COMPREHENSIVE HOUSING MARKET ANALYSIS Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin
U.S. Department of Housing and Urban Development Office of Policy Development and Research As of January 1, 2014
Housing Market Area Mille Lacs Morrison Minnesota Pine Kanabec Burnett Wisconsin The Minneapolis-St. Paul-Bloomington Housing Market Benton Area (hereafter, Minneapolis HMA), with a population of Isanti 3.4 million, includes 13 counties in Minnesota and Wis- Stearns Sherburne Chisago Polk consin and is coterminous with the Minneapolis-St. Paul-
Barron Anoka Bloomington, MN-WI Metropolitan Statistical Area. For Wright purposes of this report, the HMA is divided into three sub - Meeker Ramsey St. Croix
Hennepin markets: the Central submarket, which includes Hennepin Dunn
McLeod Washington Carver and Ramsey Counties in Minnesota; the Southern submar- Pierce Scott Dakota ket, which includes Carver, Dakota, Scott, and Washington Sibley Pepin Counties in Minnesota; and the Northern submarket, which Goodhue Le Sueur Nicollet Rice Wabasha includes five remaining counties in Minnesota (Anoka, Chisago, Isanti, Sherburne, and Wright) and two in Wis- consin (Pierce and St. Croix). Summary
Economy at the end of this report provide Rental Market economic and population data for The economy of the Minneapolis The rental housing market in the the HMA and each submarket. HMA expanded after emerging from HMA is balanced, with an estimated the local economic downturn in 2010. Sales Market vacancy rate of 5.5 percent, down During 2013, nonfarm payrolls in- from 7.6 percent in 2010. Single- creased by 32,900 jobs, or 1.9 percent. The sales housing market in the HMA family homes shifting to rental The HMA is home to 19 Fortune is slightly tight, with an overall esti- tenure during the past 3 years have 500 companies. The state capital in mated vacancy rate of 1.3 percent, been largely absorbed by an increas- St. Paul and the University of Min- down from 1.9 percent in 2010. Dur- ing number of renter households in nesota help provide stability to the ing 2013, new and existing home the HMA. The apartment market in economy. During the next 3 years, sales increased 18 percent, to 54,400 the HMA is tight, with a vacancy nonfarm payrolls are expected to homes, at an average price of $240,700, rate of 3.2 percent in the fourth increase an average of 1.3 percent a 9-percent increase from the average quarter of 2013 (MPF Research). annually. Tables DP-1 through DP-4 sales price reported in 2012. During During the next 3 years, demand is the next 3 years, demand is expected expected for 14,155 new rental units; for 23,050 new sales units (Table 1). the 8,895 units currently under Market Details The 2,155 homes currently under construction will satisfy a portion Economic Conditions...... 2 construction and a portion of the of that demand (Table 1). estimated 33,300 other vacant units Population and Households...... 5 in the HMA will satisfy some of the Housing Market Trends...... 8 demand. Data Profiles...... 20 M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 2 Source: U.S. BureauofLabor Statistics ages throughDecember 2012andDecember2013. Notes: Numbers may notaddtototalsbecauseof rounding.Basedon12-monthaver * Minneapolis-St.Paul-Bloomington HMA. Table12-Month Average 2. NonfarmPayroll JobsintheMinneapolis Total nonfarmpayroll jobs Service-providing sectors Goods-producing sectors Government Leisure &hospitality Financial activities Information Manufacturing Other services Education &healthservices Professional &businessservices Transportation &utilities Wholesale &retail trade Mining, logging,&construction Summary Economic Conditions HMA,* Source: Estimatesbyanalyst will likelysatisfysomeoftheforecastdemand.TheperiodisJanuary1,2014,to2017. period. UnitsunderconstructionasofJanuary1,2014. A portionoftheestimated33,000othervacantunitsinHMA Notes: Total demandrepresentsestimatedproductionnecessarytoachieve a balancedmarketattheendofforecast * Minneapolis-St.Paul-BloomingtonHMA. Table 1. Under Total demand construction Continued bySector
Housing DemandintheMinneapolisHMA*During3-Year Forecast Period 23,050 Sales Units 2,155 Minneapolis 1,525,000 1,763,500 December HMA* 233,600 163,500 284,400 271,800 140,400 253,700 181,000 238,500 2012 76,700 38,800 62,000 57,600 12 MonthsEnding 14,155 an increase of 27,900jobs, or1.6per an increaseof E peak from2007.Thelocaleconomic recovered payroll tothenonfarm jobs, theMinneapolisHMAhasfully payroll 1.8millionnonfarm level of cent, during2012.With acurrent jobs, or1.9percent(Table 2),after payrollsnonfarm increased by32,900 during thepastyear. During2013, 2010,increased in thesummerof Rental Units 8,895
neapolis HMA, which began conomic growth intheMin- 1,551,200 1,796,400 December 235,100 167,200 295,800 275,200 141,700 257,600 182,700 245,200 2013 77,700 38,700 62,100 62,500 1,025 9,150 Sales Units Submarket Central Absolute Change 11,400 26,200 32,900 1,000 4,900 1,500 3,700 3,400 1,300 3,900 1,700 6,700 – 100 11,800 Rental 100 Units 7,975 Change Percent – 0.3 1.3 4.0 0.2 8.5 0.6 2.3 1.3 0.9 1.5 1.7 0.9 2.8 1.9
- 9,275 Sales Units - 690
Submarket Southern jobs in the HMA, increasing by 11,400, jobs intheHMA, increasingby11,400, retail tradesectorsaddedthemost andthewholesale and construction, services, themining, logging, and During 2013,theeducationand health ment ratefrom2000through2012. dent employment, andtheunemploy- presents trendsinthelaborforce, resi 2010. Theunemployment rateaver 9.6percentin unemployment rateof and inthenation,whichhadapeak major Midwest metropolitanareas peak average inother ratesreported during 2009at7.9percent,lower than rate intheMinneapolisHMApeaked creasing payrolls. Theunemployment in sectorsreported All othernonfarm decreased by100jobs, or0.3percent. jobsin2013,whenemployment of adecline inthenumber sector reported economic base. Only theinformation adiverse United Statesbecauseof Midwest metropolitanareasandthe HMA comparedwithothermajor was lesssevere intheMinneapolis 2008 andlastedthroughJuly 2010, whichbeganinJanuarydownturn, from 5.5 percent during 2012. Figure 1 from 5.5percentduring2012.Figure1 aged 4.9percentduring2013,down Rental 1,825 Units 380 4,625 Sales Units 440 Submarket Northern Northern Rental Units 530 540
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 3 Figure 2. Table 3. Source: U.S.BureauofLaborStatistics Note: Basedon12-monthaveragesforeachsectorthroughNovember 2013. * Minneapolis-St.Paul-BloomingtonHMA. Source: U.S.BureauofLaborStatistics * Minneapolis-St.Paul-BloomingtonHMA. Figure 1. Source: Note: Excludeslocal schooldistricts. * Minneapolis-St.Paul-Bloomington HMA. HealthPartners 3M Co UnitedHealth Group Fairview HealthServices Wells Fargo Wal-Mart Stores, Inc. Allina Health University ofMinnesota Target Corporation State ofMinnesota Labor force and Name ofEmployer
Education &healthservices16.5% resident employment Economic Conditions Twin Cities Business2013Information Guide 1,520,000 1,620,000 1,720,000 1,820,000 1,920,000 2,020,000 Leisure &hospitality9.3%
Major EmployersintheMinneapolisHMA* by Sector Current NonfarmPayroll JobsintheMinneapolisHMA,* ment Rate inthe Trends inLaborForce,ResidentEmployment,andUnemploy Labor force Other services4.3%
2000
Government 13.1% Government 2001
2002
2003 Minneapolis HMA,*
Continued
Resident employment 2004 Education &healthservices Manufacturing Education &healthservices Education &healthservices Financial activities Wholesale &retail trade Education &healthservices Government Wholesale &retail trade Government Nonfarm Payroll Sector
2005
