Minneapolis 2Q23 Multifamily Market Insights Report: Vacancy ticks lower at midyear

Highlights:

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• The multifamily market in the Twin Cities improved gradually during the second quarter as vacancy conditions inched lower and apartment rents gained some ground. Developers are on track to deliver about 8,000 units in 2023, a dip from the elevated supply gains of the past two years.
• The local vacancy rate improved slightly during the second quarter, dipping 10 basis points to 5.2%. Year over year, the rate is up 100 basis points.
• Asking rents continued to trend higher, rising 1.2% in the second quarter to $1,510 per month. Area rents increased 3% during the past 12 months.
• Multifamily transaction activity in the Minneapolis-St. Paul market slowed during the first half of 2023. The median sales price to this point in the year is $110,900 per unit, while cap rates are averaging between 5.75% and 6.5%.

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