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MINNEAPOLIS-The once tight Twin Cities rental market isn’t showing any signs of picking up as improvement as new luxury apartment buildings and real estate agents compete for Twin Cities-area renters.

The average vacancy rate in the Twin Cities area rose to 7% last quarter from 6.7% during the second quarter but up from 5.2% the same time a year ago, according to data released this week by locally based GVA Marquette Advisors.

“When job growth returns, we expect vacancy rates to decline rapidly for the affordable and workforce housing stock,” Brent Wittenberg, a VP of GVA Marquette Advisors, says.

In the poll of 1,238 properties with 125,094 units, the average monthly rent was up 0.6% to $845. Meanwhile, vacancy rates ranged from 1.6% in Vadnais Heights to more than 12% in Plymouth. Large markets like Minneapolis had a 5.8% vacancy, up from 4.2% a year ago, and St. Paul had a 6.5% vacancy, up from 3.5%.

The rental market has seen an increase in new apartment complex, particularly inventory, luxury apartments buildings with underground heated parking and other amenities. In the second quarter, apartment owners with high vacancy rates offered concessions and even lowered base rents to attract renters, says Wittenberg.

Last quarter, the average vacancy rate for luxury apartment sector show that units priced at $1,100 or higher had a vacancy rate of nearly 10% and those units priced at more than $1,500 last quarter had a vacancy rate of nearly 15%, according to the report.

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