You've heard the bad news: Residential construction activity is at its lowest level in decades. So far this year the metro area is about 600 units shy of construction activity last year, according to data from the Builders Association of the Twin Cities. Despite those low numbers, Pulte Homes says that it's going to introduce five new projects this summer with a total of 177 home sites. It's all part of a broader effort by developers to snap up building sites, mostly in inner-ring suburbs, to take advantage of low prices and tight supply. Some builders say that buyers are stepping up to the plate for new houses that are close to the Twin Cities and in high-demand school districts. In particular, they're targeting smaller developments that were platted during the boom and are now selling for less that what it costs them to develop raw land. Here's what Pulte has on its plate:

  • Palmer Point in Minnetrista – Has direct access to Lake Minnetonka with boat docks and lake view sites and access to Zumbra Lake. Has 49 sites.
  • Hidden Bluffs in Bloomington – 40 sites in the same district as Jefferson High School.
  • Lone Lake Highlands in Minnetonka – 21 sites near Highway 62 and Interstate 494.
  • Fox Ridge in Arden Hills – 39 sites in the Mounds View School District.
  • Josephine Woods in Roseville – 28 sites with houses that will feature new "flex" floor plans that are the result of recent market research.

By the end of the year the company has plans to introduces seven new developments with a total of 208 lots to the market. That's a huge number considering that in 2008 the company didn't introduce any new developments. In 2009 the company opened two projects with 78 lots, and in 2010 it opened six projects with 194 lots.

Pulte's Minnesota division president, Marv McDaris, said that while the company's sales are down by about 20 percent from last year, sales are strong in certain locations. The tax credit, which expired at the end of April, increased sales last year and borrowed future demand. Because of the credit, many of last year's buyers were first-timers, this year they're move-up buyers, which means that though sales are down at Pulte, the average sale price is up considerably. This year he expects the average sale price to be in the $400,000's. But buyers are fickle - and picky - and so McDaris and others are being very careful when it comes to their speculative purchases. "There is a lot of pent up demand in certain parts of the market," he said. "But the market is pretty punititve, so if you make a bad choice, it's very difficult to recover from."