Twin Cities Multifamily Report – May 2024
Most fundamentals continue to improve in Minneapolis-St. Paul.
Minneapolis-St. Paul fundamentals improved in the first quarter of 2024, despite macroeconomic uncertainty. Rents were up 0.3 percent on a trailing three-month basis, to $1,500, while the average overall occupancy rate was flat year-over-year through February, at 94.8 percent. Considering that only a few metros recorded occupancy improvement, this is a sign of strong absorption for the Twin Cities.
Employment in the Twin Cities expanded by 1.5 percent in 2023, adding 31,500 net jobs. The metro’s rate of growth was 50 basis points below the national average. Education and health services led gains, with 15,300 positions added, marking a 4.1 percent increase. The area’s jobless rate stood at 3.3 percent as of February, 60 basis points below the U.S. figure, according to preliminary data from the Bureau of Labor Statistics. And while the job market is starting to show some cracks, the metro has no shortage of large-scale projects. One such upcoming development is a 3 million-square-foot technology park proposed in Farmington, Minn.
Development in the Twin Cities is decelerating, due to market conditions. Just 1,263 units came online this year through March, a clear downward shift compared to the continuous growth registered in the previous six years. The metro also recorded $287 million in multifamily transactions through March, an improvement from the same time frame last year.
