New Subdivisions in the Midwest?

Posted in Chicago Market, Indianapolis Market, Twin Cities Market | Posted on 09-25-2014 | Written by Chris Huecksteadt

 

chris h for newsletter onlyA sure sign of a recovering housing market?  How about new lot development occurring for the first time in several years!  Surveying the Chicago, Indianapolis, and Minneapolis/St. Paul markets Metrostudy has noticed that new subdivisions are beginning to come through the pipeline.  Not a re-hashing of existing communities or a re-configuring of existing developments, but new land, being newly developed.  In 2010, in the Chicago market, there were a total of 383 new lots delivered.  Three HUNDRED and eighty three!!!  There are nearly ten million people living in this market and Chicago could only muster a few hundred new home sites during a 12-month period, a mere 30 new lots coming on line per month.  Through the first six months of 2014, there were a total of nearly 1,500 new lots delivered.  Not only that, but we are beginning to see proposals for new subdivisions that didn’t exist just a few years ago.  That may not seem like much in some markets, but here in the midwest, developers have been in hibernation for the better part of the past five years.  Development activity has not been as scarce in Indianapolis and the Twin Cities as it has been in Chicago, but nearly so.  In the Twin Cities, for example, a total of 964 new lots were delivered in 2010.  In 2013, there were 3,683 new lot deliveries.  Indianapolis has seen a total of 1,400 new lots delivered in the first six months of 2014, compared to just 650 through the first half of 2010.  As midwest markets have slowly recovered, builders and developers have recognized the need for fresh lot inventory.  Quality A and B lots are nearing critical levels of remaining inventory, fewer than 18 months of supply in all three markets.  Given the length of time necessary to bring new lots to the market, developers have been very busy over the past twelve-months in an attempt to keep the housing industry supplied with lots in the most desirable locations.  Look for continued new lot development activity in these markets for the next few years as we play catch-up in order to resupply these markets.

chris h

 

 

 

Twin Cities 2Q14 Housing Survey: Despite Pullback, Market Showing Consistent Growth

Posted in Twin Cities Market | Posted on 09-02-2014 | Written by Metrostudy News

  • The recent increase in new home demand has created a run on desirable vacant developed lots located throughout the metro; 2Q14 saw the lowest lot supply number since early 2007.
  • Almost 50% of all new homes started over the last 12 months were priced between $250k and $400k, the largest percentage of starts in that segment since Metrostudy began tracking the market;
  • While over 80% of the new starts are for single family homes, we expect that price and location pressures will drive consumers into townhomes and attached product lines.

September 2014: Metrostudy’s 2Q14 survey of the Minneapolis/St. Paul housing market showed slowing growth, as the market has been hit with multiple forces that have impacted new home construction.  Our survey showed 1,494 starts in 2Q14, up 35.6% from 1Q14 but down 10.4%from 2Q13.  The increase in activity is normal through the first two quarters as new home builds are generally either pulled forward into 4th quarter or pushed ahead to 2nd quarter. This winter’s brutal conditions impacted our starts numbers by approximately 10% in the 1st quarter so while there was an increase we expected to see a slightly larger jump in new home starts given the harsh winter.

The rate of annual new home starts for single-family and townhome units across the Twin Cities area was 5,765, up 5.3% over 2013 but a sizable drop off from the last couple quarters. The new home market is still continuing to show fairly consistent growth even with the recent pull back. Lingering impacts of the weak economy, flat wages and affordability concerns will constrain buyers.

“The increased demand for new homes has been facilitated by continued strength in the local resale market,” said Chris Huecksteadt, Regional Director of Metrostudy’s Minneapolis/St. Paul region.  “However, the significantly low level of existing homes on the market is causing some unanticipated inventory problems. Increasing home prices, low inventory and decreasing affordability has quelled momentum throughout the existing housing market causing some buyers to remain on the sidelines. The resale market will play a critical role throughout this year and could significantly impact new home sales.”

The majority of new activity remains strong throughout our top tier market areas, with the top 20 submarkets representing almost 60% of new home starts over the past 12 months. However, as lots prove scarce and increasingly costly throughout the “A” & “B” market activity is picking up throughout Otsego, Rogers, Savage, Chaska, Farmington, Waconia, Ramsey and Hudson as builders expand their footprint across the metro.