Mining, logging,&construction3.5% 2006 (Figure 2),isthelargest payroll sector payrolls nonfarm intheHMA of counts forapproximately 16.5percent sector,and healthservices whichac 1.5 percent,respectively. Theeducation 4,900, and3,900jobs, or4.0,8.5,and Professional &businessservices15.3%
2007 Manufacturing 10.2% 2008 2000Through2012 Financial activities7.9%
Information 2.2% 2009 Transportation &utilities3.5% Wholesale &retail trade14.3%
2010 Unemployment rate
2011
2012 Employees Number of 11,000 15,000 18,000 19,600 20,000 20,700 23,850 25,150 30,750 53,800 10.0 0.0 2.0 4.0 6.0 8.0
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which isexpected tobecompletein square-foot facilityinCoonRapids, invested $22millioninanew 120,000- and AllinaHealth,MercyHospital $50million, early in2013atacostof Mother BabyCenterinMinneapolis and Children’s Hospitalsopenedthe Eden Prairiein2016.AllinaHealth campus in itscorporate expansion of expects tocompletea$200million providers, UnitedHealth healthcare HMA industry. AmongMinneapolis the healthcareandsocialassistance sectorwas almostentirelyservices in growth intheeducationandhealth ployers intheHMA(Table 3).Job the10largest em and includes4of since 2000. illustrates sector growth intheHMA Figure3 com/about/moa/history). Minnesota (http://www.mallofamerica. approximately $2billionin impact of season) andhasanannual economic ployees (13,000duringtheholiday stores with11,000year-round em ington, includesmorethan500retail America,inBloom sector. TheMallof balance inthewholesaletradesub in theretailtradesubsectorand sector was approximately 70percent during 2010.Job growth inthetrade ing sincetheeconomy begantorecover jobs,struction which have been increas specialty tradecontractorsandcon increasedemployment levels among of tion sectorispredominately because in themining, logging, andconstruc to openin2016.Thegrowth reported patient healthcenter, whichisexpected a$160millionout of construction Minnesotaapproved University of development costs. Inlate2013,the with approximately $64millionin 23,000-square-foot hospitalexpansion, foot medicalofficebuildinganda ville, willbuildanew 130,000-square- Services, whichisexpanding inBurns 2015.Fairview Health the springof -
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 4 Economic Conditions Source: U.S.BureauofLaborStatistics Note: Currentisbasedon12-monthaveragesforeachsectorthroughDecember2013. * Minneapolis-St.Paul-BloomingtonHMA. Figure 3. – 30 – 20 SectorGrowthintheMinneapolisHMA,*PercentageChange,2000toCurrent – 10
Continued 0 of 2011 (University of Minnesota). 2011(University of of estimated at$8.6 billionannually as has an economic impact in Minnesota semester. Minnesota TheUniversity of Cities campusduringthefall 2013 51,550students atitsTwin ment of andanenroll 25,150 facultyandstaff Minnesota,withapproximately of Minneapolis HMAistheUniversity The thirdlargest employer inthe employees intheMinneapolis HMA. apolis, includesapproximately 30,750 inMinne headquartered Corporation, from 2008through2012.TheTarget 1,200jobsannually,of or1.2percent, percent, afterdecliningbyanaverage ment increasedby800jobs, or1.2 Counties. Stategovernment employ- andWashingtonDakota, Hennepin, state jobsintheadjacentAnoka, are located,withanadditional10,150 approximately 19,450 statepayrolls St.Paul, inRamseyCounty,of where statewide, butfocusedinthecapital Minnesota, with53,800employees ap The largest employers intheMinne 10 olis HMA include the state of olis HMAincludethestateof 20 30 40
50
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150,000 square feet of retailspace, 150,000 square feetof in 1992,continues toexpand, adding America,whichopened The Mallof January 2016. completion dateof $400million andanestimated cost of space, withanestimateddevelopment units, commercialspace, andhotel to includeofficespace, residential is planningamixed-use development new Vikings stadium,Ryan Companies $975million.Proximate tothe cost of open in2016atatotaldevelopment latein2013andisexpectedground to ball LeagueMinnesotaVikings broke new stadiumfortheNationalFoot the line(MetropolitanCouncil).The than $1.7billionindevelopment along jobs, andhasalready generated more million, created5,450construction 10 milesinlength,costmorethan$950 and St.Paul. Thenew railline, nearly Minneapolis connect thedowntowns of 2014andwill uled forthesummerof theMETRO GreenLineis sched of the MinneapolisHMA.Theopening initiatives arecurrently underway in Several large economicdevelopment 60 Total nonfarmpayroll jobs Service-providing sectors Goods-producing sectors Education &healthservices Professional &businessservices Financial activities Transportation &utilities Wholesale &retail trade Manufacturing Government Other services Leisure &hospitality Mining, logging,&construction Information -
M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 5 Economic Conditions Population andHouseholds
Continued ily attributabletonetin-migration, cent, annually. Theincreasewas primar increased to32,500people, or1.0per 2005 through2009,population growth minusbirths residentdeaths).From netnaturalchange (resident because of which(97percent)was nearly allof annually from2001through2005, averaged 27,200people, or0.9percent, ever. Population growth intheHMA changed significantly since2006,how growth intheMinneapolisHMA have population of 31,100. Thepatterns ilar 1.0-percentannual rate, averaging April 2000to2010was atasim April 2010.Population growth from 32,600, or1.0percent,annually since 3.40 million,upbyanaverage of in theMinneapolisHMAiscurrently apolis HMA.Theestimatedpopulation on populationchange fortheMinne July 2010—hadrelatively minoreffects decline fromJanuary 2008through through March2003andthedeeper fromJulyeconomic downturns 2001 in employment dynamics—the local consistent since2000,andchanges P annually, to1.86millionjobs, with to moderateandincrease1.3percent payrollsfarm intheHMAareexpected During the3-year forecastperiod,non lion development value. Radisson Bluhotel,witha$137.5mil America theMallof 2013 openingof This expansion follows theMarch $230million. 330 rooms, allatacostof visitors, andanew hotelwithupto a welcome centerforinternational apolis HMAhasbeenrelatively opulation growth intheMinne
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cludes Hennepin and Ramsey Counties andRamsey Counties Hennepin cludes The Centralsubmarket,which in population andhouseholds. Figure 5shows thenetchange in from 2000totheforecastdate, and populationchange components of slows aswell. Figure4shows the did from2010to2014andmigration as theeconomy grows slower thanit to 30,650,or0.9percent,annually growth isexpected toslow slightly, 3-year forecastperiod,population Duringthe utable tonetmigration. theestimatedincreaseattrib cent of 1 percent,withapproximately 29per by anestimated32,600annually, or the populationinHMAincreased From 2010throughDecember2013, in theMinneapolisHMA. downturn to therelatively lesssevere economic thenationalrecession, the onsetof despite this increaseinmigration, the increase. Localplannersattribute 2009, accountingfor14percentof people annually from2006through 4,650 through 2005toanaverage of 840peopleannually from2001 of which increasedfromanaverage local downturn of 2008 through 2010. of local downturn opment continues torecover fromthe as residentialandcommercialdevel ployment is also expected toincrease, subsectorem Construction sectors. the professionalandbusinessservices and the educationandhealthservices to bewidespread,ledbygrowth in and thirdyears. Job gainsareexpected and decreasingslightly inthesecond job growth stronger inthefirstyear - -
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 6 Population andHouseholds
