The Minneapolis-St Paul metro has the tightest vacancy rate of any major city in the U.S. according to the national multifamily housing consulting firm Witten Advisors.
According to a story in the Star Tribune, demand exceeds supply. To solve that, at the start of 2017 there were 8,440 units under construction, with another 31,752 in the planning stages.
This is good news, of course, if you’re a duplex owner in the Twin Cities. After all, lower vacancy rates mean higher rent.
So where are all of these tenants coming from?
According to Ryan Davis, senior economist for Witten Advisors, half of the growth in the rental market in the last seven years has come from renters age 55 and older, and 40 percent of the growth has come from renters who make $75,000 or more a year.
Matt Rauenhorst is vice president of Opus Development Co., an active developer of multifamily properties in the Twin Cites. In Opus’ higher end developments, he says residents are willing to pay more in exchange for “condo-like finishes”.
As more new construction multifamily properties come into the market, smaller property owners may eventually find the need to update properties to stay competitive at higher rent points.
For now, however, demand continues to exceed supply. It’s a great time to be a landlord in the Twin Cities.