The condo inventory of downtown Minneapolis remains low, realtors say, but developers have new projects on the horizon.
Joe Grunnet, founder of North Loop-based real estate company Downtown Resource Group, said it’s a sellers’ market thanks to rising prices and high demand. Sellers are even able to take advantage of pocket listing strategies — when buyers pay a premium for units that haven’t hit the market yet, and sellers don’t have to deal with multiple showings. Grunnet said the market would “slowly but surely” add more supply.
“All your riverfront neighborhoods are high-demand,” said Grunnet, who specializes in selling and leasing downtown condos and lofts. “There’s a lot more momentum going on right now with new projects.
“I think in the next 24 months, 36 months we’ll see some new projects come down the line.”
The downtown condo market, especially near the up-and-coming East Town, continues to be strong. In the six areas of central Minneapolis, closed sales are up about 5 percent percent year-to-date over last year, according to local market numbers from the Minneapolis Area Association of Realtors.
The number of new listings over the past year has stayed relatively level, increasing about 2 percent year-to-date. But not all of the neighborhoods — North Loop, Downtown East, Downtown West, Elliot Park, Loring Park and Stevens Square-Loring Heights — fared equally.
Downtown East saw the greatest year-to-date change of all six areas, seeing 53-percent more new listings and consistent closings between 2015 and 2016, though it still sees one of the fewest numbers of listings and lowest inventories overall. The area also topped the other neighborhoods for highest median sales prices year-to-date at $540,000, up 1.8 percent. It also has the highest price per square foot at $418 year-to-date, up more than 13 percent.
Despite the growth, one area of concern is affordability for young potential buyers shopping for a first home who face rising rents thanks to a robust rental market. A fall forecast report from Colliers International Minneapolis-St. Paul predicts rents will continue to rise and vacancy rates will drop this season.
“We’ve got to bridge that gap so first-time buyers can get into the market from a new construction standpoint,” Grunnet said.
Challenges aside, Scott Parkin of Verve Realty said he sees millennials joining the housing market.
“They want to buy. They see the value of ownership,” Parkin said. “It’s going to be a huge market. Everybody in real estate knows that’s a market you can’t ignore.”
For resources on getting into the condo market, Parkin said the Minneapolis Area Association of Realtors — where he is a board member — has monthly videos offering the “skinny” on the local, regional and national real estate market that are published to its website and YouTube channel. Grunnet also offers condo buying 101 seminars for groups or individuals.
The city’s newest condo building
Jim Stanton of Shamrock Companies opened his ninth condo project in September and is already at work on his tenth.
The developer’s 17-story Portland Tower, located a few blocks from U.S. Bank Stadium in the Elliot Park neighborhood, adds 112 units to a market that hasn’t seen an influx of new construction, and demand as been high. Colleen LaBeau of ReMax Advantage Plus said they sold about 50 percent of the units before they even had models to show.
“A lot of people like the proximity, that you’re so close to the skyway, so close to Nicollet Mall. They like the new activity coming. The Commons park has been a plus. Some people like being close to the stadium. There are a lot of people who like that [Hennepin County Medical Center] is very close. And the fact there’s some new restaurants coming to the area, including a brewery across the street,” LaBeau said.
The building’s units average about 1,350-1,400 square feet and include one stall of heated parking. Residents also have access to a fitness studio, a community room with a catering kitchen and a sixth-floor patio with fire pits and a grill. The units themselves also have higher-end finishes, stainless steel appliances and hardwood floors.
“Our standards are a lot of other people’s upgrades,” LaBeau said.
Across East Town, Stanton is proposing to build a whopping 374-unit condo building on the far eastern edge of downtown. The building, dubbed Legacy, is slated to rise around 17 stories at the corner of 2nd Street and 13th Avenue near the Mill District where a surface parking lot and the vacant Cenveo Building once were.
On the other side of the river, another large condo project will soon take shape.
Alatus, the developer behind the 39-story Carlyle tower, is looking to build a 42-story condo tower with 214 units in the place of a Washburn-McReavy funeral home and the St. Anthony Commercial Club just across the river from downtown Minneapolis. The building could open as soon as early 2018.