Detroit Multifamily Report – March 2023
Despite a national slowdown, the Motor City is carrying its weight.
Detroit fundamentals are in recovery mode, as lingering inflation and recessionary fears build, but the city is poised to withstand a national economic slowdown. Pent-up demand for automobiles has helped revitalize the metro’s local economy. Rent movement was on par with the U.S. rate, down 0.3 percent on a trailing three-month basis through January, to $1,222, well below the $1,701 U.S. figure. Occupancy remained above the 95 percent mark, despite a 1.0 percent dip in the 12 months ending in December.
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Unemployment stood at 3.2 percent in December 2022, outperforming pre-pandemic levels and reflecting a relatively quick recovery. This placed Detroit below the 4.3 percent state and 3.5 percent U.S. averages. Employment expanded by 3.8 percent, or 50,700 jobs, in the 12 months ending in November, just 10 basis points below the national average. Since late 2021, the metro’s rate has been on par with the U.S. figure. Trade, transportation and utilities—Detroit’s second-largest sector—led gains, adding 14,400 positions. The ongoing recovery of the leisure and hospitality sector moved it into second place, with 9,700 jobs.
Just 68 units came online in January, and another 3,453 were underway. This followed the best year in deliveries, with solid volume despite a drop in construction starts. Investment also registered a record year in 2022, at $900 million, for an average price per unit that ticked down 2.4 percent, to $132,782.