Continued Figure 4. has increased through net in-migration. has increasedthrough netin-migration. declined after2005 and,since2010, theCentralsubmarket moving out of people Thenumberout-migration. of decreasing through 2010asaresultof or 0.6percent,annually from2005 the populationincreasedby9,775, in2005,and market changed starting trendsinthissub- Demographic more thanoffsetnetnaturalchange. averaged 17,500peopleannually and or 0.3percent,asnetout-migration clined byanannual 5,425, average of the populationinthissubmarketde- the HMA.From 2001through2005, thetotalpopulation in 51 percentof ulation estimatedat1.73million,or and St.Paul, respectively), hasapop- Minneapolis (which have thecitiesof estimates byanalyst Sources: 2000and2010—2000Census2010Census;currentforecast— Notes: ThecurrentdateisJanuary1,2014.forecast2017. * Minneapolis-St.Paul-BloomingtonHMA. estimates byanalyst Sources: 2000and2010—2000Census2010Census;currentforecast— Notes: ThecurrentdateisJanuary1,2014.forecast2017. * Minneapolis-St.Paul-BloomingtonHMA. Figure 5. Average annual change Average annual change 35,000 10,000 15,000 20,000 25,000 30,000 10,000 15,000 20,000 25,000 30,000 5,000 5,000 0 0
Components ofPopulationChangeintheMinneapolis HMA,* 2000toForecast HMA,* 2000toForecast Population andHouseholdGrowth intheMinneapolis 2000 to2010 2000 to2010 Net naturalchange Population
2010 tocurrent 2010 tocurrent grow 1percent,or by16,650,annually. the Centralsubmarket isexpected to forecast period,thepopulation in the publictransitsystem.During the improvements on to emphasis an including ment intothecentralcore, in theregiontoattractdevelopefforts the UnitedStatesandalsoto areas of back tourbanareasnotedinmany populations the general movement of trends intheMinneapolisHMAto at population growth. Localplanners the accounting fornearly 40percentof people, annually, withnetin-migration rapidly to1.1percent,or18,900 Central submarkethasincreased Since 2010,populationgrowth inthe tribute thechange inmigration Households Net migration Current toforecast Current toforecast
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 7 Population andHouseholds
Continued market andto0.7percent,or5,625 people, annually sub fortheSouthern lation growth, to1.0percent,or8,575 slowingtwo popu submarketsreported 2008. From 2008through2010,the submarketfrom2000through Northern similar 15,250,or2.2percent,inthe submarket andbya in theSouthern increased by15,050,or1.9percent, submarkets. Thepopulation Northern generally and declinedintheSouthern andpopulationgrowth in-migration increased intheCentralsubmarket,net andpopulationgrowth net in-migration related totheCentralsubmarket. As hadpopulation changes inverselykets submar andNorthern The Southern tion intothese two submarketswas a thedeclining migra 2011. Muchof 110 peopleannually from2009through averaging to net out-migration, turned in 2007,to1,9002008,and then 2000 through2006,declined to 3,800 averaged 10,550peopleannually from more pronounced.Netin-migration dynamicmigration was similarbut submarket,the 2011. IntheNorthern people annually from2007through through 2007,beforedroppingto1,700 7,675peopleannually from2000 of maintained consistentnetin-migration submarkets. submarket TheSouthern this movement was tothesuburban muchnificant netout-migration, of sig Central submarketwas reporting namics. Early inthe2000s, whenthe populationdyare alteringreported annually. patterns Changing migration averaging 0.6percent,or4,925people, submarket, growth intheNorthern and acontinued slowing population 1.0percent, taining agrowth rateof ket, to8,800peopleannually, main submar slight increaseintheSouthern the two submarketsdiverged, witha the populationgrowth trajectoriesof market. From 2010toJanuary 1,2014, people, sub annually fortheNorthern - - -
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or 5,100, annually in the Northern or 5,100,annually intheNorthern submarketand0.6percent, Southern 1 percent,or8,900,annually inthe is expected togrow byanaverage of the forecastperiod,population Minneapolis andSt.Paul. During able, urbanlifestyleinthecitiesof whicharechoosingawalk both of and young “mi in older“empty-nester”households ing thesetrends, includinganincrease aredrivthat changingdemographics Paul. Localplanningofficialsindicate inMinneapolisandSt. opportunities to themoresignificantemployment choosing theCentralsubmarket,closer new residentstotheHMA result of percent, annually. million, growing by10,150,or0.8 the HMAisexpected toreach1.34 householdsin period, thenumber of theforecast submarket. Bytheendof householdsbytenure by number of market. Figures6,7,and8show the most significantly intheCentralsub rate hasdeclinedineachsubmarket, and foreclosures, thehomeownership tighterlendingstandards result of date.from 2010tothecurrent Asa and 0.7percent,respectively, annually the 2000sand2,9751,925,or0.9 percent, respectively, annually during were 6,025and5,450,or2.12.2 submarkets andNorthern Southern figuresforthe 2010. Corresponding 0.8 percent,or5,700,annually since growth thathasincreasedto a rateof or 2,125,annually duringthe2000s, 0.3 percent, increased byanaverage of households submarket, thenumber of percent, since2010.IntheCentral 10,600households, or0.8 increase of anaverage1.31 million,representing HMA iscurrently estimatedtobe householdsinthe The number of submarket. llennial” ho useholds,
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 8 Population andHouseholds Housing Market TrendsHousing
Continued rate recordedin April2010.Thenum percent, down fromthe 2.1-percent 1.3 with anestimatedvacancy rateof Central submarketareslightly tight, Sales housingmarketconditions inthe Sales Market—Central Submarket Sources: 2000and2010—2000Census2010Census;current—estimates byanalyst Note: ThecurrentdateisJanuary1,2014. Sources: 2000and2010—2000Census2010Census;current—estimatesbyanalyst Note: ThecurrentdateisJanuary1,2014. Figure 6. Figure 7. Figure 8. Sources: 2000and2010—2000Census2010Census;current—estimatesbyanalyst Note: ThecurrentdateisJanuary1,2014. 100,000 150,000 200,000 250,000 200,000 250,000 300,000 100,000 150,000 100,000 200,000 300,000 400,000 500,000 50,000 50,000 0 0 0
2000 toCurrent Number ofHouseholdsbyTenure intheCentralSubmarket, 2000 toCurrent Number ofHouseholdsbyTenure Submarket, intheSouthern 2000 toCurrent Number ofHouseholdsbyTenure Submarket, intheNorthern 2000 2000 2000 -
Renter Renter Renter from 4.1 months of unsoldinventory from 4.1months of andRamseyCounties,nepin down inventory in January 2014inbothHen unsold is very limitedat3.2monthsof homesavailable forsalecurrently ber of 2010 2010 2010 Owner Owner Owner Current Current Current -
M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 9 Sales Market—CentralSubmarket Market TrendsHousing
Continued through 2011. As the population began through 2011. As the population began 18,050salesannually from2007 of 2006 beforedecliningtoanaverage aged 23,600 annually during2005 and Company). Existinghomesalesaver 2012 (Metrostudy, AHanleyWood compared withthenumber soldduring taled 25,650,upnearly 20percent existing homesinthesubmarketto all Marketing.) During2013,salesof teed. Powered by10KResearch and Data deemedreliablebutnotguaran REALTORS Area Associationof MLS, asdistributedbytheMinneapolis (The precedingdataarefromNorthstar Ramsey CountyduringJanuary 2013. County and4.2monthsin in Hennepin in 2009, the year the HMA reported in 2009,theyear theHMAreported $207,100reported 2011, withalow of $226,900 annually during2008through 2007 anddeclinedtoanaverage of stable at$284,900between 2005through in theCentralsubmarketremained home salespricesforexisting homes $286,500 recordedin2007.Average than therecentpeaksalespriceof sales priceremains14percentless 2012. Despitethisincrease, theaverage with theaverage sales priceduring cent, to$245,800,during 2013 compared (REO) homes, increasednearly 6per home, includingReal Estate Owned anexisting The average salespriceof next 3years. ownership ratewillslow duringthe expected thatthedeclineinhome has increasedinthesubmarket.Itis salesactivity loans andthevolume of en, lendershave made moremortgage the HMAhascontinued tostrength home salesnoted.Astheeconomy in inthedecline market, reflected lending standardsinthemortgage tighter holds, ingeneral, asaresultof holds grew fasterthanowner house renter house in 2005,thenumber of to increaseinthissubmarket,starting ®
