Minneapolis Q3 Multifamily Market Insights: Investment activity picks up, even as rates rise

Highlights:

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• The Minneapolis-St. Paul multifamily market remained in a strong position despite vacancy inching higher in recent months. Asking rents continued to rise during the third quarter, and developers are active as the pace of new deliveries is tracking last year’s elevated levels.
• Area vacancy ticked higher in recent months after holding steady in recent quarters. The vacancy rate rose 20 basis points in the third quarter to 4.4 percent. Year over year, vacancy is up 40 basis points.
• Local asking rents reached $1,481 per month in the third quarter and are 5 percent higher than one year earlier.
• Sales activity accelerated during the third quarter while prices remain above last year’s figure. The median sales price to this point in the year is $190,000 per unit, up 27 percent from the median price in 2021. Cap rates are averaging in the mid-4 percent range.

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