Residential Construction in Twin Cities Continues to Rise

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July proved to be another very strong month for residential construction permits in the region. Units permitted in July, 2012, were up by more than 110 percent over July of 2011, and year-to-date, units were up 72 percent over last year. A large project in Ramsey (230 units) and another in St. Louis Park (122 units over four permits) pushed up total units for the month, however single-family activity continued strong, with an almost 60 percent increase this July over July 2011.

According to statistics compiled by the Keystone Report for the Builders Association of the Twin Cities (BATC), there were 403 permits for a total of 783 units during four weeks in the month of July, 2012. Year-to-date, there were 2,239 permits issued for a total of 3,953 units.

“The market continues to strengthen,” said Builders Association of the Twin Cities 2012 President and owner of Lee Lyn Construction, Curt Christensen. “Nationally, the latest Case Shiller index reported a price increase of 1.3 percent in April, returning to positive territory for the first time in seven months. At the same time mortgage rates have dropped to an all time low and locally, we’ve seen several months of positive sales reports from the Minneapolis Area Association of Realtors.”

“These all contribute to a growing optimism in the industry,” Christensen said. “However with regulatory costs reaching 25 percent of a home’s sales price, builders and developers remain cautious about their ability to offer affordable, competitive homes to the market.”

Ramsey led the metro area in building activity for the month with 231 units permitted. St. Louis Park followed with 123 units. The same cities held the third through fifth place rankings for the month, with Blaine at 35 units permitted, followed by Woodbury with 34 units and Plymouth with 30 units.

July 2012 Permit Data (PDF)