Is A Minneapolis Duplex Rent Bubble Next?

duplex bubbleAccording to a recent report from Zillow, median rents for duplexes and other rental properties increased 3 percent between January of 2011 and 2012, while during the same period, home values declined 4.6 percent.

In many large cities, rents rose almost exactly as much as home values fell. Take Chicago, for example; rents jumped 9.1 percent for the year, while home values fell 10.4 percent.

Here in Minneapolis, rents rose 11 percent, while housing values dropped 8.1 percent.

Perhaps that jump is why Minneapolis duplexes and other investment properties seem to be selling faster than new inventory is coming on the market.

As rents rise, duplex ownership will become more attractive and affordable for many duplex tenants than renting.

The challenge is figuring out when that will happen.