It took only a week for Steve Rajavuori to find renters to sign on the dotted line for his four-bedroom, two-bath house in Lakeville.

Just another piece of evidence that residential rentals are in high demand.

New survey results show that, compared to 2010, it's more than twice as difficult this year to find a rental unit in Dakota County.

Last year, the average vacancy rate in Dakota County was about 6.9 percent, but this year it fell to 3.4 percent, according to the Dakota County Community Development Agency's annual rental market survey. In Scott County, the average vacancy rate is a little higher than 4 percent.

"I think a higher rate of renting is a new norm, and it will be that way for a while," Rajavuori said.

The rental market is getting tighter, even though there are more residential units being rented.

Rajavuori, in addition to renting out his own properties in Lakeville and Burnsville, also heads a property management services company that handles other people's residential rental property. He's finding that a lot of people who can't sell their homes are deciding to rent them.

"Real estate is not what it used to be," he said.

High quantity, high demand

New 2010 Census numbers show that rentals are making up more of the housing market. In several south-of-the-river cities, rentals make up 25 percent or more of the housing stock.

Even so, most of the cities surveyed in Dakota County have rental vacancy rates below 5 percent. Burnsville and Apple Valley have the lowest average vacancy rates: Only about 2 percent of rentals in those cities are available.

It's the lowest the vacancy rate has been since 2001, when it was a little more than 1 percent, said Sara Swenson, assistant director of administration for the county's Community Development Agency.

"It's a tighter rental market. ... The demand is there," Swenson said.

One of the reasons for the decrease in available rentals is because some of the renters who were doubling up on renting in the past few years may feel financially secure enough to be able to rent on their own, Swenson said.

Another reason is that due to the still-faltering economy, more and more one-time homeowners are turning into renters, she said.

In the annual survey, the high demand for rentals was also attributed to employment changes and homes going into foreclosure.

Rents are likely to rise

While rental prices have been stable, Swenson said she anticipates that prices will begin to rise next year.

Gwen Millard, community manager for the Woods of Burnsville apartments, said that some potential renters will be surprised at how much rents already have gone up.

"I think with the way the economy is right now, I do believe there is some sticker shock for renters," she said.

The average rent at Millard's 400-unit apartment complex has increased $150-plus in the past nine months, she said.

With managers no longer having to offer incentives to draw renters, rental prices are now basically in line with how much units are actually worth, Millard said.

For people like Holly Graner, who moved into a rental townhouse in Eagan in mid-April after renting an apartment in Inver Grove Heights, renting is fast becoming a way of life.

"I like renting because then I don't feel tied down to a specific area for a long period of time."

Nicole Norfleet • 612-673-4495