Apartment construction has reached a six-year high in Minneapolis/St. Paul, with the bulk of the activity coming in urban core submarkets. At the same time, rent growth levels are easing. But construction doesn’t appear to be the cause.
The most significant shift seen of late in the apartment market performance for the Twin Cities is a slowdown in rent growth. Prices are still rising, but they’re not going up at the way-above-normal level that had been seen during 2011.
Every submarket in the Minneapolis/St. Paul area has an occupancy rate around 96 percent or better. As a result, rent growth was unusually high (by local standards) in 2011.
The Minneapolis/St. Paul apartment market suddenly is a red hot market for rent growth. Greg Willett explains why.
After only moderate rent growth in 2010, Minneapolis/St. Paul led the nation for same-store rent growth in 1st quarter 2011.
Vacancies are rare in the Twin Cities — but so are meaningful rent hikes.
Minneapolis tends to register the strongest apartment occupancy rate across the Midwest’s larger markets, and that’s the case again currently. The Twin Cities apartment base of about 269,000 units was 95.5 percent full as of mid-2010, outperforming the norm for the Midwest region by nearly 2 full percentage points. Although occupancy hasn’t gotten all the way back to the 96 to 97 percent level that was posted in 2007, some progress is occurring, as June 2010 occupancy topped the late 2009 rate by 1.9 points.