In this week's Run Club LIVE session, we recapped Twin Cities market conditions with information presented at the MN Real Estate Summit. Janet shared her top 10 key takeaways from the event. Below are the high points from the summit (information source: CoStar's market presentation).
Minneapolis market ranks 12th nationally in highest units delivered in 2023
New production in the Twin Cities market already peaked & will drop in 2025
Minneapolis topped the list in absorption of units in December 2023 - especially in 3-star product
We're LOW on years-of-supply - based on demand, we have just 2.5 years of supply
New deliveries are dropping off in 2024 and 2025
Growth in Minneapolis - we're attracting demand from out of state (30-40% of renter demand)
We're an attractive market for both out-of state renters & and age 35-54
Minneapolis has strong wage growth and slow rent growth
Concessions are at record levels, near 50% of properties offering a concession
It could be worse!
Overall, there are some positives! There is strong demand and we expect the current oversupply to correct itself, there is a big opportunity to appeal to out-of-state renters (as this makes up 40% of current demand), 3-star assets have the highest rate of demand in the country, and the increase in renters age 35-54 could mean renters by choice resulting in higher resident retention as long as a property is staying competitive with service, rates, and overall living experience.
Several challenges and areas of opportunity remain in our market with persistent staffing shortages and a lack of experienced leasing agents, teams being expected to do more with less as marketing budgets decrease due to increasing operating expenses, and a changing landscape of concessions as rent rates begin to level out and non-optional fees take effect.
If any of these insights are eye-catching and you'd like to learn more, head over to Run Club to view the full presentation and session recording and see where Minneapolis falls amongst other markets in the country.
Don't forget to RSVP for upcoming virtual Run Club LIVE events, every Monday at 12pm CT, we can't wait to see you there!
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