At the end of March 2014 there were 2,769 new housing units in inventory, up 136 from last quarter. Of that total, 2,035 units (73%) are under construction, 486 (17%) are finished vacant inventory and 248 (10%) are model homes. Housing supply fell compared to last year remaining very healthy at 5.9 months. Increased closings over the past twelve months helped push down our year end supplies to slightly below equilibrium levels of 6-7 months. Low housing inventory or more specifically low finished vacant inventory is one of the best indicators of the health of a housing market. Finished inventory months of supply sits at slightly above one month, which is actually below equilibrium, considered to be between 1.5-2.0 months. There are currently 20,690 vacant developed lots throughout the Twin Cities, a decline of 7.9% compared to last year.

“2Q14 represents the lowest lot supply we have seen since early 2007,” said Huecksteadt. “The recent increase in new home demand has created a run on desirable vacant developed lots throughout the metro region. Lot supplies across the seven county metro area are down to just 25.6 months, below pre-housing boom figures. As activity continues to increase we will need to see substantial lot deliveries across the metro in order to meet current demand.”

Lot pricing and availability is a concern throughout the top tier markets as land prices are quickly rising to pre-housing boom levels. New activity will continue to push outward in 2014 into our second and third tier market areas as land prices continue to rise.  Lot supplies still remain tightest in the $350,000 to $399,999 price segment as move-up buyers take advantage of low prices, strong inventory and low rates.

“Almost 50% of all new homes started over the last 12 months were priced between $250,000 and $400,000, representing the largest percentage of starts in that segment since Metrostudy began tracking the market,” said Huecksteadt. “Shifts in product size, style and needs have re-defined the new home market across the Twin Cities marking a return to a more balanced marketplace. Single-family homes continue to account for the majority of new home activity throughout the metro area, representing over 80% of all starts. However, townhomes and attached product should start grabbing market share, as location and prices remain challenging for single family development.”

The Twin Cities economy will likely continue to outperform the national economy, with unemployment remaining well below national levels, and net new job growth continuing to be positive.  Even as the market has slowed through the first six months of this year, healthy levels of price increases have occurred. The median sales price of an existing home is up 8.1% compared to last year, while the average sales price of a new home increased by 9.2%. The market has slowed, but it is in a much healthier condition today than during previous slowdowns in the market; new and existing home inventories are low and demand, relative to the levels of inventory in the market, is still high. Even with the slight decline in demand experienced over the first six months, there is still money to be made in the new home market in the Twin Cities.

For information contact Chris Huecksteadt @ 847-651-9080
email chueck@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Good Times Bad Times

Posted in Twin Cities Market | Posted on 07-08-2014 | Written by Ryan Jones

ryan jFor those of you out there who are fans of Led Zeppelin…  “In the days of my youth, I was told what it means to be a man, now I’ve reached that age, I’ve tried to do all those things the best I can. No matter how I try, I find my way into the same old jam.”

Good times bad times; I’ve used this phrase many times over the past six months to characterize the housing market.  The lyrics above are from the opening track on Led Zeppelin’s 1969 debut album, introducing the world to the greatest rock band ever.  This also happened to be the song I first heard this morning while getting ready to write this article. So there is the true tie in, which is in addition to the obvious tie in from the title of the track, which characterizes the housing market today.  Which could also characterize quite a few things out there… (Economy, Weather, Minnesota Sports, Politics) Ok, politics might be a stretch. Read the rest of this entry »

Minneapolis Housing Market Metrostudy 1Q14 Survey Results: Despite Harsh Winter, Housing Market Growing: Single-Family Development Faces Challenges

Posted in Twin Cities Market | Posted on 05-14-2014 | Written by Metrostudy News

May 14, 2014: The first three months of the year were pretty disappointing for new homebuilders, new homebuyers and frankly just about everyone across the Twin Cities. The brutal winter took its toll on all of us. The “polar vortex” couldn’t have come at a worse time, as momentum was building and confidence was improving. While the region’s woes can’t be tied to just cold weather, stress from higher land and home prices and a wavering “recovery” in the economy impacted home sales more than expected.

According to Metrostudy’s quarterly survey, 1,114 new homes were started in the 1st quarter, down 18.5% from 4Q13, and unchanged from 1Q13. The drop-off in activity is normal through the 1st quarter as new home builds are generally either pulled forward into 4th quarter or pushed ahead to 2nd quarter. We estimate that this winter’s brutal conditions impacted starts numbers by approximately 10%. The rate of annual new home starts for single-family and townhome units across the Twin Cities area is 5,980 new units. This is an increase of 16.2% compared to 2013 and the highest annual starts pace since 2008.

