Market Report

2023 Q4 | Office Market Report (Signature Associates, Detroit)

Fourth quarter 2023 closed with a direct vacancy rate of 21.54%, an overall vacancy rate of 24.22%, and an average asking direct rental rate reported at $19.02 per sq. ft. In December, the Michigan unemployment rate was recorded at 4.3%, identical compared to this time last year. The US job market continues to remain resilient despite an uncertain economy and elevated interest rates. In October, employers posted 8.9 million jobs tumbling to the lowest level since March 2021, while in December openings slightly increased with employers posting 9 million jobs, compared to 8.8 million in November. Recent data indicates a gradual movement towards a balanced pre-pandemic job market with hiring remaining steady and limited number of layoffs. University of Michigan economists are projecting a full recovery of jobs for Michigan by early 2024, followed by two years of growth and a decline in terms of inflation. US consumer inflation eased slightly in November, while consumer confidence to some degree increased during December. The Michigan economy holds steady despite facing several challenges throughout the year including an automotive strike, supply chain shortages, and elevated interest rates bearing an impact on loans and US home sales. The Federal Reserve closed out 2023 with the decision to keep the key interest rate unchanged since the last increase of 0.25% in July and appear to be confident in a “soft landing” of the economy in 2024.