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01-22-08 1B Market Study
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01-22-08 1B Market Study
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1/18/2008 11:19:37 AM
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1/18/2008 11:17:07 AM
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Market Study by Maxfield Research
General - Type
Agenda Item
Date
1/22/2008
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<br />RENTAL MARKET ANALYSIS <br /> <br />~ Builders state that the cost ofland rose along with housing prices are pricing rental prop- <br />erties out of the market. Land costs are expected to drop along with housing prices, con- <br />tinuing through 2008, which may make construction of rental housing more attractive to <br />builders once again. <br /> <br /> <br />Monthly Rent and Vacancy Trends <br /> <br />Average monthly rent and vacancy rate data from GV A Marquette Advisors, Apartment Trends, <br />is shown for communities in the Arden Hills Housing Market Area in Table 21. The data is <br />shown for the 3rd quarter 2007. The following are key points concerning the Market Area's ren- <br />tal market. <br /> <br />~ <br /> <br />The equilibrium vacancy rate for rental housing is considered to be 5%. This allows for <br />normal turnover and an adequate supply of alternatives for prospective renters. During <br />the 3rd quarter 2007, the apartment vacancy rate in the selected Market Area communities <br />ranged from nearly 5% percent in Fridley/Columbia Heights to 2% percent in Blaine. <br />The vacancy rate in the Twin Cities was 3.6%. In effect, the overall supply ofrental <br />housing in the Market Area is tightening again. <br /> <br />~ <br /> <br />The average monthly rents for one-bedroom units in the Market Area in 3rd Quarter 2007 <br />ranged from $790 in Falcon Heights/Lauderdale to $931 in St. Anthony. The North Cen- <br />tral Suburban Market Area rents averaged $821 per month. However, in newer rental <br />buildings that typically offer a host of amenities, rents averaged $1,252 per month. <br /> <br />~ <br /> <br />Average monthly rents for two-bedroom units ranged from $773 in Vadnais Heights to <br />$977 in St. Anthony and averaged $748 across the Market Area. <br /> <br />~ <br /> <br />For three-bedroom units, average monthly rents ranged from $909 in New Brighton to <br />$1,690 in St. Anthony, and averaged $929 across the Market Area. <br /> <br />~ <br /> <br />Average monthly rents increased slightly in all Market Area communities over the past <br />year, ranging from 5% in Roseville, to just less than 1% in Vadnais Heights. St. Anthony <br />was the only community where rents decreased (3.4%), but rents in that community were <br />significantly higher to begin with, largely due to the new amenity-laden Landings at Sil- <br />ver Lake Village development on the old Apache Plaza site (Table 24). The Metro Area <br />saw a 3% increase. Rents are expected to rise again next year. Fewer people will enter <br />the for-sale housing market due to credit tightening and continuing market adjustments. <br />Adding to demand is a lack of new multifamily rental. Rental projects were left behind <br />during the most recent boom market, which focused on for-sale condos, townhomes and <br />single-family homes. <br /> <br />51 <br /> <br />MAXFIELD RESEARCH INC. <br />
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