“Shifts in product size, style and needs have re-defined the new home market across the Twin Cities marking a return to a more balanced marketplace,” said Ryan Jones, Director of Metrostudy’s Twin Cities market. “Single- family homes continue to account for the majority of new home activity throughout the metro area, representing over 80% of all starts. However, townhomes and attached product should start grabbing market share, as location and prices remain challenging for single family development.”

Lot supplies still remain tightest in the $300,000 to $350,000 price segment as first-time and move-up buyers take advantage of low prices, strong inventory and low rates. Almost 50% of all new homes started over the last 12 months were priced between $250,000 and $400,000, representing the largest percentage of starts in that segment since Metrostudy began tracking the market.

Although Metrostudy is forecasting a much stronger 2nd and 3rd quarter, year over year could represent only a modest increase from 2013. While the numbers might not be as robust as we would like, the new home market is very healthy and builders should be focusing on balanced communities, with greater product offerings to meet demand across all buyer segments. The first-time and first-time move up buyer stands to gain the largest percentage of market share assuming builders are able to deliver product that meet demand. New lot deliveries will increase precipitously in 2014 and 2015 as builders and developers adjust to the new market conditions.

“The new home market is continuing to show consistent growth with annual increases in new home demand occurring in each of the last two years,” said Jones. “However, there appears to be a little adjustment compared to the growth we experienced in 2013, and while several factors are likely to blame, 2014 could see more modest sales pace. Lingering impacts of the weak economy, flat wages and affordability concerns will constrain buyers. Additionally, continued labor, materials and lot shortages will put pressure on new home builders’ already tight bottom lines – pushing new home prices up at time when confidence is shaky.”

As we thankfully head into spring with warmer weather, brighter skies and improved confidence, an uptick in sales is anticipated. Builders are gearing up with new communities and new products which should keep pace at or above last year. Strong fundamentals across the Twin Cities area will likely continue helping drive new construction.

For information contact: ryan jones @ 952.426.0754
Email ryanj@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide. Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. www.metrostudy.com

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Twin Cities New Home Growth Showing Signs of Slowing as Affordability Weakens

Posted in Twin Cities Market | Posted on 01-29-2014 | Written by Metrostudy News

(Minneapolis, MN – January 29, 2014) Strong fundamentals across the Twin Cities area have pushed new home construction up 31% over 2012. 2013 finished up the year strong with builders pushing out new homes at a very healthy clip. This is according, to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

According to Metrostudy’s quarterly survey, 1,387 new homes were started in the 4th quarter, down -25.6% from last quarter, but up +7.4% from 4Q12 when 1,292 homes were started. “The drop-off in activity is normal for the 4th quarter as the school year begins and temperatures plummet. While typical, the pullback is slightly lower than we were expecting raising concerns regarding the impact the economy, price increases and rate increases are having on the market,” said Ryan Jones, director of Metrostudy’s Twin Cities Market.

“The majority of new activity remains strong throughout those top tier market areas, with the top 20 submarkets experiencing a 24% jump in starts compared with 2012. However, as lots prove scarce and increasingly costly throughout the “A” & “B” markets activity is picking up throughout Otsego, Rogers, Savage, Chaska, Farmington, Waconia, Ramsey and Hudson as builders expand their footprint across the metro,” said Jones.

At the end of December 2013 there were 2,596 new housing units in inventory, down 154 from last quarter. Of that total, 1,969 units (76%) are under construction, 419 (16%) are finished vacant inventory and 208 (8%) are model homes. Housing supply fell compared to last year remaining very healthy at 5.5 months. Increased closings over the past twelve months helped push down our year end supplies to slightly below equilibrium. Equilibrium for housing inventory months of supply is between 6-7 months. Low housing inventory or more specifically low finished vacant inventory is one of the best indicators of the health of a housing market. These units which have been completed but remain vacant at the time of our survey currently sit at just 419 finished vacant units on the ground. Finished inventory months of supply sits at slightly below one month, which is actually below equilibrium, considered to be between 1.5-2.0 months. These numbers should come up a little over the next couple months as more housing units near completion and sales slow.

