While 2015 was a pretty robust year for the Twin Cities real estate market, new construction is already off to a slower start in the early part of 2016. Over the course of this month, housing construction in the Minneapolis-St. Paul area has fallen to a 12-month low, with only 286 permits used to develop 371 housing units. Compared to 2015, that’s an 18% drop in permits, according to data from the Keystone Report for the Builders Association of the Twin Cities.
Nonresidential construction is seeing a much more substantial decline in activity and according to Dodge Data & Analytics, the 13 county metro area that makes up the Twin Cities region saw commercial construction drop 64% from nearly $111 million in 2015 to just $39.9 million in January 2016.
In all, the drop in residential construction represents about a 16% decline compared to last year and the total decline between both residential and commercial development is about 33% in the month of February. Local builders and developers still have a positive outlook for 2016, however, in part because borrowing conditions are continuing to improve and mortgage rates are still at record lows.
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