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$260,000 for a non-REO existing home $260,000 foranon-REOexisting home ing 2013was $151,200comparedwith aREOhomedur erage salespriceof from 26percentduring2012.Theav ing for21percentduring2013,down home salesinthesubmarket, account allexisting declining asapercentof REOhomesiscurrently The number of home salesfrom2008through2011. allexisting but averaged 36percentof home salesfrom2005through2007 allexisting for lessthan10percentof market. REOhomesalesaccounted the growth inREOhomesthesub ing existing homesalespriceswas A contributingfactortothedeclin the highestunemployment rate. affect prices. During 2013, the aver decline innew homesalesseverely nordidthe local economicdownturn, not asnegatively affectedduringthe New homesales prices, however, were and 2011beforeincreasingin 2012. averaged 880annually during2010 annually during2008and2009 pace. New homesales averaged 1,225 in 2008,declinedatanaccelerating as theeconomy, whichbegantosoften decline innew homesales continued 3,225 in2007,and1,9002008.The declined steadily to3,825in2006, sales totaled4,075during2005and during2012.New home sales reported cent morethanthe950new home home salestotaled1,025,nearly 9 per omy contracted.During2013,new below levels beforetheecon reported but new homesalesremainsignificantly submarket begantoincreasein2012, new homesintheCentral The salesof (Black KnightFinancialServices, Inc.). from 4.1percentinDecember2012 transitioned intoREOstatus, down delinquent, were inforeclosure, or submarket were 90ormoredays allactive home loansinthe cent of December2013,2.9per sale. Asof
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 10 Sources: U.S.CensusBureau,BuildingPermitsSurvey;estimatesbyanalyst Notes: Includestownhomes.datathroughDecember2013. Table 4. Figure 9. Source: Estimatesbyanalyst demand. TheforecastperiodisJanuary 1,2014,toJanuary2017. 17,600 othervacantunitsinthe submarketwilllikelysatisfysomeoftheforecast Notes: The1,025homescurrently underconstructionandaportionoftheestimated 1,000 1,500 2,000 2,500 3,000 3,500 4,000 500 Sales Market—CentralSubmarket Market TrendsHousing 0
1,000,000 Estimated DemandforNewMarket-RateSalesHousing in the CentralSubmarketDuringForecastPeriod
Single-Family HomesPermittedintheCentralSubmarket, 2000 Through 2013 750,000 500,000 400,000 300,000 250,000 200,000 150,000 2000 From
2001 Price Range($)
2002
2003 and higher 999,999 749,999 499,999 399,999 299,999 249,999 199,999 2004 To
2005 Continued
2006 ing theeconomicandsaleshousing 2012 (Figure9).Bycomparison,dur during pared withthe1,575permitted ted, an increase of 24percentcom ted, anincreaseof data) single-family homeswere permit higher thantheaverage salespricere submarket was $496,700,18percent sales priceforanew homeinthe year. During2013,1,950(preliminary increasedduringthepast permitted, single-family homes by thenumber of homebuilding activity, asmeasured sales marketconditions, single-family In responsetoimproving economicand 17percentannually.an average of in2010,thepricehasincreased reported $308,500wasaverage salespriceof in2012.Sincetherecentlowestported
2007 Demand Units of 1,375 1,825 1,825 1,375
460 460 920 920 2008
2009
2010 Percent of Total 2011 10.0 15.0 20.0 20.0 15.0 10.0 5.0 5.0
2012
2013 -
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price range. sales housinginthesubmarket by trates theestimateddemandfor new nually from2000through2006.New home construction is occurring insub isoccurring home construction the average an 3,175homespermitted 2007 through2011,itremainsbelow improvement fromthe5years from during2013isan homes permitted 1,950 rateof Although thecurrent annually, from2008through2011. 960homeswas average permitted, of were during2007andan permitted 1,600single-familydownturn, homes priced under$400,000.Table 4illus 1,025 new homescurrently undercon the Centralsubmarket(Table 1).The estimated for9,150new homesin During thenext 3years, demandis 2014. pancy expected inthespring of thehomesarepresold,withoccu of is expected tobestrongest forunits theforecastdemand.Demand of reenter themarketwillsatisfysome 17,600 othervacant unitsthatmay theestimated of andaportion struction than $1 million. More than one-half than $1million.Moreone-half homes pricedfrom$265,000tomore units withone-tothree-bedroom loft includes 164new-construction downtown Minneapolis District of ums. Stonebridge LoftsintheMill Minneapolis aretypically condomini owner-occupancy homesindowntown at$186,000.New with pricesstarting development calledWickford Village, atownhome Homes isconstructing Park, County, alsoinHennepin Ryland 146homessold.InBrooklyn 134 of homes pricedfrom$392,000,with County, whichincludessingle-family in northwest Plymouth, inHennepin is developing ElmCreekHighlands, urban locationswherePulteHomes -
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 11 Sources: U.S.CensusBureau, BuildingPermits Survey;estimates byanalyst Notes: Excludes townhomes. Includesdatathrough December2013. Figure 11. Sources: 2000and2010—2000Census2010Census;current—estimates byanalyst Note: ThecurrentdateisJanuary1,2014. Figure 10. 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0.0 2.0 4.0 6.0 8.0 Central Submarket Market TrendsHousing 0
2000 acancy Rates in the Central Submarket, acancy RatesintheCentralSubmarket,
Multifamily UnitsPermittedintheCentralSubmarket, 2000 toCurrent 2000 Through 2013 Rental V
2001
2002 2000 2.6 Continued
2003
2004
2005
2006 Vacancy market, ratesintheapartment are completed. continue toabsorbnew unitsasthey owner householdsbecomingrenters, foreclosuresandformerly the impactof household formations, duepartiallyto declined, asdescribedabove. Renter production, therentalvacancy rate 2013. Despitethisnew multifamily during2012and unitspermitted of strongly,turned withrecordnumbers hasre suchconstruction downturn, declined duringthelocaleconomic Although new multifamily production inApril2010(Figure10). rate reported vacancy rate, down fromthe7.5-percent balanced, withanestimated5.4-percent the Centralsubmarketare Rental housingmarketconditionsin Rental Market—Central Submarket other units. vacancy Theapartment condominiums, mobilehomes, and also includesrentedsingle-family homes, ing ratesintherentalmarket,which in general, arelower than
2007 2010 7.5
2008
2009
2010
2011 cor cur 2012 Current respond rently 5.4 2013
