Minneapolis–St.Paul takes No. 1 spot for national multifamily index

Minneapolis–St.Paul climbed two spots to head Marcus & Millichap’s 2019 Multifamily Index report.

It is the only Midwest market to break into the top 20. San Diego also inched up two notches on solid rent growth to claim second place.

Neighboring Florida metros Orlando (#6) and Tampa–St. Petersburg (#12) registered the largest advances in this year’s NMI, leaping 11 and nine places, respectively.

As new households are formed this year, much of the rental demand will center on apartments that serve the traditional workforce: class B and C properties, according to the report.

New inventory largely caters to more affluent renters. As a result, class A vacancy is expected to rise to 5.8 percent, while class B apartment vacancy remains relatively stable at 4.7 percent. The most affordable segment of the market, class C apartments, faces strong demand, and vacancy for these rentals is expected to tighten to 3.9 percent, its lowest year-end level in 19 years.

While primary markets such as Boston, Los Angeles, the San Francisco Bay Area and New York City are expected to see the largest dollar rent increases, smaller metros are generating faster increases on a percentage basis. Metros across the Southeast and Midwest in particular are generating outsized employment growth and housing demand, according to the report.

You can find the full report here.