September 23, 2022

Minneapolis-St. Paul Q2 Multifamily Market Insights: Tight Vacancy and Rising Rents Prompting New Development

Highlights:

Supported by steady growth in the local economy, the Minneapolis-St. Paul multifamily market maintained solid operating conditions during the second quarter. Rents pushed higher at a faster clip than at the start of the year, while vacancy stayed in the low-4 percent range. Construction of new units is gaining momentum.
Local vacancy remained unchanged during the second quarter, finishing the period at 4.2 percent. Year over year, the rate improved by 10 basis points.
Apartment rents rose at an accelerating rate in recent months, increasing 1.9 percent during the second quarter to $1,466 per month. Year over year, rents are up 5.9 percent.
Transaction activity slowed in the last three months. The median sales price to this point in the year is $200,400 per unit, up 34 percent from the median price in 2021. Cap rates are averaging roughly 4.6 percent.