* Source: 2011 Housing Indicator Report, City of Duluth website (http://www.duluthmn.gov/community_development/document_library/documents/2011HousingIndicatorReport.pdf)
Put simply, the vacancy rate is the percentage of surveyed units that reported a vacancy. So what does this chart show us?
- That the vacancy rate has plummeted in the last couple of years, for many possible reasons.
- That it has actually increased slightly over the last year, but not enough to draw a conclusion that it is going to keep doing so.
- That the economic troubles have most likely influenced this, as the vacancy rate fluctuates wildly in these last few years, coinciding with the recent economic downturn.
Some might think having a low vacancy rate would be good, but that would be wrong. According to Suzanne Kelley, a planner with the city of Duluth, a 5-6 percent vacancy rate is optimal for the market. The rapid decrease means things are not very good.
"If there's not enough units to rent, the pricing goes up," said Suzanne.
Despite this, Suzanne believes the market is getting better.
*Source: 2011 Housing Indicator Report, City of Duluth Website (http://www.duluthmn.gov/community_development/document_library/documents/2011HousingIndicatorReport.pdf)
2008 Housing Indicator Report, City of Duluth Website (http://www.duluthmn.gov/community_development/document_library/docs/Housing%20Indicator%20Reports/2008%20Housing%20Indicator%20Report.pdf)
So now we see the rental prices for different sized units. What, then, does this chart show us?
- The average rental price increased about four years ago, then has been fairly stagnant with small increases and decreases here and there.
- Four bedroom units have become significantly more expensive on average than three bedroom units.
- The average price gap between one and two bedroom units has narrowed ever so slightly in the last couple of years.
- Nothing very significant has happened to average rental price since that increase four years ago, but with the vacancy rate plummeting that seems poised to change.
Like Suzanne Kelley said, when the vacancy rate drops, prices tend to go up. This is confirmed by Karen Olesen, a senior planner with the city of Duluth. She says that due to the vacancy rates, the general trend for rents is that they are increasing. She says that the decrease in vacancy is primarily due to homeowners going into foreclosure and then going into rental units instead of purchasing a new house.
*Source: 2011 Housing Indicator Report, City of Duluth Website (http://www.duluthmn.gov/community_development/document_library/documents/2011HousingIndicatorReport.pdf)
Here we see a bar graph of the student population count according to the three major colleges in the area: College of Saint Scholastica, Lake Superior College, and the University of Minnesota Duluth. What does this graph show us?
- The number of students remained fairly steady until the last couple of years, where it spiked.
- The period between the 2010-11 and 2011-12 school year demonstrated a nearly 3,000 population increase in the student body.
- 2009-10 was a low point in the average student population, being nearly 1,000 lower than every other year on the graph.
As the 2011 Housing Indicator Report says, the student population is an important demographic of Duluth. This is especially true in these last couple of years due to the drastic increase in student population. This increase will most likely cause an increased demand for rental units (due to more and more college students moving off campus), which will also likely cause a price increase because of the vacancy rate dropping.
Why is this not a bigger issue in the election?
If one looks around at data concerning the election, there is a surprising lack of information on the candidates policies and ideas regarding the housing market in general. So why is that?
Matt Traynor of CHUM (Churches United in Ministry) admits that it is a very large and complicated issue. He says that CHUM has seen record-breaking numbers of people in need of housing assistance, and that this is a big issue.
"I don't know why its not at the forefront of political issues," Traynor said.
Karen Olesen has a different theory.
"It's a complicated issue which it's difficult to have a sound bite about," said Olesen.
Olesen is not very favorable toward politicians when it comes to their treatment of the housing market issue. She says that the Democrats most likely do not want to spotlight the fact that some of the President's policies when it came to helping homeowners with foreclosures were not very effective. On the flip side, she bills Romney's plan to allow homeowners to just slide into foreclosure before building the market back up as somewhat "cold-hearted" to the people affected.
"I don't think they want to highlight that," said Olesen.
Olesen adds that foreclosure rates have gone down, and like others she believes that the housing market is starting to bounce back.
What happens now?
As the issue itself is quite complicated, the outcome is itself very hard to ascertain. The people interviewed for this feature seem to agree that the housing market is through the worst of it, but are still uncertain as to where things go from here. Prices may go up, but as new construction projects are initiated and more jobs are created, that may change very quickly. It is an uncertain issue, but a very important one to the people of Duluth, and in particular it is important for college students who are uncertain of what the future holds for them.
