It's Drew Palmer's world. Others just get to pay rent in it.
Palmer owns duplexes and triplexes in St. Paul and Minneapolis. He bought his first investment property in 2002. Back then, Palmer's rented his two-bedroom apartments on both sides of the river for around $800 per month. Today, those same units go for about $1,500, which could be argued to be on the mid- to lower-end for well-maintained places in desirable neighborhoods.
"I charge based on what the market dictates," he says. "The biggest thing determining that is supply and demand. And from what I see, that demand, with millennials -- who are either too far in debt to buy a house or aren't interested in home ownership -- along with the pool of professionals, isn't going anywhere."
Palmer's experience reinforces what thousands of apartment dwellers live month-to-month: Finding a deal anywhere in the metro area has become near mission impossible.
A new study shows just how pervasive the bullish market has become. Apartment List mined data from thousands of listings for one- and two-bedroom apartments in the Twin Cities. What it found is there are only two cities, Savage and New Brighton, where the median monthly rent for two-bedrooms is less than $1,000.
According to Apartment List's latest report, it doesn't matter if the apartment has a zip code in Woodbury, Bloomington, Chaska, or Blaine. Two-bedrooms average around $1,300.
The median rent for the same units in Minneapolis is $1,600, making it the second most expensive market in the Twin Cities region. Minnetonka claimed the top spot for two-bedrooms: more than $1,700. Menawhile, western suburbs like Plymouth, St. Louis Park, and Edina all command two-bedroom rents averaging about $1,500 per month.
The sticker shock for one-bedrooms is even more disheartening. Only St. Paul and Burnsville had medians below $1,000. Odd enough, it's in Burnsville where Apartment List found the fastest-growing rents in the metro over the past year: 6.5 percent. As of this month, two-bedrooms in the southern suburb average $1,220. The median rent for one-bedrooms is $980.
Lisa Horn, executive director of Volunteers Enlisted to Assist People, sees how rent prices are impacting working families in the southwest metro. The social service agency coverage area spans three suburbs, Richfield, Edina, and Bloomington, and south Minneapolis.
One of the biggest reasons people contact Volunteers Enlisted is because of "housing instability," according to Horn. They need help paying rent.
"Eighty-one percent of the households that are served by VEAP live on less than $1,600 per month," she says. "They're people who have families. They're working one, often two jobs. They're disabled or on fixed incomes. In any case, they live, walking along this line where they can barely afford their rent as it is, let alone if they're sick from work or have car trouble or the weather has meant their utilities are higher than normal."
According to Horn, rent consumes about two-thirds of Volunteer Enlisted's clients monthly income.
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