Twin Cities sees one of the best Augusts for residential construction in the past five years.
Single-family home construction is booming at the Kingston Fields development in Cottage Grove. Over the summer months, Woodbury and Cottage Grove have held their spots on the list of top areas for single-family homebuilding. A look at where those new houses are going up (south part of Woodbury, north end of Cottage Grove) proves the cities are rapidly growing toward each other. That’s prompting both cities to consider how they can maintain their distinct community feel while also exploring partnerships like the one that created the HERO Center, which will open in October as a public safety training center for the two cities. Kingston Fields (neighborhood around 9030 67th St S.) Summer’s Landing (near the intersection of Hadley Avenue and 95th Street)
It was the most robust August in at least five years for Twin Cities homebuilders.
This month builders were issued 737 permits to build 1,410 units, according to Housing First Minnesota. That included 711 single-family homes, 10% more than last year at the same time.
"It's a good sign to see that builders are ending the summer strong," said John Rask, president of Housing First Minnesota, a trade group that represents metro-area builders.
The gain continues a string of annual increases, reversing course on what had been a particularly slow start to the year for area homebuilders. Construction of single-family homes is now 2% ahead of last year at this time as builders backfill a shortage of existing houses that are affordable to first-time buyers and downsizing baby boomers.
At the end of July, 10% fewer existing homes priced at less than $300,000 were on the market, according to a July sales report from the Minneapolis Area Realtors. At the current sales pace that meant there were only enough houses priced from $150,000 to $350,000 to last one to two months. The market is considered evenly balanced between buyers and sellers when there's a five-month supply.
"Housing inventory is still sitting well below what is necessary for a healthy housing market," said Rask in a statement. "We hope to see a continued increase in construction activity throughout the rest of the year."
So far this year Minneapolis has been the busiest city for housing construction with 2,890 permitted units, mostly rentals, followed by Minnetonka (756) and Lakeville (594).
During August, builders pulled only enough permits to build 699 apartments and other multifamily homes — about the same number as last year — even though there's a near-record number of market-rate apartments in the development pipeline. Those multifamily units represented 49% of all planned construction during the month.
Though apartments have made up the bulk of residential construction over the past several years, multifamily has been outpaced by single-family construction in recent months. July was the second-slowest month so far this year for multifamily permits.