In another sign that the Twin Cities housing market is on the mend, the number of residential building permits issued last month grew 28 percent over November 2008. Permitted units were also 37 percent higher, according to numbers released Tuesday by the Builders Association of the Twin Cities.
But permits pulled for the month are still far lower than they were in 2005 to 2007.
November saw the highest number of units permitted for any month this year; total permits in November were the third-highest in 2009. Permits tend to increase in November because builders want to get foundations down before the ground freezes.
The numbers come one week after the Standard & Poor's Case-Shiller home price index showed that home prices in the Minneapolis-St. Paul area increased 1.8 percent in September. It was the third month in a row that the Twin Cities showed the greatest increase among 20 metro areas.
Still, prices in the Twin Cities are 11.2 percent below September 2008 levels. Housing experts fear a second wave of foreclosures in 2010 could super-size supply and sink prices once again. And so far this year, building activity is down 11.5 percent from 2008, half what it was in 2007 and nowhere near the frenzied activity in 2005.
"It's hard to say that the market is improving, but I think it's steadied," said Marv McDaris, division president for Pulte Homes. After not purchasing property for building in 2008, his company bought property in two locations earlier this year and purchased land in Maple Grove and Plymouth within the past two months.
McDaris says recovery will come with rising consumer confidence and a better job market because "ultimately job growth fuels housing."
So does free money. The pending expiration of the first-time home buyer tax credit "pushed a lot of sales and took some inventory off the market," association president Mike Swanson said. The $8,000 tax credit for first-time home buyers was ultimately extended through April and a $6,500 credit for move-up buyers was added.
McDaris estimates that 60 percent of home buyers who purchased Pulte and Centex homes in the past six months have been taking advantage of the tax credit. A recent forecast by housing market research firm Metrostudy said the credits "will continue to buoy sales somewhat," but not at the level seen in 2009.
Minneapolis had the most building activity for the month with 218 units, 175 of them for a single building project. Lakeville came next with 45 units. Blaine, Savage and Maple Grove pulled permits for 41, 29 and 28 units respectively.
Kara McGuire • 612-673-7293
