Construction activity in the Twin Cities metro area continues to limp along at about half the pace of last year, according to data released Thursday by the Builders Association of the Twin Cities.
During July, 255 permits were issued to build 650 units. That's a 42 percent decline in the number of permits and a 33 percent decline in the number of new units. So far this year, the number of permits and planned units were down nearly 50 percent.
New houses haven't stopped selling, but home builders have virtually stopped building anything that hasn't already been sold -- they're still focused on reducing inventories of unsold houses that were built during the market's heyday.
A report from Metrostudy, a company that tracks housing inventories, shows that, during the second quarter of this year, the number of new unsold houses was down 32 percent compared with the same time last year, leaving the supply of unsold homes at 3.8 months.
With the real estate market taking a breather, the rental market has perked up, and many companies are focusing on building apartments, which are increasingly in short supply.
More than a third of the planned units last month were to build two large multi-unit buildings in Bloomington, which hasn't made an appearance on the top-five list all summer.
On Thursday, GVA Marquette Advisors released a report showing that demand has outstripped recent increases in the supply of new apartment units in the metro area. The vacancy rate during the second quarter fell to 3.7 percent, from 3.9 percent a year ago. That decline in available units caused monthly rents to rise 3 percent on average over the past year, to $910 during the second quarter.
JIM BUCHTA
