More than 1,000 new apartments hit the market in the in the Twin Cities during the first quarter, but the average vacancy rate increased only slightly to 2.7 percent, according to a new Twin Cities Metro Area TRENDS report from Marquette Advisors. Here's a snapshot of what's happening around the region during the first quarter:
- With the supply of units across the metro still below what's considered healthy levels, rents are on the rise.
- The average rent across the metro rose 3.5 percent to $1,000.A total of 1,011 new units were added, including 757 units in Minneapolis and another 254 units in St. Paul. Absorption totaled 636 units for the quarter, in spite of a somewhat sluggish job market, as metro employment increased by only 900 jobs through March 2014, according to data from the MN Department of Employment and Economic Development (MNâDEED).
- The Downtown Minneapolis submarket saw its vacancy rate increase to 5.0 percent, up from 2.2 percent a year ago and 4.0 percent last quarter. This submarket has been the most active in the region in terms of new construction and leasing activity with 1,246 new units coming online in 2013 and another 389 through the first quarter of 2014. Rents downtown increased 9.1 percent, mostly a reflection of higher-priced luxury units hitting the market.
- Vacancy rates are expected to increase is over the next several months as another 1,30-plus units are expected to open during the year.