John Rader's Community Partners manages rentals, condos, and townhouses. Earlier this year, Rader struggled to keep up with demand as vacancies were snapped up almost as soon as they were listed. Within recent weeks, though, Rader's noticed a lull in the action.
He's currently looking for a tenant for a one-bedroom condo on First Avenue South that rents for $1,050 per month.
"Months ago, it would be a few days to a couple of weeks to get a unit rented," Rader tells City Pages. "Now that might take an extra week. But it'll getting roaring again like it always does."
Rent prices in Minneapolis are experiencing a break, most likely a temporary one, in the bullish apartment market. According to the website Abodo's most recent national apartment rental report, rent prices for one-bedroom apartments in the City of Lakes dropped 3 percent in May, the 10th-steepest fall of any market in the country.
The median rent price for a one-bedroom pad in Minneapolis today hovers around $1,100.
Adobo's Sam Radbil says it's a combination of "seasonality" and economic forces that are conspiring to drop prices.
"In cities with a large number of colleges and universities, in which young people graduate from college or head home for the summer, more rentals have become available," he says. "Along with that, mortgage rates are continuing to fall and are at their lowest levels in three years. This is huge news for first-time buyers. These people are looking at the rental cost in comparison to the mortgage rates and making the decision to buy a home rather than rent. This leads to less demand and a decrease in rental price."
Rader of Community Partners gets that, but he's confident demand again will swell in the coming months.
"School leases that end around May 31 or June 1 does slow things down a bit," says Rader. "It'll stay kind of quiet maybe until July. But in this market there remains high demand for rentals, and I don't see that changing."