Rental Market Improving
There have been two articles recently in the StarTribune which have reported significant declines in rental housing vacancies in the past year. The improvement is thought to be the result of the addition of about 17,300 jobs in 2010, the majority of them coming in the second half of the year. Urban locations are being favored over suburban locations by young renters with the downtown Minneapolis and downtown St. Paul vacancy rates declinging by more than half to 2-3% on average. The southwest metro market vacancy rate is expected to fall below 3% later this year. Other areas in the metro are also seeing improvements in their vacancy rates, but their levels remain a bit higher. The metro market saw a positive net absorption of about 6,400 units during 2010. While rents have yet to move up, analysts say rents have stabilized and will increase later this year due to brisk demand from newly employed ecco-boomers. Young renters are thought to prefer a location that is 10-20 minutes from their work location and that is convenient to public transit. One report included the Minneapolis-St. Paul rental market in the nations top 10 apartment investment markets based on its fore-casted employment growth, vacancies, housing affordability and other factors.
What does this mean? If you can't sell your house and you need to move, renting it may be a viable option for you. The metropolitan area now has a rental property listing facility on the MLS (multiple listing service) network used by real estate agents. Agents who have taken training to service this market can assist homeowners in finding, screening and leasing their property to tenants and/or provide full range property management services. Be sure to inquire about an agent's experience and education in residential leasing before entering into any service contract. In addition, with price declines and low interest rates, the opportunity to purchase investment property has never been better.