Construction activity in the Twin Cities metro area plunged in March, but housing permits trumped apartments, a sign that the spring housing market is offering some hope to sales-starved builders.
During the past four weeks 155 permits were issued to build 201 units -- a 34 percent decline in permits and a 73 percent drop in units, according to the Builders Association of the Twin Cities. Of those planned units only 24 percent are multi-family housing, mostly rental apartments and senior housing.
The shift to houses is something of a departure. During much of the past year, multifamily housing represented nearly 50 percent of all permits, though that has declined in recent months.
While the construction industry is still battling the worst downturn since the Great Depression and new home sales are barely puttering along, home builders say that more people are touring new houses on the Parade of Homes spring preview than last year, and some are even buying.
"More people are coming in and saying, 'I've just sold my house.' I haven't heard that in a long time," said Steve Logan, vice president of finance for the Minnesota division of Canada-based Mattamy Homes. His company sold 30 houses in 30 days over the past month, the best in two years.
Foot traffic during the annual Parade of Homes, which is sponsored by the builders association, is closely watched by builders because the event is often an indication of how sales will develop during the coming year.
Wendy Danks, the association's marketing director, said traffic is up based on the number of tickets they've sold to tour two "dream homes." The Parade is free, but the group charges $5 for a tour of the houses as a fundraiser for its foundation. She said that as of last week they had sold more tickets than they did during all of last year's Parade.
Edina Realty sales agent, Gary Judson, who is staffing a model house at the Bluffs of San Pierre in Bloomington, agrees, but said that many visitors are just tire-kickers.