Midwest College Towns Like Ann Arbor Maintain Apartment Pricing Power

Apartment market performances tend to be holding solid in college towns across the Midwest, perhaps offering an under-the-radar investment opportunity. While the pattern registers across quite a few individual markets, Ann Arbor – home of the University of Michigan – provides a particularly striking example of the trend. Annual rent growth for conventional apartment communities in Ann Arbor has averaged 4.0% since early 2014, with pricing as of mid-2018 up 5.0% from the year-earlier rate. Helping support rent growth in Ann Arbor, the market’s occupancy rate is high at 97.4%. Some building activity is seen in Ann Arbor, but the pace of construction doesn’t appear to have reached a magnitude that would derail occupancy or rent growth. Identified ongoing building totals about 500 units of conventional product and just over 1,200 beds of student housing.