01-22-08 1B Market Study - Laserfiche WebLink

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RENTAL MARKET ANALYSIS ~ Builders state that the cost ofland rose along with housing prices are pricing rental prop- erties out of the market. Land costs are expected to drop along with housing prices, con- tinuing through 2008, which may make construction of rental housing more attractive to builders once again. Monthly Rent and Vacancy Trends Average monthly rent and vacancy rate data from GV A Marquette Advisors, Apartment Trends, is shown for communities in the Arden Hills Housing Market Area in Table 21. The data is shown for the 3rd quarter 2007. The following are key points concerning the Market Area's ren- tal market. ~ The equilibrium vacancy rate for rental housing is considered to be 5%. This allows for normal turnover and an adequate supply of alternatives for prospective renters. During the 3rd quarter 2007, the apartment vacancy rate in the selected Market Area communities ranged from nearly 5% percent in Fridley/Columbia Heights to 2% percent in Blaine. The vacancy rate in the Twin Cities was 3.6%. In effect, the overall supply ofrental housing in the Market Area is tightening again. ~ The average monthly rents for one-bedroom units in the Market Area in 3rd Quarter 2007 ranged from $790 in Falcon Heights/Lauderdale to $931 in St. Anthony. The North Cen- tral Suburban Market Area rents averaged $821 per month. However, in newer rental buildings that typically offer a host of amenities, rents averaged $1,252 per month. ~ Average monthly rents for two-bedroom units ranged from $773 in Vadnais Heights to $977 in St. Anthony and averaged $748 across the Market Area. ~ For three-bedroom units, average monthly rents ranged from $909 in New Brighton to $1,690 in St. Anthony, and averaged $929 across the Market Area. ~ Average monthly rents increased slightly in all Market Area communities over the past year, ranging from 5% in Roseville, to just less than 1% in Vadnais Heights. St. Anthony was the only community where rents decreased (3.4%), but rents in that community were significantly higher to begin with, largely due to the new amenity-laden Landings at Sil- ver Lake Village development on the old Apache Plaza site (Table 24). The Metro Area saw a 3% increase. Rents are expected to rise again next year. Fewer people will enter the for-sale housing market due to credit tightening and continuing market adjustments. Adding to demand is a lack of new multifamily rental. Rental projects were left behind during the most recent boom market, which focused on for-sale condos, townhomes and single-family homes. 51 MAXFIELD RESEARCH INC.