There are currently 22,274 vacant developed lots throughout the Twin Cities, representing a decline of 9.6% compared to last year. (10,900 vacant developed lots throughout the metro seven counties, a decline of 9.9% compared to last year). 4Q13 represents the lowest supply number since early 2007. The recent increase in new home demand has created a run on desirable vacant developed lots located throughout the metro. Lot supplies across the seven county metro area are down to just 26.9 months, down below pre-housing boom figures. As activity continues to increase we will need to see substantial lot deliveries across the metro in order to meet demand. “Lot pricing and availability is a concern throughout the top tier markets as land prices are quickly rising. Demand will continue to push outward in 2014 into our second and third tier market areas. Builders are increasing their land supply and should be able to capitalize on the growth that will occur in the coming years,” said Jones.

“The Twin Cities economy looks to remain strong and the new home market is positioned to grow right along with it. While our pace could slow a little in 2014 we expect continued growth in new home activity throughout the year. Price increases may need to be adjusted if the economy weakens or rates change dramatically. Proceed with caution this year as sales might not come as easy as 2013. Stay tuned,” said Jones.

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

The Twin Cities housing market continues to grow in the third quarter

Posted in Twin Cities Market | Posted on 10-30-2013 | Written by Metrostudy News

(Minneapolis, MN – October 30, 2013) Strong fundamentals across the Twin Cities area have pushed new home construction up another 40% over recent years. This is according, to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

According to Metrostudy’s quarterly survey, 1,875 new homes were started in 3Q13, up +10.8% from 2Q13, and +33.9% from 3Q12 when 1,400 homes were started. For the second straight quarter the Twin Cities housing market surpassed 1,500 new home starts for the quarter. “With winter quickly approaching housing production will continue to see solid growth over the next couple months, before pulling back come January,” said Ryan Jones, director of Metrostudy’s Twin Cities Market.

At the end of September 2013 there were 2,766 new housing units in inventory, up 234 from last quarter. Of that total, 2,085 units (75%) are under construction, 430 (15%) are finished vacant inventory and 251 (10%) are model homes. Housing supply fell compared to last year remaining very healthy at 6.1 months. Low housing inventory or more specifically low finished vacant inventory is one of the best indicators of the health of a housing market. These units which have been completed but remain vacant at the time of our survey currently sit at just 430 finished vacant units on the ground. Finished inventory months of supply sits at slightly below one month, which is actually below equilibrium, considered to be between 1.5-2.0 months. “These numbers should come up a little over the next couple months as more housing units near completion and demand remain strong,” said Jones.

There are currently 22,446 vacant developed lots throughout the Twin Cities, representing a decline of 12% compared to last year. (10,909 vacant developed lots throughout the metro seven counties, a decline of 18.1% compared to last year). 3Q13 represents the lowest supply number since early 2007. Lot supplies across

the seven county metro area are down to just 27.2 “As activity continues to increase we will need to see substantial lot deliveries across the metro in order to meet demand. Lot pricing and availability is a concern throughout the top tier markets as land prices are quickly rising,” said Jones.

“The Twin Cities economy looks to remain strong and the new home market is positioned to grow right along with it. We will likely end 2013 up right around 6,000 new home starts, 30% higher than 2012 and twice the amount from 2011. Stay tuned,” said Jones.

For information contact:
ryan jones @ 952.426.0754
email ryanj@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

The Twin Cities housing market maintains growth in the second quarter of 2013

Posted in Twin Cities Market | Posted on 07-17-2013 | Written by Metrostudy News

(Minneapolis, MN – July 17, 2013) The Twin Cities economy looks to be very strong and the new home market is positioned to grow right along with it. This is according, to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

The Twin Cities current employment estimates indicate that employers added approximately 49,500 new jobs to their payrolls over the past 12 months.  “Education and Health Care related firms remain one of the strongest and fastest growing employment sectors adding (+12,700) new jobs in the last year,” said Ryan Jones, director of Metrostudy’s Twin Cities division. The local unemployment rate continues to remain one of the lowest in the country, amongst major metropolitan areas, currently sitting at 4.7%.

According to Metrostudy’s quarterly survey, 1,730 new homes were started in 2Q13, up +54.3% from last quarter, and +46% from 2Q12 when 1,184 homes were started. “While the rate of growth in new construction over the past twelve months was likely being held back by the lingering impacts of the stagnant economy, the next twelve months will present new challenges as lot and labor shortages will likely constrain the new home construction market,” said Jones.

