Minnesota has had plenty of experience with housing properties and their expenses. The residential property topic is hot right now as people have exclaimed worries about affordability and the in ability to keep up with rent.
Despite most of the homes in Minnesota not being high value homes, the prices are out of reach, especially for first time home buyers, resulting in the continual need to pay rent each month and more or less throw money down the drain.
As of February, it was recorded that median home prices reached a record-high of $246,000 a year, which is a $16,000 increase over the last record-high. This increase pushes houses even further out of reach for the middle class, and even more so out of reach for the lower financial families, perpetuating the crisis.
In a strive to go against our current cycle of housing problems since the great recession, Minneapolis Mayor Jacob Frey had detailed his plans to help boost the affordability of housing for Minnesotans and hopefully lower some numbers while increasing others. The Mayor's plans include increasing city development on vacant lots and the creation of an assistance program in relation to downpayments.
Our Current Problems
As of right now it is reported that 1 in 4 households in Minnesota consider the costs of their home a burden, which is a translation for households pay more than 30% of their income towards their housing. Along the same route, state senior's who are renting, also report a cost burden when it comes to their housing.
There has been a significant increase in rent demands between 2013 and 2017, showing a 20% increase on average, almost being a direct transition to the 30% cost burden of housing reported by Minnesotans. Currently there is a 2.3% vacancy rate in Twin Cities apartments, showing a concerning trend that people are attempting to settle in apartments because they cant afford their own home. Generally vacancy rates should be higher for apartments, to show a healthy transition into the housing market for the population.
If we take a look at the low-income data, we see that affordable housing is scarce. There are around 36 units available for every 100 extremely low-income families, resulting in many families having nowhere to go or call their own.
As of right now, there has not been any mention of how the Mayor would fund such housing changes, but this is definitely something to keep an ear open for to stay ahead of the curve in the residential market.
Kontor Realty Group
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