Minneapolis-St. Paul-Bloomington Minnesota-Wisconsin
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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 Summary Continued 2 Table 1. Housing Demand in the Minneapolis HMA* During the 3-Year Forecast Period Minneapolis Central Southern Northern HMA* Submarket Submarket Submarket Sales Rental Sales Rental Sales Rental Sales Rental Units Units Units Units Units Units Units Units Total demand 23,050 14,155 9,150 11,800 9,275 1,825 4,625 530 Under construction 2,155 8,895 1,025 7,975 690 380 440 540 * Minneapolis-St.Paul-Bloomington HMA. Notes: Total demand represents estimated production necessary to achieve a balanced market at the end of the forecast period. Units under construction as of January 1, 2014. A portion of the estimated 33,000 other vacant units in the HMA will likely satisfy some of the forecast demand. The forecast period is January 1, 2014, to January 1, 2017. Source: Estimates by analyst ANALYSIS Economic Conditions conomic growth in the Min- downturn, which began in January E neapolis HMA, which began 2008 and lasted through July 2010, in the summer of 2010, increased was less severe in the Minneapolis during the past year. During 2013, HMA compared with other major nonfarm payrolls increased by 32,900 Midwest metropolitan areas and the jobs, or 1.9 percent (Table 2), after United States because of a diverse an increase of 27,900 jobs, or 1.6 per- economic base. Only the information cent, during 2012. With a current COMPREHENSIVE HOUSING MARKET sector reported a decline in the number level of 1.8 million nonfarm payroll of jobs in 2013, when employment jobs, the Minneapolis HMA has fully decreased by 100 jobs, or 0.3 percent. recovered to the nonfarm payroll All other nonfarm sectors reported in- peak from 2007. The local economic creasing payrolls. The unemployment Table 2. 12-Month Average Nonfarm Payroll Jobs in the Minneapolis rate in the Minneapolis HMA peaked HMA,* by Sector during 2009 at 7.9 percent, lower than 12 Months Ending peak average rates reported in other Absolute Percent December December Change Change major Midwest metropolitan areas 2012 2013 and in the nation, which had a peak Total nonfarm payroll jobs 1,763,500 1,796,400 32,900 1.9 unemployment rate of 9.6 percent in Goods-producing sectors 238,500 245,200 6,700 2.8 2010. The unemployment rate aver - l-Bloomington, MN-WI • Mining, logging, & construction 57,600 62,500 4,900 8.5 u Manufacturing 181,000 182,700 1,700 0.9 aged 4.9 percent during 2013, down Pa Service-providing sectors 1,525,000 1,551,200 26,200 1.7 from 5.5 percent during 2012. Figure 1 Wholesale & retail trade 253,700 257,600 3,900 1.5 presents trends in the labor force, resi- Transportation & utilities 62,000 62,100 100 0.2 Information 38,800 38,700 – 100 – 0.3 dent employment, and the unemploy- Financial activities 140,400 141,700 1,300 0.9 ment rate from 2000 through 2012. Professional & business services 271,800 275,200 3,400 1.3 Education & health services 284,400 295,800 11,400 4.0 During 2013, the education and health Leisure & hospitality 163,500 167,200 3,700 2.3 services, the mining, logging, and Other services 76,700 77,700 1,000 1.3 inneapolis-St. Government 233,600 235,100 1,500 0.6 construction, and the wholesale and M * Minneapolis-St.Paul-Bloomington HMA. retail trade sectors added the most Notes: Numbers may not add to totals because of rounding. Based on 12-month aver- jobs in the HMA, increasing by 11,400, ages through December 2012 and December 2013. Source: U.S. Bureau of Labor Statistics Economic Conditions Continued 3 4,900, and 3,900 jobs, or 4.0, 8.5, and and includes 4 of the 10 largest em- 1.5 percent, respectively. The education ployers in the HMA (Table 3). Job and health services sector, which ac - growth in the education and health counts for approximately 16.5 percent services sector was almost entirely in of nonfarm payrolls in the HMA the healthcare and social assistance (Figure 2), is the largest payroll sector industry. Among Minneapolis HMA healthcare providers, UnitedHealth Figure 1. Trends in Labor Force, Resident Employment, and Unemploy- expects to complete a $200 million ment Rate in the Minneapolis HMA,* 2000 Through 2012 expansion of its corporate campus in 10.0 2,020,000 Eden Prairie in 2016. Allina Health 1,920,000 8.0 and Children’s Hospitals opened the ANALYSIS Mother Baby Center in Minneapolis 1,820,000 6.0 early in 2013 at a cost of $50 million, 4.0 1,720,000 and Allina Health, Mercy Hospital Labor force and Labor force 2.0 1,620,000 Unemployment rate resident employment resident invested $22 million in a new 120,000- 1,520,000 0.0 square-foot facility in Coon Rapids, 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 which is expected to be complete in Labor force Resident employment Unemployment rate the spring of 2015. Fairview Health * Minneapolis-St.Paul-Bloomington HMA. Services, which is expanding in Burns- Source: U.S. Bureau of Labor Statistics ville, will build a new 130,000-square- Figure 2. Current Nonfarm Payroll Jobs in the Minneapolis HMA,* foot medical office building and a by Sector 23,000-square-foot hospital expansion, Mining, logging, & construction 3.5% with approximately $64 million in Government 13.1% Manufacturing 10.2% development costs. In late 2013, the Other services 4.3% University of Minnesota approved COMPREHENSIVE HOUSING MARKET Wholesale & retail trade 14.3% construction of a $160 million out- Leisure & hospitality 9.3% patient health center, which is expected to open in 2016. The growth reported Transportation & utilities 3.5% in the mining, logging, and construc- Information 2.2% Education & health services 16.5% tion sector is predominately because Financial activities 7.9% of increased employment levels among Professional & business services 15.3% specialty trade contractors and con- * Minneapolis-St.Paul-Bloomington HMA. struction jobs, which have been increas- Note: Based on 12-month averages for each sector through November 2013. ing since the economy began to recover Source: U.S. Bureau of Labor Statistics during 2010. Job growth in the trade Table 3. Major Employers in the Minneapolis HMA* sector was approximately 70 percent l-Bloomington, MN-WI • Number of in the retail trade subsector and the u Name of Employer Nonfarm Payroll Sector Employees balance in the wholesale trade sub- Pa State of Minnesota Government 53,800 sector. The Mall of America, in Bloom- Target Corporation Wholesale & retail trade 30,750 ington, includes more than 500 retail University of Minnesota Government 25,150 Allina Health Education & health services 23,850 stores with 11,000 year-round em- Wal-Mart Stores, Inc.