Apartment occupancy levels off as new units come online

EXECUTIVE SUMMARY

In 2014, the City of Grand Rapids commissioned a study to analyze the housing market in Greater Grand Rapids. The analysis predicted the number of new rental and owned housing units that could be absorbed based on current supply and demand trends. At the time, Michigan ranked near the very bottom of the net migration by state list, and the study warned that if West Michigan did not take active steps to incentivize population growth, these absorption figures would not be met.

Few projected that the area would experience such rapid growth. Grand Rapids-Wyoming Metropolitan Statistical Area was distinguished as the nation’s fastest growing large city with a year-over-year growth rate of 7.8 percent in 2016, more than 11 times the national average. While that pace could not efficiently be maintained, Grand Rapids has still seen continued population growth, creating a demand that exceeded original expectations. Developers took notice and responded quickly by establishing numerous new projects for the area. Beginning in 2015, 906 rental units in multifamily complexes were added to the originally planned 1,782 to be completed, with another 1,455 in the pipeline (defined as under construction or permitting documents being filed). Of the 906 delivered units in 10 diff erent complexes, the average weighted occupancy rate is 90.33 percent. The total market occupancy is approximately 94.5 percent.

Click here for the full 2018 Q1 West Michigan Apartment Market Report