Residential construction met the dog days of August this year, showing lackluster performance in both single family and multi-family construction. Planned units were down over 50 percent from August 2013, bringing year-to-date totals at just 0.5 percent more than at the same time last year. While overall indicators have remained positive, actual permitting in 2014 has continued to underperform expectations.
According to data compiled by the Keystone Report for the Builders Association of the Twin Cities (BATC), there were 413 permits issued for a total of 532 units during four comparable weeks in the month of August, 2014. Year-to-date, there were 3,213 permits issued for a total of 6,117 units.
“It’s clear that multi-family construction has kept overall permit numbers somewhat volatile this year,” said Shawn Nelson, Builders Association of the Twin Cities 2014 president and president of New Spaces. “However single-family construction has continued to lag, currently at almost seven percent behind last year.”
“While there are signs of broader improvement in the economy, locally, underemployment and resultant lower wages keep buyers hesitant. Additionally, the local housing industry has real concerns about adding even more regulation, like the indoor home sprinkler mandate taking effect next January. With regulation already at about 30 percent of the cost of a new home, even more families are being priced out of the market,” Nelson said.
Minneapolis remained in the top spot for permit activity in August, permitting 83 units. Maple Grove ranked second with 40 units permitted, followed by Blaine with 32 units. Woodbury with 26 and Lakeville with 21 units completed the top five.