Twin Cities Multifamily Report – January 2022
The area's fundamentals were some of the most balanced in the U.S. these past two years.
Showing a great deal of resilience, the Twin Cities multifamily market is making strides toward full recovery as health-crisis-induced difficulties fade away. Mirroring pre-pandemic trends, rent growth is slow, but steady. On a trailing three-month basis through November, rates inched up 0.5 percent to an average of $1,425. Meanwhile, U.S. rents increased by 1.0 percent to $1,590.
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Employment improved by 5.7 percent in the 12 months ending in September, with leisure and hospitality leading growth with 23,500 jobs. Preliminary Bureau of Labor Statistics data shows that the unemployment rate in Minneapolis-St. Paul decreased to 2.6 percent in October, marking the lowest level reported since December 2019. This has put great pressure on employers, who are having a hard time finding and retaining talent, despite increased pay. Four employment sectors contracted by a combined 7,200 jobs, including government, financial activities and information. Several newspapers and publications closed or moved to a digital structure, resulting in hundreds of employees being furloughed.
Investors’ appetite for Twin Cities multifamily assets picked up in 2021, hitting $1.2 billion through November. This was a significant improvement from 2020’s $883 million total investment volume. Developers delivered 7,382 units in the first 11 months of 2021 and had another 18,028 apartments under construction.