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since the first quarter of 2010.Apart of since thefirstquarter at lessthan 5percentinthesubmarket has beenrecordedbyMPFResearch Park vacancy area.Theapartment rate 6.5 percentintheUptown/St. Louis South Minneapolis/Richfieldareato percent intheMPFResearch-defined Vacancy 1.8 ratesranged from a low of percent ayear earlier(MPFResearch). 2013,upslightly from3.3 of quarter mately 3.5percentduringthefourth rate inthesubmarketwas approxi- vely high andfinancing for para vacancyapartment rateswere com 6,750unitsper to the2012figureof new multi ket. Althoughthenumber of intheCentralsubmar new properties ington areas, to$1,200and$990,re 6percentwere re to $1,100.Gainsof led bytheMinnetonkaarea,whereav market, developers continue to develop enteringthe apartments constructed newly with significantnumbers of marketconditions,apartment even Given consistently balanced-to-tight to $1,050. timeframe intheCentralSt.Paul area, declined 4percentduringthesame spectively. Average rents apartment Uptown/St. LouisPark andBloom - 4 percenteachwere recordedinthe University area,to$1,375andgainsof intheDowntownported Minneapolis/ annually. Astheeconomy softened, stable, averaging 4,125unitspermitted multifamily remained unitspermitted of From 2000through2006,thenumber mitted, goingbackto2000(Figure11). defined areas in the Central submarket, defined areasintheCentralsubmarket, from ayearResearch-in theMPF ago ment marketrentsgenerally increased erage monthly rentsroseby8percent, permitted during2013werepermitted second only 7 percentduring2013,the6,300units family declinednearly unitspermitted ti -
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 12 Rental Market—CentralSubmarket Market TrendsHousing Table 5. Source: Estimatesbyanalyst some oftheestimateddemand.Theforecast period isJanuary 1,2014,toJaruary 1,2017. Notes: Numbers maynotaddtototalsbecause ofrounding. The7,975unitscurrently under construction willlikelysatisfy Total 1,800 ormore 1,600 to1,799 1,400 to1,599 1,200 to1,399 1,000 to1,199 Monthly Gross Rent ($) Zero Bedrooms
Estimated DemandforNewMarket-RateRentalHousingintheCentralSubmarketDuring the Forecast Period Demand Units of 590 120 180 180 30 90 Continued Monthly Gross Total 2,000 ormore 1,800 to1,999 1,600 to1,799 1,400 to1,599 1,200 to1,399 Hennepin andRamseyCounties.Hennepin insuburban are underconstruction and St.Paul, andanother1,500units hoods outsidedowntown Minneapolis inneighbor are underconstruction and St.Paul, another1,625apartments downtown marketsinMinneapolis inthe are currently underconstruction mately 4,850market-rateapartments from 2009through2011.Approxi- annually 2,200unitspermitted age of 182 market-rate apartments inthe 182 market-rateapartments 2013andexpects todeliver mer of intheearlywhich brokeground sum is Junction Flats, Loop, intheNorth under Among properties 2007 and2008,increasingtoanaver averaged only 1,200annually during As aresult,multifamily units permitted multifamily development was tight. in DakotaCounty to4.7monthsin 2013, whichranged from3.2months of inventoryavailableasJanuary of whicharelessthanthemonths tory ineachofthefourcounties, all ranges from3to4monthsof inven of homesavailableforsalecurrently reported inApril2010.Thenumber of 1.2percent,downfrom1.6percent tight, withanestimatedvacancyrate the Southernsubmarketareslightly Sales housingmarketconditionsin Sales Market—SouthernSubmarket Rent ($) One Bedroom Demand Units of 4,725 1,425 1,425 240 710 940 Monthly Gross constr 2,200 ormore 2,000 to2,199 1,800 to1,999 Total 1,600 to1,799 1,400 to1,599 Rent ($) Two Bedrooms uction - -
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Demand Units of 4,125 1,250 1,250 town, withanexpected occupancyin ket by rent and number of bedrooms. ket byrentandnumber of Lofts includes82market-rateunitsin 2014.InSt.Paul, Rayette summer of shows theestimateddemandfornew throughout theforecastperiod.Table 5 Demand isexpected to remain steady thisdemand(Table 1). of a portion willmeet already underconstruction tional rentalunits. The7,975units demand isexpected for11,800addi 2014.InMapleGrove, sub the fallof inLowera historicrehabilitationeffort submarket. counties thatcomprisetheSouthern existing homesalesamongthe four County accountedfor43percent of through 2011.During2013,Dakota average of8,800annuallyfrom 2007 2006, asalesratethatdeclinedtoan sales averaged11,800during2005and homes soldduring2012.Existinghome increase of19percentfromthe9,675 of existinghomestotaled11,500,an Carver County.During2013,sales market-rate rentalunitsinthesubmar During the3-year forecastperiod, two-bedroom units. from $1,050to$2,200forone-and 262-unit property, withrentsthatrange at ArborLakesbeganleasingthe County,urban Hennepin TheSkye 210 620 830 Three orMore Bedrooms Monthly Gross 2,400 ormore 2,200 to2,399 2,000 to2,199 Total 1,800 to1,999 1,600 to1,799 Rent ($) Demand Units of 2,350 120 350 470 710 710 - - -
M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 13 Figure 12. Sources: U.S.Census Bureau,BuildingPermitsSurvey; estimatesbyanalyst Notes: Includestownhomes. Includesdatathrough December2013. 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Sales Market—SouthernSubmarket Market TrendsHousing 0
2000
Single-Family Homes Permitted in the Southern Submarket, Single-Family HomesPermittedintheSouthern 2000 Through 2013
2001
2002
2003
2004
2005
Continued
2006 low in2005and2006werestill homes. ThesalesofREOhomeswere average salespriceforallexisting a significantdownwardeffectonthe the influenceofREOhomesaleshad $221,500. AsintheCentralsubmarket, from 2009through2011,averaging $262,600 in2008,andcontinuedtofall from 2005through2007,declinedto home salespricesaveraged$289,300 of $293,700recordedin2006.Existing remains 15percentlessthanthepeak average salespriceofanexistinghome ing 2013.Despitetheincrease, increased 11percent,to$249,100,dur home, includingsalesofREOhomes, The averagesalespriceofanexisting from the3.6-percentratereportedin or transitioned into REO status, down days delinquent,wereinforeclosure, loans inthesubmarketwere90ormore ber 2013,2.6percentofallactivehome a non-REOresalehome.AsofDecem $171,900, comparedwith$261,200for average REOhomesalespricewas and 20percentin2013.In2013,the before decliningto29percentin2012 in eachsubsequentyearthrough2011, and remainedatmorethan30percent to 29percentofexistinghomesales number ofREOhomesalesincreased sales in2007.In2008,however,the only 11percentofallexistinghome
2007
2008
2009
2010
2011
2012
2013 -
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homes inthesubmarkethavenearly nually. Averagesalespricesfornew clined anaverageof19percent totaled 3,875,through2011,salesde From 2005,whennewhomesales 1,100 newhomesalesreportedin2011. which were28percentmorethanthe 1,400 newhomesalesreportedin2012, submarket, 31percentmorethanthe new homesaleswerereportedinthe the past2years.During2013,1,825 2005 through2011,haveincreasedin market, whichdeclinedsteadilyfrom New homesalesintheSouthernsub submarkets intheHMA. was thelowestrateamongthree December 2012.The2.6-percentrate developing Greystone Highlightsin to urbanamenities.RylandHomes is employment centersintheHMA and have shortercommutestothe major to MinneapolisandSt.Paul, which marily incommunitieslocated closest 2011. Newhomedevelopmentispri and averaged1,750from2008through average 3,775during2006and2007, from 2000through2005,declinedto permitted averaged7,000annually 2012 (Figure 12). Single-family homes with thenumberpermittedduring to 3,050(preliminarydata),compared homes permittedincreased20percent, ing 2013,thenumberofsingle-family submarket duringthepastyear.Dur mitted, increasedsignificantlyinthe number ofsingle-familyhomesper homebuilding, asmeasuredbythe conditions improved,single-family As theemploymentandsalesmarket peak priceof$388,300during2006. less than1.0percentbelowtherecent the averagepricerecordedin2012and home was$384,800,9.0percentabove 2013, theaveragesalespriceofanew the localeconomicdownturn.During returned tothelevelrecordedprior - -