At the end of June 2013, there were 2,765 new housing units in inventory, up 13% from last quarter. Of that total, 2,139 units (77%) are under construction, 395 (14%) are finished vacant inventory and 231 (8%) are model homes. Housing supply fell compared to last year remaining very healthy at 6.7 months. Finished inventory months of supply sits at slightly below one month, which is actually below equilibrium, considered to be between 1.5-2.0 months. “These numbers should come up a little over the next couple months as more housing units near completion and demand will remain strong,” said Jones.

There are currently 22,882 vacant developed lots throughout the Twin Cities, representing a decline of 12% compared to last year. (10,812 vacant developed lots throughout the metro seven counties, a decline of 18.1% compared to last year). “Lot supplies across the seven county metro area are down to just 28.2 months, down below pre-housing boom figures. As activity continues to increase we will need to see substantial lot deliveries across the metro in order to meet demand,” said Jones.

“Those in the housing industry need to continue planning for the next 5 – 10 years so that the market can grow successfully from within.  We will likely end 2013 up over 6,000 new home starts, twice the amount from 2011. Challenges exist, but the Twin Cities trend will continue to remain positive,” said Jones.

For information contact:
ryan jones @ 952.426.0754
email ryanj@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com.

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

The Twin Cities housing market continues to grow in 2013

Posted in Twin Cities Market | Posted on 05-03-2013 | Written by Metrostudy News

(Minneapolis, MN – May 3, 2013) The last twelve months have been very positive for homebuilders and we anticipate seeing more of the same throughout 2013 and 2014, according, to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

The Twin Cities current employment estimates indicate that employers added approximately 42,800 new jobs to their payrolls over the past 12 months. “Education and Health Care related firms remain one of the strongest and fastest growing employment sectors adding (+17,900) new jobs in the last year,” said Ryan Jones, director of Metrostudy’s Twin Cities division The local unemployment rate continues to remain one of the lowest in the country, amongst major metropolitan areas, currently sitting at 5.5%.

According to Metrostudy’s quarterly survey, the Twin Cities area started 1,135 new homes in 1Q13, down 13% from 4Q12, but up +53% from 1Q12 when just 740 homes were started. “For the fourth straight quarter the Twin Cities housing market surpassed 1,000 new home starts for the quarter, “said Jones. The rate of annual new home starts for single-family and townhome units across the Twin Cities area is at 5,022 new units. This is an increase of 56% compared to 2012 and represents the highest annual starts pace since 2008. “The new home market is continuing to show consistent growth with annual increases in new home demand occurring in each of the last seven quarters,” said Jones.

At the end of March 2013 there were 2,461 new housing units in inventory, up 7% from last quarter. Of that total, 1,625 units (66%) are under construction, 547 (22%) are finished vacant inventory and 289 (12%) are model homes. Housing supply fell compared to last year remaining healthy at 6.5 MOS. “Increased closings over the past six months helped push down our year end supplies to right within equilibrium,” said Jones.  Equilibrium for housing inventory months of supply is between 6-7 MOS.

There are currently 24,559 vacant developed lots throughout the Twin Cities, representing a decline of 9% compared to last year. (12,052 vacant developed lots throughout the metro seven counties, a decline of 13.7% compared to last year). 1Q13 represents the lowest supply number since late 2007. The recent increase in new home demand has created a run on desirable vacant developed lots located throughout the metro. Lot supplies across the seven county metro area are down to just 33.4 MOS, down below pre housing boom figures. “As activity continues to increase we will need to see substantial lot deliveries across the metro in order to meet demand,” said Jones.

“While inventories remain tight, homebuilders will need to start looking to increase production in order to meet the growing demand. Look for the Twin Cities housing market to ramp up substantially over the next sixth months building up supplies of both housing and lot inventories. The market needs to stop worrying about next year and start planning for the next 5 – 10 years. The Twin Cities new home market is positioned to grow at a steady pace over the next twelve months baring any major setbacks. Early indications point towards continued improvement on home prices and demand. It would be surprising to not see home prices and starts up double digits in 2013. Stay Tuned,” said Jones.

For information contact:
ryan jones @ 952.426.0754
email: ryanj@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  http://www.metrostudy.com.

