Detroit Multifamily Report – Fall 2020
While the metro's economy recorded a steep drop, rent growth remained resilient, heavily outperforming the U.S. average.
Detroit rent evolution, click to enlarge
Despite the vulnerability displayed in recent decades, Detroit’s multifamily market has not succumbed to the current downturn. Rents in the metro rose a substantial 0.7 percent on a trailing three-month basis through October to $1,050, with Lifestyle rents posting a remarkable rebound after six consecutive months of negative performance that ended in March.
READ THE FULL YARDI MATRIX REPORT
Employment took a serious hit, declining 14.9 percent in the 12 months ending in September, trailing the -9.3 percent national average. The unemployment rate slid to 12.8 percent in August from the 26.5 percent all-time high registered in May, with the preliminary September figure clocking in at 12.5 percent. As expected, because of the state’s automotive industry concentration, manufacturing was among the worst-hit sectors, contracting by 9.8 percent in the 12 months ending in September. Even though Detroit has lost a large chunk of it workforce since the onset of the pandemic, the metro is better positioned to weather the immediate fallout of the current crisis than it was in past downturns.
Detroit sales volume and number of properties sold, click to enlarge
Developers delivered only 547 units through October and had another 5,732 under construction. Meanwhile, $194 million in multifamily assets traded during the first 10 months of the year, with one transaction recorded in April accounting for nearly half of that.
