Construction booming, but apartments hard to find

Listen Construction is booming but apartments hard to find 4min 30sec

From his office in downtown Minneapolis, Brent Wittenberg can see the region's apartment boom take shape just by looking out of his 13th floor window.

The Nic on Fifth, a 253-unit luxury apartment building a block away reportedly sold for more than $100 million last fall just after residents moved in an unheard of figure in Twin Cities residential real estate. Another luxury tower dubbed 4Marq is under construction on the same block.

Builders added 4,470 market-rate units in the Twin Cities in 2014 and Wittenberg expects another 3,500 to be move-in ready this year. Renters are signing leases as soon as the paint dries.

Still, all the construction has barely moved the needle on vacancy rates in the Twin Cities. They stood at 2.9 percent at year's end, up only slightly from a year prior. Over the same period, average monthly rent rose 4 percent and now tops $1,000.

As a result, anyone looking for an apartment in the Twin Cities likely will find fewer options and higher rents than they'd hoped. The metro area has one of the tightest rental housing markets in the nation.

When it comes to high-end apartments, Wittenberg can see a boom playing out in the data he keeps on his computer. Posh downtown apartments featuring dog runs, yoga studios, and concierge service may grab the most attention.

But rentals in all price ranges are in short supply across the Twin Cities, said Wittenberg, who tracks rental trends for the real estate consulting firm Marquette Advisors.

"I think that the demand fundamentals for apartments remain strong throughout the region," he said. "And we do not project a significant uptick in vacancy for the metro area as a whole."

Low vacancy rates and rising rents may be a landlord's dream, but they can be a nightmare for apartment seekers like Hilary Hannon, an attorney who has relocated twice in the last four years.

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Construction booming, but apartments hard to find