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 14 Sales Market—SouthernSubmarket Market TrendsHousing Source: Estimatesbyanalyst forecast demand.TheperiodisJanuary1,2014,to2017. mated 5,900othervacantunitsinthesubmarketwilllikelysatisfysomeof Notes: The690homescurrentlyunderconstructionandaportionoftheesti Figure 13. Table 6. analyst Sources: 2000and 2010—2000Censusand2010Census; current—estimatesby Note: Thecurrent dateisJanuary1,2014. 0.0 2.0 4.0 6.0 8.0 700,000 500,000 400,000 350,000 300,000 250,000 200,000 150,000 From
Estimated DemandforNewMarket-RateSalesHousing in the Southern SubmarketDuringtheForecastin theSouthern Period acancy Rates in the Southern Submarket, acancy Rates intheSouthern 2000 toCurrent Rental V Price Range($) 2000 3.7 and higher 699,999 499,999 399,999 349,999 299,999 249,999 199,999 To Continued senior housingthepast3years,has low andpredominatelyfocusedon construction, whichhasbeenrelatively than ownerhouseholds.Newapartment of renterhouseholdshasgrownfaster ards ofthepast5years,number the firstphasesoldandpricesstarting Highlights, with23of66homesin Homes isdevelopingDakotaCrossing In Shakopee,ScottCounty,Ryland from $244,000tothemid-$300,000s. tion single-familyhomepricesrange of 52homesitessold;newconstruc Rosemount, DakotaCounty,with30 family homemortgagelendingstand The rental housing market in the South Rental Market—SouthernSubmarket foreclosures andmorestringentsingle- April 2010(Figure13).Withincreased percent, downfrom7.6percentin with anestimatedvacancyrateof5.3 ern submarketiscurrentlybalanced, 2010 7.6 Demand Units of 1,350 1,800 1,800 1,350 450 450 900 900 Current 5.3 Percent of Total 10.0 10.0 15.0 20.0 20.0 15.0 5.0 5.0 - -
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some decreasing,butthemagnitude mixed, withsomeincreasing and vacancy ratesreportedin2013 were area. Comparedwithratesin 2012, the the EdenPrairie/Shakopee/Chaska Inver GroveHeights,to3.2percentin which includesthecitiesofEaganand South St.Paul/Eaganmarketarea, percent intheMPFResearch-defined 2013, vacancyratesrangedfrom2.1 than 4percentsince2010.During 2009, respectively,andhavebeenless 6.9 and6.5percentduring2008 in thesubmarketwereestimatedat Research). Apartmentvacancyrates down from3.3percentin2012(MPF estimated vacancyrateof2.8percent, submarket arecurrentlytight,withan Apartment marketconditionsinthe into therentalmarket. homes shiftingfromhomeownership been supplementedbysingle-family ing inthesubmarketbypricerange. estimated demandfornewsaleshous and $350,000.Table6illustratesthe those homespricedbetween$250,000 market continuestoimproveandfor the forecastperiodassaleshousing expected tobestrongereachyearof of theforecastdemand.Demandis re 5,900 othervacantunitsthatmay tion andaportionoftheestimated 690 homescurrentlyunderconstruc Southern submarket(Table1).The estimated for9,275newhomesinthe During thenext3years,demandis in thisdevelopmentstartat$327,000. nearly soldout;single-familyhomes the firstphaseofStonemillFarmsis ton County,PulteHomesreported at $351,000.InWoodbury,Washing enter themarketwillsatisfysome -
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 15 Figure 14. Sources: U.S.CensusBureau,Building PermitsSurvey;estimatesbyanalyst Notes: Excludestownhomes.Includes datathroughDecember2013. 1,000 1,500 2,000 2,500 3,000 3,500 4,000 500 Rental Market—SouthernSubmarket Market TrendsHousing 0
2000
Multifamily UnitsPermittedintheSouther 2000 Through 2013
2001
2002
2003
2004
2005 Continued
2006 rents inthesubmarketincreased1per than 1percent.During2013,average of bothgainsanddeclineswereless apartment vacancyratefellto3.8per the submarket. In 2011, 640 units were the submarket.In2011,640unitswere with newmultifamilyconstructionin developers continuedtobecautious Despite thetightmarketconditions, a significantincreaseinthevacancyrate. which wereabsorbedwithoutcausing 970 unitswerepermittedduring2010, cent in2010from6.5percent2009— In responsetodecreasedsupply—the to anaverageof540unitsannually. 2009 multifamilyunitspermittedfell rental occupancy.From2006through 38 percentofwhichwereintendedfor from 2000through2005,approximately units permittedaveraged2,775annually activity intheearly2000s.Multifamily low levelscomparedwithpermitting Southern submarketareatrelatively Multifamily unitspermittedinthe areas, respectively. Eagan, andBurnsville/Apple Valley in theEastSt.Paul,SouthPaul/ 5 percent,to$975,$980,and$990, Chaska area,to$1,025,and3,4, cent intheEdenPrairie/Shakopee/
2007
2008
2009
2010 n Submarket,
2011
2012
2013
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Carver County.Thisdevelopment round, isunderconstructioninChaska, sota HousingFinanceAgency’s2012 bedrooms. units byrentlevelandnumberof demand fornewmarket-raterental period. Table7showstheestimated crease graduallyduringtheforecast submarket. ing newpropertiesintheSouthern ceived anallocationoflow-income housing taxcreditsduringtheMinne Creek’s RunTownhomes,whichre Among properties under ing developerscautiousaboutintroduc Central submarket,whichmaybekeep (Table 1).Demandisexpectedtoin currently underconstructionwillsat struction, andthedeveloperisaccept includes 40unitscurrentlyundercon 1,825 newrentalunits.The380units demand isexpectedforanestimated During the3-yearforecastperiod, fall of2014. of Oakdaleisscheduledtoopeninthe and amemorycarefacility.TheWaters will include92unitswithseniorliving in Oakdale,WashingtonCounty,and Senior Living,isunderconstruction The WatersofOakdale,by additional 44unitsinasecondphase. ing applicationswithplansforan level ofapartmentconstructioninthe indicate concernabouttheelevated Leasing professionalsinthesubmarket were affordableproperties(Figure14). permitted wereforsenioroccupancyor 2013. In2013,nearlyalloftheunits 2012 anddroppedfurtherto450in permitted, whichthenfellto500in isfy a portion of the estimated demand isfy aportionoftheestimateddemand construction, - -
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 16 Rental Market—SouthernSubmarket Market TrendsHousing Continued price of anexisting homeduring2013 price of had inthemarket. Theaverage sales REOhomesalesprices theinfluence of market remainslow, primarily because percent fromtheraterecordedduring existing homestotaled13,400,up12 to 10.6months. During2013,salesof year ago, whentherange was from3.7 theseven countiesfroma in eachof available inventory months of declined months inPierceCounty(Wisconsin); Anoka County(Minnesota)to8.1 available inventory3.1 monthsof in January 2014ranged from sale asof homesfor April 2010.Thenumber of percent, down from1.8percentin 1.5 with anestimatedvacancy rateof submarketarebalanced, the Northern Sales housingmarketconditionsin Sales Market—NorthernSubmarket price of anexisting home inthesub price of fully recovered, theaverage homesales Although existing homesaleshave existing homesalesduring2013. of Anoka Countyaccountedfor43percent counties thatcomprisethis theseven from 2007through2011.Of de ing homesalespriortothelocaleco exist thelevel2012, andsurpassed of 12,650 during2005and2006 submarketaveragedin theNorthern Existinghomesales nomic downturn. Table 7. Source: Estimatesbyanalyst is January 1,2014,toJanuary 1,2017. der construction willlikelysatisfysomeoftheestimateddemand.The forecast period Notes: Numbers maynotaddtototalsbecauseofrounding. The380unitscurrently un Monthly Gross Total 1,800 ormore 1,600 to1,799 1,400 to1,599 1,200 to1,399 1,000 to1,199 clined toa Rent ($) One Bedroom
Estimated DemandforNewMarket-RateRentalHousingin the Southern SubmarketDuringtheForecastthe Southern Period verage 9,850annually Demand Units of 640 130 190 190 65 65 submarket, Monthly Gross 2,100 ormore 1,900 to2,099 Total 1,700 to1,899 1,500 to1,699 1,300 to1,499 Rent ($) Two Bedrooms - -
