While the Minneapolis apartment market has been characterized by strong occupancy throughout most of the economic cycle, increasing completion volumes and slowing job growth knocked down the market’s occupancy in recent months. Occupancy in Minneapolis dropped 50 basis points (bps) year-over-year as of January 2020, witnessing the worst performance among the nation’s largest 50 markets. Only six other top 50 markets recorded annual downturns, but the backtracking was milder in those. Providence and Salt Lake City posted a 20-bps occupancy decline, while Sacramento, Orlando, Los Angeles and Las Vegas saw occupancy ease by 10 bps. To demonstrate how drastic the Minneapolis setback was, two other Midwest markets were nationwide leaders for occupancy growth in the past year. St. Louis posted an annual increase of 140 bps, while Cleveland saw occupancy climb 110 bps. These two markets have not seen the big supply volumes, or the recent economic slump Minneapolis has endured. January occupancy in Minneapolis was still solid at 96.2%, while Cleveland was close behind at 96.1%. St. Louis, however, is still showing occupancy below the national average at 95.3%, despite recent gains.
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