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

Weathering the Housing Market

Posted in Twin Cities Market | Posted on 04-22-2013 | Written by Ryan Jones

Today’s forecast in Minneapolis calls for a high of 35 degrees with a 90% chance of rain/sleet/snow/terribleness… oh and probably 4-6 inches of snow.  Last year at this time it was a sunny with a high of 62 degrees.

So you probably know where I’m going.  Using the weather to segue into how the housing market can be so different from one year to the next, how original… I hope to make up for my lack of originality by dazzling you with some amazing housing figures.

Across the Twin Cities new housing starts are up 56%. Impressed? We have built almost 2,000 more homes over the past twelve months versus the previous twelve months. Our annual rate toped 5,000 for the first time in over five years! While this is great news, the ups and downs over the past decade have weakened my ability to truly enjoy the ups, so I remain tempered with my excitement.

“Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it;” an instant classic written by John Hughes for Ferris Bueller.

The housing market is moving pretty fast right now and if we don’t stop and look around we could miss… or “mess” it up. See what I did there? Ok maybe a stretch, but I like the quote and I think it relates to the markets these days. Look at the multi-family market. Apartment development activity is at a 20-year high in the Twin Cities, with 1,100 units under construction today and another 4,885 units in the pipeline; that’s almost 6,000 new rental units that could be added to the market in a very short period. “Multi-family developers and experts don’t expect a bubble” Where have we heard this before? Do we tell them what happens when you overbuild?

At this time last year we had just wrapped up the worst year in new housing construction ever. Maybe not ever, but at least the last 50 years, and for me that seems like ever.  2011 ended with just 3,116 new homes built throughout the Twin Cities. Builders and developers were still trying to keep the lights on and the thought of developing new lots seemed ludicrous. Lot supplies were up over 100 months and builders wouldn’t take vacant developed lots if they were given to them for free. But what a difference a year makes.

As of 1Q13 vacant developed lot supplies have been cut in half compared to last year, and in some market areas there are fewer than 12 months of remaining inventory. Builders are raising prices in some developments to actually slow down sales, so they don’t run out of inventory before they can replace it. Slow down sales?!? Land and lot values have shot back up across the metro area and builders are overbidding to secure future positions. If we don’t stop and look around once in a while, we will mess this up.

We need to be cautious about pricing over the next couple years, because if we keep trending on this same pace, we will price buyers out of the market. If we price the very same buyers we need out of the market, what happens to the market? Today’s actions will impact tomorrow’s results.

The Twin Cities amongst Top 10 Increases in New Home Starts

Posted in Twin Cities Market | Posted on 02-04-2013 | Written by Metrostudy News

(Minneapolis, MN – February 4, 2013) Across the Twin Cities, new and existing home sales are at their highest levels in years. Home prices have stabilized throughout the Metro area, and several top sub-markets are experiencing 10% – 15% increases in home prices, according, to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

According to Metrostudy’s quarterly survey, the Twin Cities area started 1,344 new homes in 4Q12, up +57% from 4Q11, when just 855 homes were started. “For the third straight quarter the Twin Cities housing market surpassed 1,000 new home starts for the quarter. This also marks the largest 4th quarter starts figure since 2007, piggybacking on the previous two quarters strong starts figure,” said Ryan Jones, director of Metrostudy’s Twin Cities division.

The rate of annual new home starts for single-family and townhome units across the Twin Cities area is 4,706 new units. This is an increase of 47% compared to 2011 and represents the highest annual starts pace since 2008. The new home market is continuing to show consistent growth with annual increases in new home demand occurring in each of the last six quarters.

At the end of 2012 there were 2,309 new housing units in inventory, up 25% from 3Q12. Of that total, 1,675 units (72%) are under construction, 435 (19%) are finished vacant inventory and 199 (9%) are model homes. Housing supply fell compared to last year remaining very healthy at 6.5 MOS. Increased closings over the past six months helped push down our year end supplies to right within equilibrium. Equilibrium for housing inventory months of supply is between 6-7 months.

There are currently 25,268 vacant developed lots throughout the Twin Cities, representing a decline of 9% compared to last year. (12,614 vacant developed lots throughout the metro seven counties, a decline of 12.7% compared to last year). 4Q12 represents the lowest supply number since late 2007. “The recent uptick in new home demand has created a run on desirable vacant developed lots located throughout the metro,” said Jones.

For information contact:
ryan jones @ 952.426.0754
email: ryanj@metrostudy.com

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.