The 2012 Q1 Twin Cities Rental Revue just came out and there are some market changes worth noting. Apartment rents continue to increase as one bedrooms rose to $750, marking a 9% jump since Q2 of 2011. Two bedroom apartments increased to $925 and were also up 9% since 2011 Q2. Overall there were 700 more apartment units available to rent in Q1 compared to the previous quarter. This is likely a seasonal impact, as there were 800 fewer openings in Q1 compared to 2011 Q3.
The Shadow Market is compelling right now. Rents were either down or flat across the board in Q1 of 2012 compared to the previous quarter. Most interesting is that there were 1,800 fewer units available compared to Q4 and 3,100 fewer than Q3. Also, for the first time since we started tracking this data we saw the Shadow Market compose fewer than 60% of openings listed. In Q1 Shadow Market units made up 57% of all open listings. It is still significant but trending downward...for now.
Check out this article in the Huffington Post: Turning Foreclosed Homes Into Rentals Could be $100 Billion Industry This Year
Bank of America is running a pilot program called Mortgage to Lease to rent homes to families that have been foreclosed on. Bank of America also recently announced a bulk offering of 500 foreclosed homes in six different states (none in Minnesota). In addition, private equity firms and hedge funds are spending hundreds of millions of investment dollars to buy up foreclosed properties. Don't forget about Fannie Mae and Freddie Mac! They recently put up 2,500 of the 200,000 foreclosed homes it currently owns for sale.
It is hard to tell when this activity will hit the Twin Cities, but it seems inevitable. We will continue to track the trends in Twin Cities Rental Revue and keep you posted.