'The new construction industry looks favorable as the Twin Cities anticipates spring's thaw and a housing market that continues to improve.' ~ Home Destination
Minneapolis, Twin Cities Minnesota (PRWEB) February 19, 2015
Housing data from Northstar MLS is helpful for assessing where Twin Cities new home sales and real estate investments stand for spring's home buying season. New home construction in the metro area is ramping up for the seasonal spring demand of new homes.
"Anticipating an uptick in new home activity, residential home builders in the Twin Cities observe the cyclic supply and demand fundamentals of the Twin Cities real estate market," says Jenna Thuening, owner of Home Destination.
The National Association of Home Builders (NAHB) / Wells Fargo builder sentiment index announced Tuesday that on a national level, builders’ confidence slid to 55 in February from 57 in the previous month. Regardless, builders continue with an optimistic approach just a month prior to the opening of the spring buying season. NAHB forecasts that new construction of single-family homes will reach 802,000 units in 2015, a 26% gain compared to the 637,000 units projected for 2014. Additionally, 2016 is forecast to yield 1.1 million units.
Home builder sentiment readings atop 50 suggest that more builders view sales conditions as positive versus unfavorable. Lower rates for home loan applicants combined with solid improvements in job advancements over the past year, point to stronger sales.
Home builders' viewpoint in the Twin Cities for spring home sales and prospective buyer activity is positive, according to the Builders Association of the Twin Cities (BATC). Many are facing the upcoming season with a sense they are short of the number of construction workers needed to fill capacity of the expected increase in demand for new homes over the next six months. Demand from traditional home buyers is up and well as higher demand for smaller new homes from residential investors in Twin Cities housing and Millennial homebuyers.
In a BATC February 6th article, titled Huge Demand For Residential Construction Workers, the call for attendees at the Construction Job Fair anticipates a strong turnout. Residents in the Twin Cities nipped up newly built homes at a faster pace last year than home builders could construct them. This is a solid indicator that new home sales will climb higher this spring, and home builders in the Twin Cities are looking for sufficient help to meet demand.
January 2014 - January 2015 Homes For Sale in the Twin Cities by Construction Type - Current annual level of increases in new construction in the Twin Cities according to Northstar MLS:
- New Construction: 1,985 homes, which is up +21.6%
- Previously Owned Homes: 14,048, which is up +4.9%
- All Home Construction Types: 16,041, which is up +6.6%
Months Supply of Homes For Sale in the Twin Cities by Construction Type - Current annual level of Twin Cities Housing Stock according to Northstar MLS:
- New Construction: 6.8 homes, which is up +30.8%
- Previously Owned Homes: 3.6, which is up +5.9%
- All Home Construction Types: 3.8, which is up +8.6%
"When setting the pace for the number of new homes to build, metro builders take into consideration if they can sell the home in a reasonable period of time. It requires a skilled eye that can both track and know how to plan ahead of time for what supply and demand for new homes will be," reflects Thuening.
NAHB new home building permits running through December 2014 for the Minneapolis 13 County real estate area are: 11.35 in December 2014 vs. 11.92 in December 2013, which is a negative change of -5%.
While some builders may see a huge increase in demand, if the numbers go up at a gradual pace this year, it may be more manageable. Typical of the season in February, winter storms are suspect as the reason why home buyer traffic in the metro slowed.
About Home Destination - Twin Cities Real Estate:
Home Destination offers a loyal and committed real estate professional service that personally handles all of the details of selling or purchasing homes in the southwest metro of Minneapolis.. Helping all home buyer types, from individuals seeking to buy their first home to individuals purchasing investment properties, Jenna Thuening has the real estate experience and acumen buyers and sellers rely on. Read more about how Twin Cities home builders are ramping up for spring.