The epicenter of the Twin Cities apartment boom is finally showing some signs of softening.
In downtown Minneapolis, the average vacancy rate was 8.8 percent in the first quarter, up from 5 percent last year, according to Marquette Advisors.
Across the 13-county metro area, the average vacancy rate remained stable at 2.7 percent.
The report shows that while the apartment boom in the region appears to have peaked, this will be another big year for projects. During the first quarter, 554 apartments came to market across the region, with a total of 3,100 units expected by the end of the year. That’s compared with 4,391 in 2014 and 2,763 in 2013.
In downtown alone, about 300 units came online during the first quarter and another 866 units are expected during the remainder of the year.
Despite all those new units, there’s still upward pressure on rents. Across the metro area, the average rent was $1,018 compared with $1,000 a year ago. In downtown Minneapolis, average rent increased 6.8 percent to $1,493.