% in May, a 20-basis-point improvement from January, trailing the state (4.3%) and the U.S. (3.6%), according to the Bureau of Labor Statistics. Employment expanded 5.1%, or 89,000 jobs, in the 12 months ending in May, surpassing the national rate by 40 basis points. Leisure and hospitality led gains (13.2%, 20,700 jobs), followed by Detroit’s largest sectors—trade, transportation and utilities and professional and business services—which added 33,500 jobs combined. As economic volatility intensified, the metro’s tech ecosystem and the recent and upcoming expansions in the automotive industry are poised to sustain the recovery.
Developers delivered 1,203 units in 2022 through June, already reaching the annual average for the past decade. Meanwhile, investors traded $419 million in multifamily assets for a price per unit that rose 49.4% year-over-year, to $150,239.
Read the full Matrix Multifamily Detroit Report-August 2022