September 2005 Permit Statistics

10/5/2005

Residential Construction Activity Shows Slight Improvement
Activity for the month of September outperforms August, but is still down year-to-date

New residential permit statistics show a slight improvement over last month, but are off pace from a year ago and still down year-to-date according to recent data. Planned units and permits issued for the month of September were the fourth best month of 2005 thus far in the year, yet still below the 5-year averages.

In four weeks of September, there were 814 permits issued for 1,445 planned units at a value of $286,976,283. Compared to September 2004, this is roughly seven percent less than the 874 permits, 12 percent less than the 1637 planned units, and about three percent less than the value of $294,531,809. Compared to the previous six years, permits are about 21 percent behind 2003, less than three percent behind 2002, three percent behind 2001, three percent less than in 2000, roughly 20 percent less than 1999, and almost seven percent behind 1998.

In planned units, September 2005 is almost 12 percent less than 2004, about 11 percent less than 2003, roughly 2 percent ahead of 2002, almost 30 percent ahead of 2001, 32 percent ahead of 2000, five and a half percent less than 1999, and 12 percent ahead of 1998. The value of permits issued in four weeks of September 2005 is about three percent less than the value issued in September 2004, but is considerably higher than in other points during the last six years.

Year-to-date in 2005, the total number of permits issued remains behind every year in the previous seven. Year-to-date, the region has issued 7,655 permits for 13,153 planned units at a value of $2,422,911,048. In permits, this is nine percent behind 2004, less eight percent behind 2003, three percent behind 2002, six and a half percent behind 2001, 14 and a half percent behind 2000, 18 percent behind 1999 and almost ten percent behind 1998. Planned units were six percent behind last year, five percent behind 2003, four percent ahead of 2002, 16 percent ahead of 2001, seven percent ahead of 2000, over two percent ahead of 1999, and 18 percent ahead of 1998. Value of permits year-to-date in 2005 was three percent behind 2004, and ranged from seven to 63 percent higher than in 1998 through 2003.

Attached or multi-family housing was over half of permitted units, with a total of 934, or 54 percent of the total planned units for the month (four weeks recorded). Year-to-date, the 6,520 multi-family units were at 50 percent of the 13,153 total units. This compares to multi-family units running at 52.7 percent annually for 2004, 48.6 percent in 2003, 43.7 percent in 2002, 41.5 percent in 2001, and 37.5 percent in 2000.

“This summer shows a continuation of a slowdown that began last year,” says Doug Nelson, 2005 President of the Builders Association of the Twin Cities and Owner of New Spaces, “and while it is obvious that overall numbers from this year display a slight downward trend, the market specifically seems to be shifting towards more multifamily, or attached housing. This is important to note, because this product tends to be less expensive on average than are single-family units, and attached units tend to be built nearer to major employment centers. With higher fuel prices and increased commuting times, the source of demand for this product is clear.”

Actual permit, planned unit, and value statistics for the first 39 weeks in each of the past eight years are as follows:

2005 — 7,655 permits, 13,153 planned units at a value of $2,422,911,048
2004 — 8,444 permits, 14,028 planned units at a value of $2,502,039,672
2003 — 8,346 permits, 14,028 planned units at a value of $2,258,513,497
2002 — 7,885 permits, 12,653 planned units, at a value of $1,988,175,274
2001 — 8,183 permits, 11,333 planned units at a value of $1,802,949,067
2000 — 8,949 permits, 12,277 planned units at a value of $1,797,478,832
1999 — 9,316 permits, 12,844 planned units at a value of $1,734,385,005
1998 — 8,473 permits, 11,132 planned units at a value of $1,485,350,154

For the month of September, Hugo had a strong showing for permits issued. Hugo (69 issued) took the top spot while Woodbury (39), Lakeville (39), Blaine (37), and St. Michael (35) rounded out the top five cities for permits issued.

Hugo also had the most planned units in the region during the month of September. Hugo (164), Woodbury (12), Minneapolis (101), Blaine (84), and Maplewood (84) were the top five cities in planned units.

During the first 39 weeks of 2005, the same top ten cities consistently rank in permits issued. In year-to-date permits, Woodbury remained in first with 439, Shakopee held on to second with 313, Hugo moved up to third with 289, Blaine fell to fourth with 276, and Brooklyn Park dropped to fifth with 269. In planned units Woodbury took the top spot with 716, Brooklyn Park fell to second with 704, Minneapolis held onto third with 619, Hugo moved to fourth with 577, and Shakopee fell to fifth with 555.

The Builders Association of the Twin Cities has contracted with Keystone Report, a local research firm, to maintain a database with information about new residential construction permits around the metropolitan area. After the builder has picked up the permit from a city, Keystone Report compiles and updates weekly residential housing permits by city for 70 percent of the metropolitan-area municipalities within the 11-plus county region. Planned units are the total number of housing units planned to be built under the permits issued (one permit is issued per building which may include more than one housing unit). Permit value does not include the land/lot costs. The reporting period for August compares statistics over four weeks, while year-to-date figures cover the first 34 weeks of the year.

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