The demand for new homes in the Twin Cities metropolitan area partly drove the level of construction to its faster rate since 2005.
As the pace of construction rises, so do home sales and prices in some part of Minnesota. Custom home builders like Homes by Tradition and other developers seem to be benefitting from a continually increasing demand for residences statewide.
Compiled data from the Keystone Report for the Builders Association of the Twin Cities (BATC) showed that homebuilders acquired 477 construction approvals for 1,208 units in April, up 25% and 53% compared to 2005 figures.
The situations, however, cast a huge light on the persistent problem in the region: a lack of supply for existing properties, according to BATC Executive Director David Siegel. The need for building new homes, particularly those on the low-cost side, remains a significant challenge since demand continues to outpace supply amid increasing prices.
Home sales and prices in the Twin Cities residential property market increased at the same time that rate of construction is currently on an upward trend. According to the Minneapolis Area Association of Realtors (MAAR), closed transactions rose 8.3 in March year over year.
On the other hand, property sellers struck deals at an average of 98.1% of their original prices, implying that negotiations for prices remain almost impossible. Still, buyers continued to be interested in snapping up homes as indicated by their adjustment to higher costs of loans, MAAR President Cotty Lowry said.
If you’re a property seller, now is probably the best time to sell homes while demand remains strong and you have the upper hand in pricing your property. For buyers, competition will likely continue to be tight because of a tight inventory. Still, the pace of new home construction in the Twin Cities area provides some relief to this problem.