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MILWAUKEE-Given a weak economy and low interest rates available in an already extremely affordable single-family housing market, the local multifamily sector is faring well, concludes Marcus & Millichap Real Estate Investment Brokerage Co. There are more buyers chasing a low inventory of multifamily product, the brokerage firm observes.

Investor interest remains strong even as vacancy rates are expected to rise from 7.5% at the beginning of 2002 to 8% at year’s end, Marcus & Millichap predicts. Meanwhile, the company predicts sales prices will edge up 1.5% from the current $66 per sf, which is up 10.5% over the last four years.

Rents are predicted to increase by 2% to 2.5%, Marcus & Millichap predicts, with suburban submarkets expected to outperform the city. Asking rents now average $650 per month, according to the firm.

Although 400 units will come on the market, construction activity has been conservative, according to Marcus & Millichap’s recent report.

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