The good news for Twin Cities home buyers looking for new construction is that the number of permits issued last month was on the rise. The bad news, however—the number of available new construction homes throughout the area is still low.
According to new data from the Builders Association of the Twin Cities, 339 new permits were issued in February, which will combine to bring 717 residential units to the area, mostly consisting of single-family homes and luxury apartment residences.
Compared to this time last year, that’s actually a 93% increase in permits issued, and an 18% increase in the number of units being planned overall. And in case you were wondering, 54% of those planned 717 units are multifamily or attached units, while the remaining units are detached single-family homes.
Like many markets across the U.S., inventory shortage is certainly nothing new to the Twin Cities, at least over the last 12 to 18 months. At the end of January, only 8,212 homes were on the market according to the Minneapolis Area Association of Realtors, which represents a 25% drop compared to how many homes were on the market at the end of January 2016. Also noted is that at the current pace of home sales seen throughout the Twin Cities region, those listings would be gone after just 1.6 months.
A healthy market is considered to have around a 5 to 6 month supply.
So while new construction activity in and around Minneapolis seems to be on the rise, it’s safe to say that these new residential units really can’t get here fast enough.