Twin Cities residential permits rise again in July | Finance ...

Posted: 3:26 pm Thu, July 26, 2012
By ?BRIAN JOHNSON
Tags: Curt Christensen, Herb Tousley, Kevin Locke, Keystone Report, Lee Lyn Construction, Southwest Corridor, Tim Gladhill, University of St. Thomas

The 192-unit 36 Park Apartments project is taking shape near 36th Street and Highway 100 in St. Louis Park. The city was among the metro area?s leaders in multifamily construction activity this month. (Staff Photo: Bill Klotz)

For signs that the Twin Cities housing market is starting to feel fit again, look no further than St. Louis Park.

In July, the city was among the metro area leaders in new housing activity with permits for 123 new housing units. It brings the city?s year-to-date total to 442 new units, up from just one new unit a year ago, according to the Keystone Report.

Kevin Locke, the city?s community development director, said the area?s close proximity to jobs and services, along with future amenities like a planned Southwest Corridor light rail station, are among the factors driving development.

?People are looking for more urban living than you get on the edge of the metro,? Locke said. ?That is working to our advantage because we have the location and goods and services and jobs that make it a good place to live.?

But St. Louis Park isn?t the only area that seeing a housing revival.

Overall in July, the 13-county metro area saw permits for 783 new housing units: more than twice the number of July 2011 (367). Year-to-date totals are up 71 percent: 3,902 compared with 2,278 a year ago.

The Keystone numbers are consistent with findings from the University of St. Thomas? Residential Real Estate Price Report Index, which has shown positive signs for the housing market for five months in a row through June.

Among the report?s findings: the median sale price for traditional single-family homes ? weeding out the foreclosures and short sales ? increased from $209,400 to $229,000 from January to June.

During the same time period, the volume of sales increased for homes at all price ranges ? an encouraging sign, because the higher-priced homes had been selling at a much lower rate than those under $140,000.

However, the report cautioned that sales volume and median prices tend to decrease in the second half of the year, and that the mortgage foreclosure crisis hasn?t been licked just yet.

Herb Tousley, director of real estate programs at the University of St. Thomas, said the year-over-year data looks good.

But Tousley cautioned that 2011?s housing numbers also looked strong in the first half of the year, only to be derailed in the second half by crises ranging from the federal debt-level ceiling debate to the financial troubles in Europe.

?It appears to be good right now,? he said. ?I will feel a lot better if we are having this conversation at the end of the year and we have stayed about the previous-year levels.?

The Keystone for July showed Ramsey leading the metro with two permits for 231 new housing units, a reflection of Flaherty & Collins Properties? $29 million, 230-unit Residence at the COR apartment project under construction in the COR district, formerly known as Ramsey Town Center.

Tim Gladhill, senior planner for the city of Ramsey, said crews began to work on footings for the project in June. The project has a 12- to 18-month construction period.

So far this year, Ramsey has issued 21 permits for 257 new dwellings, up from 13 and 13 a year ago.

Other projects in the works in Ramsey include Marshfield, Wis.-based First Phoenix Group?s planned 72-unit assisted living and memory care building on Highway 47 and Nowthen Boulevard, and a proposed 50-unit workforce housing project, Gladhill said.

Gladhill said the assisted living project is expected to start this summer.

Even without the large projects, the city still has ?substantially more? building activity than it did last year, Gladhill said, including permit applications in a couple of subdivisions that had little or activity a year ago.

Another key construction project in the city ? a new station for the Northstar commuter rail line ? complements the residential development. Gladhill said much of the framework is up for the station, which should debut in October or November.

In St. Louis Park, projects underway include Excelsior Group?s 120-unit West End apartments, E.J. Plesko & Associates? 192-unit 36 Park Apartments, and Greco Real Estate Development?s 115-unit TowerLight on Wooddale senior assisted living project.

Bader Development?s 58-unit e2 (Ellipse on Excelsior II) apartment building, and Union Land II LLC?s 100-unit Adagio Apartments at Hoigaard Village, are scheduled to begin later this year.

The 36 Park Apartments and TowerLight on Wooddale projects are both near Highway 100 and 36th Street, a redevelopment area that grew out of a city planning effort that dates to 2002.

Historically, the area was largely commercial industrial. But it?s sitting right at a future light rail stop, so the city worked with the neighborhood on long-term planning there, ?and that transformation is really taking root,? Locke said.

Elsewhere in the metro area, single-family construction activity took root.

Builders pulled 403 permits in the month, up from 254 a year ago. Blaine (35 permits, 35 units), Woodbury (23 permits, 34 units) and Plymouth (27 permits, 30 units) were among the leaders.

When the homebuilding boom was in full force, developers looked far beyond the core cites.

Now, ?a lot of people are trying to get back inside that beltway,? said Curt Christensen, owner of Lee Lyn Construction in Watertown and 2012 president of the Builders Association of the Twin Cities. ?You see that within the numbers.?

Christensen said low lot prices are a factor in the market, in addition to low interest rates and improving sale prices.

?I have seen lots anywhere from 50 to 70 to 80 percent off from what they were asking,? he said. ?That is making a big difference, too.?

This entry was posted on Thursday, July 26th, 2012 at 3:26 pm and is filed under Construction & Development, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Source: http://finance-commerce.com/2012/07/twin-cities-residential-permits-rise-again-in-july/

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