Byline: Brian Johnson
Permit activity for construction of single-family homes in the Twin Cities is off to a hot start, but planned multifamily units in January are down from year-ago levels, according to the Keystone Report.
Shrugging off the arctic weather, builders pulled permits for 440 single-family houses in the 13-county metro area, a 9.5 percent increase from January 2018, the report says. That's the biggest permit count for any January in more than a decade.
Despite the surprisingly robust single-family numbers, new housing units permitted in January were down 18.5 percent overall, as builders pulled only three permits for projects with more than 16 units.
Overall in January, cities in the 13-county metro area issued 459 permits for 749 new housing units. Permits are up 8 percent, and planned units are off 18.5 percent. That includes 309 new multifamily units, down 40 percent.
The permits have a combined value of $182.17 million, which is even with January 2018.
David Siegel, executive director of the Builders Association of the Twin Cities and Housing First Minnesota, said the surge of single-family permits in January is a good sign. Even so, a lot more needs to be done to meet future demand for housing, he said.
Siegel referred to the a "housing task force" report released last August by then-Minnesota Gov. Mark Dayton. Among other findings, the report said Minnesota needs 300,000 new homes of all types and prices by 2030.
"We are not addressing the supply challenge in the marketplace," said Siegel, who predicted that the market for townhomes will continue to grow as builders try to meet the demand for affordable new housing.
Siegel said he's hearing from lumberyards that they are selling less "board feet" per housing unit permitted, which is a strong indication that builders are going with smaller units to bring their prices down.
Looking at the big picture, Siegel said the year ahead is uncertain, though builders were encouraged by the Federal Reserve's announcement this week that it's holding off for now on raising interest rates.
"The general consensus forecast for the year is a flat year, pretty much on par with 2018," Siegel said. "It will be up and down throughout the year and we will probably end up somewhere close to where we were" in 2018.
Herb Tousley, director of real estate programs at the University of St. Thomas, isn't reading too much into the January numbers on...