Despite the condo boom, the Downtown apartment market remained good for renters and a bit brighter for landlords headed into 2005.
The average monthly rent for a Downtown apartment was basically flat in 2004, according to a new report by the Residential Group of GVA Marquette Advisors, 333 S. 7th St.
For landlords, the apartment vacancy rate fell from 6.8 percent in December 2003 to 5 percent last year at the end of 2004.
Among the possible explanations: condo conversions that took apartment units off the market.
The average monthly rent for Downtown apartments actually ticked up slightly - $1,051 in 2004, compared to $1,040 in 2003. However, that figure was skewed by an outsized 24.3 percent hike for three-bedroom apartments, which are a tiny part of the Downtown market.
In other categories:
- Studio units; monthly rents went up 0.2 percent from December '03 to December '04, to $543. Counter to the general trend, the vacancy rate for studio units rose from 3.9 percent to 5.6 percent in the same period.
- One-bedroom units; monthly rents went down 0.9 percent, to $983. Vacancy rates fell from 6.5 percent to 5 percent.
- One-bedroom units with a den; monthly rents went up 7.4 percent, the biggest rise for any category other than three-bedroom units. The vacancy rate was cut in half, from 7 percent to 3.5 percent.
- Two-bedroom units; monthly rents went up 0.9 percent, and the vacancy rate was slashed from 10 percent to 4.5 percent.
- Two-bedroom units with a den; rents rose by a dollar, to $1,939 a month on average. Don't try to find one - the vacancy rate fell from 8.4 percent to zero.
Downtown remained among the most expensive rental markets in the Twin Cities last year. The average monthly rent in the metro region was $849 based on a survey of 1,144 complexes.
Other expensive markets that, like Downtown, had average monthly rents of at least $1,000 include Eden Prairie, Edina, Maple Grove, Osseo, Rogers, Minnetonka, West St. Paul and South St. Paul.
Downtown had a lower vacancy rate in 2004 than the metro region's average of 7.3 percent. Overall, vacancy rates in the Twin Cities have increased since 2001, when the vacancy rate was 4 percent.