The Minneapolis Real Estate Opportunity You’re About to Miss (Again)

For everyone who’s ever told me they wished they’d been in a position to either buy or buy more Minneapolis duplexes during the Great Recession, where are you now?

Through little to no fault of its own, the city currently has an 8-month supply of duplex inventory. That means if no new listings hit the market from today forward, at our current sales pace, it would take us 8 months to be sold out. That’s a buyer’s market. We haven’t seen that in over a decade.

Many people have given me a list of reasons they don’t want to own in Minneapolis. That list often includes rent control, which the city doesn’t have. It includes a longer eviction notice period. Some note recent unrest, brought in by outsiders.

Those same people forget that everywhere in the world, people want to live by water. Minneapolis has 13 lakes 5 acres or more in size, three primary creeks and the Mississippi River flowing through it.

The city’s park system is considered among the best in the nation with over 15% of its land dedicated to parks.

And, as of late, the city’s residents have become known all over the world for compassion for their neighbors.

In my opion, Minneapolis also has some of the best duplex, triplex and fourplex housing stock in the nation. It also consistently outperforms it’s sister city, St Paul, in gross rents for small multifamily properties.

If I was a tenant, I would want to rent in Minneapolis. And because of that I own and will continue to own rental property in the city.

Given all that, mortgage interest rates hovering around 6% and February’s duplex buyers closing on properties at an average of 4.9% below their originial list price, I don’t understand why more people aren’t rushing out to buy before everyone else figures it out.

There’s plenty of inventory to choose from; in fact, there were 60 new listings and 148 active listings in February. The latter tally was the most for that month in over a decade.

The Whittier neighborhood lead the way with 7 new listings. The Hawthorne and Jordan neighborhood tied for second, adding with two new listings each.

The market really offered someonething for everyone. Of the new inventory, a fire-damaged 5 bedrrom, 4 bathroom fourplex in the Folwell neighborhood offered buyers a rehab opportunity at a list price of $87,900. A Lowry Hill duplex boasting 14 bedrooms , 8 bathrooms, a 4 car garage and interior worthy of a magzine shoot topped offered a turnkey live-in solution at $2.2 million.

February also saw 20 small multifamily properties sell. Owners obtained a median sales price of $401,250 after spending an average of 57 days and 97 cumulative days on the market. The Lynnhurst neighborhood lead the way with two sales for the month.

The market topper was a 12 bedroom, 12 bathroom townhouse-style fourplex in the Lind-Bohannon neighborhood, which traded at $895,000. A cosmetic fixer in the Hawthorne neighborhood with 4 bedrooms and 2 bathrooms was the value of the month, closing at $213,450.

In my mind, until they move the lakes and the duplexes, Minneapolis will continue to be a great place to invest.