A cooling housing recovery hasn't made it any easier to find a spot to build a house in the Twin Cities. In fact, lot inventory is at the lowest level since since early 2007, according to a 2nd-quarter survey from the Twin Cities office of Metrostudy, a national real estate research company. There are now 20,690 vacant developed lots throughout the seven-county metro, 7.9 percent fewer than last year.

In his report, Chris Huecksteadt, regional director of Metrostudy's Minneapolis/St. Paul region, explains it this way: "The recent increase in new home demand has created a run on desirable vacant developed lots throughout the metro region. Lot supplies across the metro area are down to just 25.6 months, below pre-housing boom figures. As activity continues to increase we will need to see substantial lot deliveries across the metro in order to meet current demand."

Other hightlights from the report:

  • Almost 50 percent of all new homes started over the last 12 months were priced from $250,000 to $400,000 the largest percentage of starts in that segment since Metrostudy began tracking the market.
  • While more than 80 percent of all new starts are for single-family homes, rising price and a shortage of lots in the best locations will drive buyers into townhomes and other attached housing.
  • At the end of March, there were 2,769 new houses available for purchase, just 136 more than last quarter. Of that total, 2,035 (73 percent) were under construction, 486 (17 percent) were finished, but vacant and 248 (10 percent) are model homes.
  • At the current sales pace, the supply of new houses on the market would last 5.9 months, slightly below equilibrium levels of six to seven months. .