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cent of allactive homeloanswere 90 cent of of allexisting homesaleswere REO of cent in2011.During2013,31percent 5 percent in 2006 to more than 50 per- REOhomessoldincreasedfrom of 2011. Duringthistime, thepercent annually, untilreaching$132,900in 6percent price declinedanaverage of 2005. From 2006,theaverage sales $196,700during the peakaverage of corded during2012,butwell below of the local economic downturn from from thelocaleconomic downturn of in 2011;thisperiodincludesthe onset from 5,225salesin2005to740 sales 28percentannually,an average rateof submarket have declinedsteadily at new homesintheNorthern sales of sales pricehasrecovered. Since2005, sales remaininglow, whiletheaverage current home sales, withthenumber of opposite fromthetrendsinexisting New homesaleshave recordedvalues in theHMA. amongthethreesubmarkets reported from 2012,itwas thehighestlevel ber 2012.Althoughthisratedeclined in thesubmarketwas $149,100,nearly 10 percenthigherthanthepricere down from5.4percentduringDecem or moredays delinquent,were infore December2013,3.9per sales. Asof closure, ortransitionedintoREOstatus, Demand Units of 730 150 220 220 75 75 Three orMore Bedrooms Monthly Gross 2,300 ormore 2,100 to2,299 Total 1,900 to2,099 1,700 to1,899 1,500 to1,699 Rent ($) Demand Units of 460 140 140 45 45 90 -
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 17 Figure 15. Sources: U.S.CensusBureau,BuildingPermitsSurvey;estimates byanalyst Notes: Includestownhomes.datathroughDecember2013. Table 8. Source: Estimates byanalyst The forecastperiod isJanuary1,2014,to 1,2017. other vacantunitsinthesubmarket willlikelysatisfysomeoftheforecastdemand. Notes: The440homescurrently under construction andaportionoftheestimated 9,800 10,000 2,000 4,000 6,000 8,000 Sales Market—NorthernSubmarket Market TrendsHousing 0
Estimated DemandforNewMarket-RateSalesHousing inthe Northern SubmarketDuring theForecastNorthern Period 2000 500,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000
Single-Family HomesPermittedintheNorther 2000 Through 2013 From
2001 Price Range($)
2002
2003 and higher 499,999 399,999 349,999 299,999 249,999 199,999 149,999 2004 To
2005 Continued
2006 likely helpedtomaintainaverage sales new single-family homeconstruction unemployment rate. Lower levels of itshighest the year theHMAreported thenfellto$189,000during 2009, turn, 2007, theaverage salespricefora during2012.From ported 2005through declined to$228,600during2008,at market was $244,500,avalue that the onset of thelocaleconomicdown the onsetof newly homeinthesub constructed the $233,800average salespricere was $244,100,4percenthigherthan home inthesubmarketduring2013 anewly constructed erage salespriceof 920 homessold,during2013.Theav and increasedan creased 4percent,to770homessold, sales in 2012, whenthenumber of home salesbegantorecover during economicrecovery in2011.New of 2008 through2010totheearly stages
2007 Demand Units of
220 220 430 650 870 870 650 430 2008
2009
2010 other 20percent,to Percent of Total 2011 n Submarket, 10.0 15.0 20.0 20.0 15.0 10.0 5.0 5.0
2012
2013
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2,200 (preliminary data)during2013 2,200 (preliminary increased38percent,to permitted, single-family homes by thenumber of asmeasured New homeconstruction, average pricethenroseto$214,200. they did.During2010and2011,the than prices fromdecliningfurther range. housing inthesubmarketbyprice illustrates thedemandfornew sales priced atlessthan$300,000.Table 8 expected tobestrongest forhomes theforecastdemand.Demandis of reenter themarketwillsatisfysome 9,800 othervacant unitsthatmay theestimated of tion andaportion - 440 homescurrently underconstruc submarket (Table 1).The Northern estimated for4,625new homesinthe During thenext 3years, demandis ing at$373,000. mitted during2012(Figure15).From began selling22homesitesinitsfirst the PreserveatLegacyCreek,recently $299,000, andanewer development, with single-family at homesstarting 29homesitessold, one-thirdof reports County. TheParkside atLegacyCreek new neighborhoodsinBlaine, Anoka Ryland Homesissellinghomesintwo and itsemployment opportunities. areas closertotheCentralsubmarket is primarilynew in home construction Current the HMAinnet-migration. submarketled nually astheNorthern 7,925homeswere an permitted of From 2000through2005,anaverage on average, during2006and2007. less thanthe3,850homespermitted, averagedpermitted 1,125,significantly new single-family homes number of therecovery in2011, the ning of downturn in2008throughthebegin downturn thelocal the beginningof compared withthe1,575homesper phase, withsingle-family homesstart economic
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 18 Figure 16. Sources: 2000and2010—2000Census and2010Census;current—estimatesbyanalyst Note: ThecurrentdateisJanuary 1,2014. 0.0 2.0 4.0 6.0 8.0 Northern SubmarketContinued Market TrendsHousing acancy Rates in the Northern Submarket, acancy RatesintheNorthern 2000 toCurrent Rental V 2000 2.5 all of whichareintendedforrental all of duringthepreviouspermitted year, percent comparedwiththenumber during2013,up40 units permitted units,apartment with570multifamily developers expanded productionof marketconditionsin2012, apartment In responsetothebalanced-to-tight 2013, to$880. average rentincreased3percentduring at lessthan3percentsince2010.The area during2009andhave remained at 5.1percentintheAnokaCounty vacancyApartment rateswere reported percent ayear ago(MPFResearch). 2013,upslightly from2.1 of quarter AnokaCountyduringthefourth of for theMPFResearch-defined area 2.2percent estimated vacancy rateof market isbalancedtotight,withan might beotherwise. Theapartment vacancyhas kept rateshigherthanthey tothissubmarket in netin-migration tion isincreasing;however, thedecline permitting activity,permitting construc apartment low multifamilyAfter several years of 7.6 percentinApril2010(Figure16). 6.2percentcompared with rate of improving, withanestimatedvacancy submarketissoftbut the Northern The overall rentalhousingmarketin Rental Market—NorthernSubmarket 2010 7.6 Current 6.2 -
homes. Absorption is reported tobe homes. isreported Absorption through 2006. As in-migration began through 2006.Asin-migration averaged 850unitsannually from2000 occupancy. Multifamily production thoseunitsareintendedfor senior of occupancy (Figure17);90percent number of bedrooms. number of rate rentalunitsbyrentlevel and estimated demandfornew market- period (Table 1).Table 9shows the satisfy demandduringtheforecast with vacant available rentalunits, will along 540 unitsunderconstruction, units,market-rate apartment butthe demand isexpected for530new During the3-year forecastperiod, completion early in2014. homes were leasedbeforethescheduled are setasideforformerly homeless Median Incomeorless;fourunits Area 60percentof to peopleearning whichareavailablebedrooms, allof 50 townhomes withtwo andthree Townhomes, alsoinRamsey, includes townhomes at$1,800.Seasons start $1,250 to$1,950andthree-bedroom units. Two-bedroom unitsrentfor from $870to$1,350forone-bedroom from $875 to $925 for studio units and 2013.Rentsing inSeptember range studio units, one-andtwo-bedroom in Ramsey, AnokaCounty, includes The 230-unitResidence attheCOR, submarket. the Northern only 210unitswere in permitted of 2007 through2011,anannual average family declined.From unitspermitted apartments, andthree-bedroomtown to slow, however, multi thenumber of families. All50unitsatSeasonsTown strong fortheunits, whichbeganleas
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M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 19 Rental Market—NorthernSubmarket Market TrendsHousing
