The Minnesota Housing Partnership just released their latest version of their “2×4″ Report and there are some important takeaways:
3.1%
The vacancy rate of of rental units in the Twin Cities – the lowest since 2001 and well under the “balanced market” level of 5%. Vacancy rate was over 7% just 18 months ago.
$916
Average rent, up for the last 3 straight quarters.
13%
Percentage of renters in non-luxury units with past due rent – down from approximately 24% in Q2 2009.
6%
Percentage of mortgages in Minnesota that are 60+ days delinquent – down from a peak of 8% in Q4 2009.
6639
Number of homeless kids in the Twin Cities – up each year for the last 3 years.
Takeaways:
- With the extremely tight rental market, rents are rising and will likely continue to rise until vacancy rates can climb through a building of/conversion to rentals or increasing home ownership rates.
- In the near term, the fastest way to create rental housing units is to convert foreclosed properties into rentals, which we see happening in great numbers right now.
- As rents increase, the rent vs. own equation improves further, which may push a few more renters to become homeowners.
- Homelessness continues to be an issue in the Twin Cities – and is of particular concern for the youngest amongst us. Higher rents will not help matters.
