The US Census Bureau updated the Building Permits for Minneapolis St Paul today up to October 2011. The Building Permits for Minneapolis/St Paul for 1-unit dwellings was up to 375 at of October 1, 2011. The overall permits including multi-unit dwellings was 603. This is reflecting the apartment boom we are experiencing locally. I have growing concern over the market absorption of the new apartment units going up, but have not done a market study to indicate there may be issues. Just a gut feeling at this point, I am more bullish on the opportunities in the single family housing as our inventory continues to drop.
Below is the chart showing the Privately Owned Housing Starts: 1-Unit Structures for Minneapolis-St. Paul-Bloomington, MN-WI in blue, and the New Private Housing Units Authorized By Building Permit for Minneapolis-St. Paul-Bloomington, MN-WI in Red.
Now let’s look back on historical perspective a bit. To get an idea of where we are really at, it appears that Case Shiller was right that we are “catfishing” on the bottom. With the drop in inventory approaching 20,000 homes for sale, we are getting closer to needing to add more supply, aka build more houses, aka getting people back to work, aka creating more demand for housing. I don’t get a sense that this will take off, but I think it will be a gradual improvement at a seemingly slow pace. With that in mind, it won’t take a whole lot to throw that all upside down again – referring to shadow inventory and the potential of a Euro collapse to shake our economy.
Just my opinion, and besides – if I could actually predict the future do you think I would be writing this?
- Minneapolis / St Paul Unemployment Rate down for September 2011 (craigkamman.com)
- Minneapolis/St Paul ranks as healthiest real estate market in the nation, 8% home price increase in 2012 (craigkamman.com)