Renting continues to be the hot ticket in the Twin Cities, according to the latest data from Marquette Advisors.
During the third quarter the average vacancy rate in the metro area was 2.3 percent, down slightly from the second quarter when the average was 2.4 percent. Last year the vacancy rate averaged 4.2 percent.
What's driving demand? Tight supplies as more would-be home buyers choose renting instead. The market is getting a boost, too, from a growing interest in urban living. In downtown Minneapolis the average vacancy rate was 1 percent, down from 3.1 percent last year. In downtown St. Paul the average vacancy dropped much more dramatically, falling from 8.4 percent last year to 1.1 percent this year.
All of these declines in vacancies come at a time when more rental units are coming on the market. So far this year the market absorbed 2,950 previously unoccupied units, including some that were already built.
Still, rents are on the rise. Metrowide, the average rent price in the metro area was $925, up 2.3 percent from last year. The biggest gains in the metro happened in downtown Minneapolis, where rents average $1,230, up 8.6 percent.