Minneapolis Real Estate Investment Forecast 2021


Note: Our market forecast includes data from Minneapolis as well as data from its surrounding areas, including Saint Paul and Bloomington.

Why Consider Minneapolis For Investing In Real Estate?

Located on both banks of the Mississippi, Minneapolis is the most populous city in the state of Minnesota. With its neighboring towns, Saint Paul and Bloomington, it constitutes a metropolitan statistical area of ​​over 4 million inhabitants.

As the largest of these three cities, Minneapolis is home to strong stages of music and performing arts. He is best known for his folk, funk and alternative rock and has launched the careers of many well-known artists including Bob Dylan, Prince and most recently Lizzo.

State of the market

In many ways, the Minneapolis real estate market is doing quite well. While the region is following some national trends, such as higher than usual unemployment and delinquency rates, many of these can be directly attributed to the pandemic and are now showing signs of recovery. In addition, many of the peak numbers in these indices were well below the national average.

However, in order to give you a clear idea of ​​what to expect from the property market in the Twin Cities, we have selected three major trends for you and have outlined them below.

Rentals are holding up

While many major cities have seen an increase in the number of vacant homes amid the pandemic, vacant homes have actually fallen in the Minneapolis area, down 0.4% year-over-year. In addition, rental rates have also increased over the past year, from an average of $ 1,522 to $ 1,538 last year.

Inventory is low, but increasing

Minneapolis currently has 1.3 months of total housing supply as of January 2021. While this is certainly a low number and has caused house prices to rise as a result, investors should be aware that this number is actually an improvement. It is up from a 0.9-month low in December 2020. In addition, the number of housing permits for single-family and multi-family properties has exceeded expectations in recent months, suggesting that the shortage of stocks are expected to decline in the near future.

Financial health indicators are better than average

It should be noted that while delinquencies peaked in Minneapolis during the pandemic, their peak of 5.4% was well below the national average of 7.7%. In addition, this number has been declining since July 2020. For its part, the delinquency rate is only 0.1%, which is lower than the national average of 0.3%.

Minneapolis Housing Demand Indicators

All data and graphics provided by Housing tides by EnergyLogic.

While unemployment is on the rise due to the pandemic, all other housing indicators show that the housing market in Minneapolis is holding up.

Although unemployment in Minneapolis has seen its ups and downs over the years, for the most part it remained fairly stable until March 2020, when the coronavirus pandemic struck. At that time, it increased until it peaked at 9.2% in May 2020. However, it should be noted that the high point in Minneapolis was actually much lower than the national average. by 13.3%.

Since then, it appears to be making a strong rally, which is good news for investors.

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