The research firm Marquette Advisors reporting the vacancy rate for Minneapolis and St Paul duplexes and apartments dropped from 6.1 percent in the first quarter of 2010, to 3.1 percent in the first quarter of 2011, there suddenly seems to be something of a rapid recovery happening in the rental market.
According to a report in this morning’s Finance and Commerce, the apartment sector is the only area of commercial development showing signs of life this year.
To that end, there are an estimated 870 new apartments being built this year, with somewhere between 1100 and 1300 units on the books for next year.
This expansion is due, in part, to low vacancy rates allowing landlords to hike rents for the first time in five years.
Now, these aren’t huge rent increases. On average across the metro, rents are up just 1.7 percent from the first quarter last year. However, according to Marquette, increases have been much greater in hot urban neighborhoods like Uptown, downtown and near the universities; where rents were often up as much as 8 percent.
The suburbs and outer ring communities are likely to see rent improvements as well, but not at the same pace.
Clearly, tighter lending standards, a sluggish economy and swelling numbers of prospective tenants as a result of foreclosure have increased the demand for rental units.
And with an estimated 4 million plus more homeowners delinquent on mortgage payments nationwide, the trend is sure to continue.
Looks like it’s going to be a pretty good time to buy and own Minneapolis duplexes; for a long time to come.