Where are the homes? MSP has undersupplied housing market

Though homebuilders in the Twin Cities are now busier than they've been in a decade, housing construction is still far below peak. That's especially true for entry-level houses priced from $200,000 to $350,000. (Jim Buchta, Star Tribune)

This is a long-term problem, and it’s real.
— David Siegel, Executive Director at the Builders Association of the Twin Cities

At issue, is a problem seen nationwide, but especially in the Twin Cities metro: the burdensome costs of regulation. Municipal fees typically make up 25%-30% of the cost of an average new home. That's nearly 1/3 of the cost!

And then you add into the mix: construct costs, labor, materials and land that are outpacing price and income gains. All of this creates an equation that causes a growing rift between new construction and existing homes.

Most homebuilders would like to build product for a majority of consumers, at your entry-level to middle-class tier. However, that is getting more and more difficult.

I want to build homes for everybody, but there are certain situations that limit our ability to do so. Some of it [is] just simple economics. There’s not as much land to build on in the places where people want to live. It’s a matter of supply and demand.
— Graham Epperson, Division President at Pulte Group

For the full article from the Star Tribune, click here.

Dawnita Parmely