Minneapolis Apartment Demand Hits Decade High
Employment base recovery inspired a recent high in apartment demand in Minneapolis. Absorption spiked to over 4,000 units in 2nd quarter, specifically, taking the annual pace to 7,610 units. This was the market’s strongest annual demand tally in over a decade. The last time apartment demand in Minneapolis was so strong was back at the beginning of the last economic cycle in early 2011. This latest pace tracks notably ahead of the market’s five-year average, which was already running at an elevated clip at over 4,400 units, despite the setbacks seen in 2020’s 2nd and 3rd quarters, when the COVID-19 pandemic was holding demand down. Over 40% of the demand in Minneapolis over the past five years was seen in the urban core. Downtown Minneapolis/University and the adjoining submarkets of Uptown/St. Louis Park and North Minneapolis have also received the bulk of the market’s elevated completion volumes in recent years. Helping Minneapolis boost demand volumes in 2nd quarter 2021 was a return to a more stable job market. The employment base here climbed by 6% over the past year, though the job market is still 3.6% away from a full recovery back to pre-pandemic norms.