Minneapolis duplex and apartment vacancy rates saw a slight increase in the fourth quarter of 2011, according to Marquette Advisors.
(The report doesn’t measure duplexes specifically, but lumps everything into “apartments”.)
At year’s end, the Twin Cities saw an apartment vacancy rate of 2.8 percent. While this is unbelievably low, it nonetheless represents an increase from the 2.3 percent vacancy rate we experienced during the third quarter of 2011.
The figure represents an average of every neighborhood in the Twin Cities metro area. It’s interesting to note downtown Minneapolis saw vacancy rates rise from 1 percent to 1.9 percent from the third quarter to the fourth.
Uptown also saw an increase, finishing the year at a 2.2 percent vacancy rate, rather than the 1.8 percent it saw in the third quarter.
The Minneapolis-St Paul area, still has one of the lowest vacancy rates in the country. Reis Inc. reports it is third lowest in the country; trailing only New York and New Haven, Conn.
In fact, the national average vacancy rate is 5.2 percent– almost double that of the Twin Cities at 2.5 percent.
This low vacancy rate has continues to put upward pressure on rent, with the average apartment now going for $927 a month; up 2.1 percent from 2010.
Vacant units charging more than $1500 a month, however, have a 3.7 percent vacancy rate. This is down from the 4.9 percent vacancy rate these units were at in 2010.
To put things in proper perspective, a vacancy rate of 5 percent is considered balanced; where it neither favors the tenant nor the landlord. Anything less than that, and it’s and the landlords have the advantage. And of course, when the vacancy rates are above five, the tenants have the upper hand.
Duplex owners should bear in mind at some point in the not too distant future, there will be a tipping point at which it makes far more economic sense for tenants to buy a duplex or house than continue renting.