Would-be downtowners can find a new home through Explore Downtown Living
Jessica Milkes is on the front lines of a growing downtown housing market.
Milkes, a leasing manager at 222 Hennepin, the building that includes the downtown Whole Foods, is the co-chair of a taskforce that organizes Explore Downtown Living, an initiative from the Minneapolis Downtown Council to get people into residential units downtown and, ultimately, grow the city’s urban population.
Over the past two-and-a-half years, Milkes said the program has grown exponentially, with roughly 4,000 people — many of them from nearby suburbs — walking through participating properties about 16,000 times.
“They want to get out of their suburban home and live the downtown lifestyle,” she said.
The Parade of Homes-style program, a one-day affair held twice each year, has attracted would-be downtowners while the area faces a tight housing market.
The Exploring Downtown Living event on Sept. 23 will feature 23 properties, including three newly opened buildings: Encore in the Mill District, Maverick in the North Loop and 7West in Cedar-Riverside.
Most of the housing is new and high-end because that’s where vacancies are. Even with an average downtown rent around $2,000 a month in these properties, she said, vacancy rates are at about 5–6 percent. The Minneapolis and St. Paul rental market is one of the tightest in the country, according to the latest index from the University of St. Thomas’ Shenehon Center for Real Estate.
Though these properties are competing for residents, Milkes said Explore Downtown Living is really about selling lifestyles. The program splits the market into five areas — the North Loop, the Central Business District, East Town, Loring Park and Northeast — that all have something unique to offer potential residents, whether that’s “garden-style living” near Loring Park or a “lumbersexual” lifestyle in the North Loop. It’s all about how people feel when they walk in the door, she added.
“We really try hard to reiterate that it’s not a competition [and] that we’re all in it together,” Milkes said. “At the end of the day, people are living in the North Loop.”
To further welcome would-be residents into downtown, Explore Downtown Living works with local vendors to get them discounts at local restaurants and fitness studios to give them a taste of the lifestyle.
“[Explore Downtown Living is] such an easy way to see as many properties and neighborhoods as you’d like, and the partner offers from different businesses make it a fun excursion through the city,” said Steve Cramer, president and CEO of the Downtown Council, in a statement.
The program is part of the council’s effort to double downtown’s residential population by 2025.
The work is well underway. Between 2006 and 2016, more than 9,000 people have moved to downtown, a population increase of 28.4 percent. The Downtown Council measures downtown’s current population at nearly 41,000.
Even if Explore Downtown Living doesn’t win suburbanites over immediately, Milkes said they draw people who are curious about downtown who may now consider it a possibility.
“It’s not about the immediate result. It’s about word of mouth,” she said.
Next year’s participants will have more to choose from. Milkes said next spring’s Explore Downtown Living event will feature close to 30 properties.
Tight market continues to loom over downtown
Following nationwide trends, the downtown real estate is continues to be a seller’s market with homes selling in about two months or less across the city’s central neighborhoods.
This year, thanks to nice spring weather, the real estate market came out of the gates earlier than usual, said Joe Grunnet, founder of North Loop-based real estate company Downtown Resource Group. By early July, he said the market had slowed.
“The spring market was the time this year. We’re coaching our clients to be prepared for the seasonality of it,” he said.
Despite a dropping supply over the years, downtown neighborhoods have recently seen greater inventory and new listings, which are up 16.8 percent and 30.7 percent, respectively, compared to last August, according to the most recent update from the Minneapolis Area Association of Realtors. This was the most apparent in the quickly growing Downtown East, which saw a 200-percent jump in new listings between this year and last year. An increase of closed sales followed, with 30 percent more year-to-date.
Prices remain strong overall with median sales price up 5.5 percent across the Twin Cities region, with the largest price gain in condos, according to MAAR. The median sales price for homes in Downtown East, Downtown West, Elliot Park, Loring Park, North Loop and Stevens Square-Loring Heights is up more than 9 percent year-to-date.
Demand continues for downtown in part because the area is becoming more livable and vibrant, Grunnet said. More restaurants, retailers and healthcare services are coming to corners of downtown.
“All those things make the fabric of the neighborhood,” Grunnet said.
Despite new inventory, Grunnet said challenges remain for lower-income buyers and renters who can’t find affordable options. With more restaurants have come more bartenders and managers who don’t make enough to live close to where they work. Grunnet said he’s working with developers to build new product that fills the void in the market.
“That’s going to be the future,” he said. “[Affordability] is on the developers’ minds.”
Grunnet said he sees challenges for young buyers who are uninformed about the market and what it takes to purchase a home.
“Young buyers aren’t taking the time to learn about the buying process,” he said.
The first step, he said, is to sit down with a real estate professional. For more market information, MAAR creates monthly video updates at mplsrealtor.com.