Continued Figure 17. Table 9. Sources: U.S.CensusBureau,BuildingPermitsSurvey;estimatesbyanalyst Notes: Excludestownhomes.IncludesdatathroughDecember2013. Source: Estimatesbyanalyst is January 1,2014,toJanuary 1,2017. der construction willlikelysatisfysomeofthe estimateddemand.The forecast period Notes: Numbers maynotaddtototalsbecauseofrounding. The540unitscurrently un Monthly Gross Total 1,700 ormore 1,500 to1,699 1,300 to1,499 1,100 to1,299 900 to1,099 1,000 1,200 1,400 1,600 1,800 200 400 600 800 Rent ($) 0 One Bedroom
Estimated DemandforNewMarket-RateRentalHousingin the Northern SubmarketDuring theForecastthe Northern Period 2000
Multifamily Units Permitted in the Northern Submarket, Multifamily UnitsPermittedintheNorthern 2000 Through 2013
2001 Demand Units of 160
15 15 30 50 50 2002
2003 Monthly Gross Total 1,900 ormore 1,700 to1,899 1,500 to1,699 1,300 to1,499 1,100 to1,299 2004 Rent ($) Two Bedrooms
2005
2006 Demand Units of 2007 210 20 20 40 65 65
2008
2009 Three orMore Bedrooms Monthly Gross Total 2,100 ormore 1,900 to2,099 1,700 to1,899 1,500 to1,699 1,300 to1,499 Rent ($) 2010
2011
2012 Demand Units of 160
15 15 30 50 50 2013 - M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 20 Data Profiles Table DP-2. Table DP-1. Sources: U.S.CensusBureau;DepartmentofHousingandUrbanDevelopment;estimatesbyanalyst January 1,2014. and the12monthsthroughDecember2013.MedianFamilyIncomesarefor1999,2009,2012.Thecurrentdateis Notes: Numbersmaynotaddtototalsbecauseofrounding.Employmentdatarepresentannualaveragesfor2000,2010, * Minneapolis-St.Paul-BloomingtonHMA. Sources: U.S.CensusBureau;DepartmentofHousingandUrban Development;estimatesbyanalyst Notes: Numbersmaynotaddtototalsbecauseofrounding.The current dateisJanuary1,2014. Total resident employment Rental vacancyrate Owner vacancyrate Total housingunits Percent renter Rental households Percent owner Owner households Total households Total population Nonfarm payroll jobs Unemployment rate Total households Total population Owner households Renter households Percent owner Percent renter Owner vacancyrate Total housingunits Median FamilyIncome Rental vacancyrate Central SubmarketDataProfile, 2000toCurrent Minneapolis HMA*DataProfile, 2000toCurrent
1,627,235 1,706,082 1,748,300 1,136,615 2,968,806 1,169,775 675,272 227,854 429,511 657,365 823,289 313,326 $63,600 2000 2000 34.7% 65.3% 72.4% 27.6% 2.6% 0.5% 2.7% 0.6% 2.8% 1,699,439 1,697,700 1,272,677 3,279,833 1,354,973 1,661,065 908,905 363,772 $83,900 726,666 249,035 429,569 678,604 2010 2010 71.4% 28.6% 36.7% 63.3% 7.3% 7.6% 1.9% 7.5% 2.1% 1,732,000 1,785,000 1,796,000 3,402,000 1,312,500 1,381,000 Current Current 738,900 271,100 428,900 700,000 912,500 400,000 $83,900 38.7% 61.3% 69.5% 30.5% 5.4% 1.3% 4.9% 1.3% 5.5%
2000 to2010 2000 to2010 Average AnnualChange(%) Average AnnualChange(%) – 0.3 0.7 0.9 0.0 0.3 0.2 0.0 1.0 1.0 1.1 1.5 1.5 2.8 2010 toCurrent 2010 toCurrent 0.4 2.3 0.0 0.8 1.1 1.7 1.0 1.9 0.1 0.8 2.6 0.5 0.0 M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 21 Data Profiles Sources: U.S.CensusBureau;DepartmentofHousingandUrbanDevelopment;estimatesbyanalyst Notes: Numbersmaynotaddtototalsbecauseofrounding.ThecurrentdateisJanuary1,2014. Table DP-4. Table DP-3. Sources: U.S.CensusBureau;DepartmentofHousingandUrbanDevelopment;estimatesbyanalyst Notes: Numbersmaynotaddtototalsbecauseofrounding.ThecurrentdateisJanuary1,2014. Rental vacancyrate Owner vacancyrate Total housingunits Percent renter Rental households Percent owner Owner households Total households Total population Rental vacancyrate Owner vacancyrate Total housingunits Percent renter Rental households Percent owner Owner households Total households Total population
Continued Northern SubmarketDataProfile,Northern 2000toCurrent
Southern SubmarketDataProfile,Southern 2000 toCurrent
230,626 183,063 221,589 624,834 263,877 210,715 257,661 716,737 38,526 46,946 17.4% 82.6% 2000 2000 18.2% 81.8% 2.5% 0.7% 3.7% 0.6% 294,675 225,688 276,155 761,110 333,632 253,648 317,918 857,658 50,467 18.3% 81.7% 2010 64,270 2010 20.2% 79.8% 7.6% 1.8% 7.6% 1.6% 300,400 226,600 283,350 779,600 Current Current 342,200 256,900 329,050 890,700 56,750 20.0% 80.0% 72,150 21.9% 78.1% 6.2% 1.5% 5.3% 1.2%
2000 to2010 2000 to2010 Average AnnualChange(%) Average AnnualChange(%) 2.4 3.2 1.9 2.1 1.8 2.5 2.7 2.1 2.2 2.0 2010 toCurrent 2010 toCurrent 0.5 3.2 0.1 0.7 0.6 0.7 3.1 0.3 0.9 1.0 M inneapolis-St. Pau l-Bloomington, MN-WI • COMPREHENSIVE HOUSING MARKET ANALYSIS 22 in the residentialbuilding permits. Asaresult, the arenot reflected classified ascommercialstructures For building permit. example, someunits type of orareissued adifferent without abuilding permit orcreated in an HMA.Someunits areconstructed allresidentialbuilding activity thatoccurs reflect Building Permits: donotnecessarily Buildingpermits “other” vacant bytheCensus Bureau. specified as workers;by migrant andthecategory for seasonal,recreational,oroccasionaluse;used includes units rentedorsoldbut not occupied; held not available therefore forsaleorrent. Theterm other vacant units includeallvacant units thatare ing andUrbanDevelopment’s (HUD’s) analysis, Other Vacant Units:IntheU.S. Hous of Department or units in the developmentconstruction pipeline. estimates donot account forunits currently under the analysis, growth, losses, andexcess vacancies. The dateof forecast periodgiven conditions ontheas-of the3-year achieve abalancedmarketattheendof thetotalhousing production needed to estimates of building activity.are not aforecastof Theyarethe Demand: The demandestimatesin the analysis 28,2013. dated February changes defined bytheOMBBulletin not reflect the OMBBulletindatedDecember1,2009,anddoes Management andBudget (OMB)in by theOfficeof isbasedonthedelineationsestablished in thisreport The Metropolitan StatisticalAreadefinition noted Forecast period: 1/1/2014–1/1/2017—Analyst’s date:1/1/2014—Analyst’sCurrent estimates 2010: 4/1/2010—U.S. DecennialCensus 2000: 4/1/2000—U.S. DecennialCensus Data DefinitionsandSources estimates www.huduser.org/portal/ushmc/chma_archive.html For on othermarketareas, additionalreports pleasego to
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Department. insurance proposalsthatmaybeunder consideration by the determinations regardingtheacceptability ofany mortgage conditions andtrends.Theanalysisdoesnotpurporttomake mortgagees, andothersconcernedwithlocalhousingmarket findings, andconclusions mayalsobeusefultobuilders, ance ofHUDin its operations. Thefactualinformation, This analysis hasbeenpreparedfortheassistance andguid [email protected] 312–913–8014 Chicago HUDRegionalOffice Gabriel A.Labovitz, Economist Contact Information WI_14.pdf CMARtables_Minneapolis-St.Paul-BloomingtonMN- this HMA,goto For tothehousing marketfor additionaldatapertaining and multifamily building permits. single-family estimates areincludedin the discussions of activity. thisthese additional construction of Some analyst, throughdiligent fieldwork, makesanesti As such, findings orconclusions maybemodified bysub available ontheas-ofdatefromlocalandnationalsources. as thoroughandcurrent aspossiblebasedoninformation Market Analysis Division. The analysis andfindings are lines andmethods developedbyHUD’s Economicand The factualframeworkforthis analysis followstheguide economic andhousing marketconditions. officials whoprovideddataandinformation on local to those industry sourcesandstatelocalgovernment sequent developments. HUDexpressesits appreciation . www.huduser.org/publications/pdf/ . mate -
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