A short trip through downtown Minneapolis provides enough evidence to suggest a building boom, what with all the construction cranes and related activity. Some data released by the city on Tuesday appears to prove it.
This week, the city surpassed the $1 billion mark in construction projects for 2014. This is the third consecutive year that Minneapolis has reported more than $1 billion in construction projects approved since 2000. This is based on the value of permits issued for the year.
However, last year, the $1 billion mark was reached in October. And, the city said with additional submissions for development pending, there is a "high potential" for reaching the $2 billion mark this year.
"Driven by a high level of investment in commercial development, including the new stadium, and multi-family housing developments, the $1 billion in construction permits approved so far this year, speaks to our commitment to working towards creating a more vibrant Minneapolis that attracts increased investment and residents alike to the city," Minneapolis Mayor Betsy Hodges said in a statement.
Below is the total valuation of building permits in Minneapolis since 2000:
2000: $1.142 billion
2001: $975.8 million
2002: $889.2 million
2003: $852.2 million
2004: $944.7 million
2005: $855.2 million
2006: $839.6 million
2007: $761.3 million
2008: $772.5 million
2009: $778 million
2010: $547.6 million
2011: $752.8 million
2012: $1.118 billion
2013: $1.211 billion
2014: $1.211 billion (Aug. 14, 2014)
Much of the activity is in the eastern stretch of Downtown Minneapolis, with the new Vikings stadium and Ryan Cos.' proposed mixed-use development, Downtown East. Those two projects total more than $460 million to date in total valuation of building permits. The city said additional construction permits will be pulled from the two developments as they progress.
The construction boom for residential housing continues with permits issued for 1,488 dwelling units (single- family homes, new rental apartments and apartment conversions, and new condominiums) to date this year. In 2013, 3,552 dwelling units were permitted, an increase of 249 units over 2012 levels and 2,936 units from 2011.
The number of apartment/condo units permitted in Minneapolis from 20011-2014 is as follows:
2014: 1,543 (Jan. 1 – June 30)
Here are the top five 2014 construction projects by building permit valuation in Minneapolis include the following.
The Wallet Hub personal finance website has released this year's "Best & Worst Cities for First-Time Homebuyers." On this list, Minnesota doesn't rank all that highly.
WalletHub assessed the affordability of homes and conditions of the real estate market and community environment, in general. Seventeen key metrics, ranging from median house prices and real estate taxes to median home price appreciation and price-to-rent ratios were used.
Of the 300 largest U.S. cities, the No. 1 city for first-time homebuyers is Broken Arrow, OK. The worst city was Richmond, Ca.
St. Paul ranked 201, and Minneapolis was 208.
The survey is here.
Cash sales in made up 34.4 percent of all home sales in the U.S. during May, the lowest share since May 2010 and down from 37.4 percent from the same month a year ago, according to CoreLogic. In Minnesota, cash sales represented 25 percent of all closings.
Those cash deals been falling since January 2013. But prior to the housing crisis, the cash sales share of total home sales averaged about 25 percen after peaking in January 2011 when cash transactions made up 46.2 percent of total home sales.
Who's paying cash? Buyers of real estate owned (REO) listings were most likely to pay cash, the represented about 55 percent of all deals. Buyers of existing houses paid cash 34 percent of the time and short sales represented 32.8 percent of all deals. New home buyers paid cash only 16.8 percent of the time.
Here's where cash sales were most common:
Nearly 2,000 new apartments hit the market in the Twin Cities metro so far this year, but there were plenty of renters to fill those spaces. The average vacancy rate in the metro during the second quarter was 2.7 percent compared with 2.6 percent during the previous quarter and 2.3 percent last year, according to a second-quarter report from Marquette Advisors.
Most of those new units were upscale luxury apartments, boosting the overall average market rent to $1,004, a 2.6 percent year‐over‐year increase.
All eyes have been on downtown Minneapolis, where 601 new units - or 30 percent of all new construction - hit the market during the first half of the year, boosting the average vacancy rate to 5.7 percent from 5 percent during the previous quarter and 3 percent a year ago.
Looking forward, another 1,000-plus units are expected to come online during the last half of 2014, followed by more than 800 during 2015. We're working on a full report on this topic for the Thursday paper.
Last month, we attended a groundbreaking for the new $60 million North Loop headquarters for Be the Match, a nonprofit that promotes bone marrow and umbilical-cord blood transplantation. We wrote about it here.
About 900 employees will ultimately move into the seven-story office building, across from the renovated Ford Center, the new Target Field Station transit hub, and Target Field itself.
On Wednesday, U.S. Bank and developer United Properties closed on a $61 million construction loan for the project, which is slated for completion late next year.
“Target Field and the light-rail expansion have proven to be catalysts for growth in downtown Minneapolis, particularly in the North Loop neighborhood,” said Joseph Hoesley, vice chairman for U.S. Bank Commercial Real Estate, in a statement. “We expect this project to have a ripple effect tapping into the potential for additional retail and residential development in the surrounding area.”
Minneapolis-based Be The Match will lease the space from Bloomington-based United Properties.
“This development has been highly-anticipated by downtown Minneapolis’ business and civic communities,” said Frank Dutke, United Properties' president.