Friday, March 20, 2015

Amid spike elsewhere in US, Minneapolis rental prices going down

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Recent data from real estate company Zillow show that while rental rates have been rising at a steady rate for most of the US, the Twin Cities metro was one of the two major markets that saw decreases in rental rates. The other city that had a decrease in rental rate was Chicago. In January, rental prices increased a seasonally adjusted 3.3 percent compared to the same period a year ago.

The Great Recession had left many Americans with low incomes and difficulty in saving for down payment, and therefore unprepared for homeownership. Others, meanwhile, are just struggling with expensive housing. At the end of 2014, homeownership rate went down to 64 percent, which was the lowest level it has been at in 20 years.

With the job market improving, more millennials are expected to rent apartments. Developers, meanwhile, have started to respond to the increased demand and there has been a 24.5 percent increase in groundbreakings for apartment complexes.

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While rental prices increased for most of the country, the median price in Minneapolis went down 0.3 percent to about $1,500. Renters are reported to have been taking advantage of the fact that Minneapolis has deviated from the nationwide rental pricing trend. With the decrease in rental prices, people looking to rent can expect to find a robust market with several choices available.

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Steve Liefschultz is a banker, a real estate investor, and the owner of a real estate development and management company in Minnesota. For more news and updates on the Minnesota real estate market, follow this Facebook page.