by Dan Rafter
Here’s the big number: Since the beginning of 2010, developers have built more than 110 apartment projects with roughly 13,300 units in the Minneapolis/St. Paul market.
That’s impressive. And it’s the highlight of Dougherty Mortgage’s Market Viewpoint report on the Twin Cities’ multi-family market for 2014 and 2015.
As Dougherty’s report says, the multi-family boom in the Twin Cities isn’t over, either. According to the report, the market will see the arrival of 22 new multi-family projects in 2015. These projects will add more than 3,800 new rental units. And in 2016? Up to 11,400 rental units are being proposed for the market.
During the last three years, rental units have made up from 20 percent to 50 percent of all the new housing units in the Minneapolis/St. Paul market, according to Dougherty Mortgage.
What’s behind this boom? Not surprisingly, a pent-up demand is driving much of the multi-family construction activity here. As Dougherty reports, there simply wasn’t much multi-family construction from 2008 through 2011. There weren’t enough housing units for the market’s growing population.
According to Dougherty’s report, the number of households in the Twin Cities continued to expand by about 14,000 to 15,000 people each year. But during that four-year period, housing production brought no more than 5,000 units in any given year.
Developers, though, haven’t been shy about meeting the area’s demand for rental housing since 2010, in part thanks to the low interest rates that remain today.
At the same time, Minneapolis/St. Paul has become a more interesting place to live. As Dougherty reports, the Twin Cities’ unemployment rate of 3.8 percent in 2014 ranked as the lowest among the 49 metropolitan areas in the United States with 1 million residents or more. The market also boasts plenty of recreational and cultural activities, amenities that are making the area a hot spot for what Forbes Magazine has called “young creatives.”
The report makes for interesting reading. And it’s filled with positive news for anyone who works in the Twin Cities’ real estate market. The takeaway? Minneapolis/St. Paul’s multi-family market is as strong as ever. And it looks to remain strong for some time.