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The average price for a new home in the Twin Cities area was $376,000 in 2011, as shown in
<br />Table 4-3. The price for new single family home is up slightly from the average price found in
<br />2005 but down $60,000 (13.7 percent) from the 2007 peak of $436,000. The average price for a
<br />previously owned single family home in the Twin Cities area was $202,000 in 2011, which was
<br />down $93,000 (31.5 percent) from the 2006 high of $295,000. The average price for previously
<br />owned townhomes decreased 36.0 percent and condos prices were down 25.2 percent from 2005.
<br />The average price for previously owned homes has not rebounded from the drop in prices that
<br />started in 2006. Average home prices in 2010 were up from the 2009 average, but dropped again
<br />in 2011. It appears that the average home prices in the Twin Cities area have reached bottom
<br />and are beginning to recover. Average sales prices for newly constructed units have been
<br />increasing, but new homes sales accounted for only six percent of all sales in the Twin Cities
<br />area in 2011.
<br />Table 4-3
<br />TWIN CITIES AREA AVERAGE HOME PRICE; 2005 TO 2011
<br />% Change
<br />2005 2006 2007 2008 2009 2010 2011 2005-2011
<br />New Construction
<br />Single Family Detached $ 372,138 $ 415,435 $ 436,211 $ 422,106 $ 351,589 $ 356,803 $ 376,418 1.2%
<br />Annual%Change --- 11.6% 5.0% -3.2% -16.7% 1.5% 5.5%
<br />Townhouse $ 249,135 $ 237,139 $ 235,094 $ 229,720 $ 195,671 $ 200,507 $ 203,143 -18.5%
<br />Annual % Change --- -4.8% -0.9% -2.3% -14.8% 2.5% 1.3%
<br />Condo $ 265,124 $ 285,194 $ 280,167 $ 339,799 $ 348,884 $ 286,442 $ 333,926 26.0%
<br />Annual%Change --- 7.6% -1.8% 21.3% 2.7% -17.9% 16.6%
<br />Previously Owned
<br />Single Family Detached $ 289,741 $ 294,999 $ 289,067 $ 238,439 $ 203,968 $ 221,595 $ 202,119 -30.2%
<br />Annual % Change --- 1.8% -2.0% -17.5% -14.5% 8.6% -8.8%
<br />Townhouse $ 206,116 $ 203,337 $ 206,337 $ 176,992 $ 149,256 $ 150,735 $ 131,824 -36.0%
<br />Annual%Change --- -1.3% 1.5% -14.2% -15.7% 1.0% -12.5%
<br />Condo $ 173,922 $ 174,327 $ 176,338 $ 166,216 $ 140,297 $ 138,975 $ 130,103 -25.2%
<br />Annual % Change --- 0.2% 1.2% -5.7% -15.6% -0.9% -6.4 %
<br />Source Mmneapohs Area As soaarion ofRealtors ,Economic&Plannmg Systems, Inc , and McComb Group, Ltd
<br />APARTMENT MARKET
<br />The Twin Cities area apartment market is recovering much faster than the for -sale market locally
<br />and nationally. The apartment vacancy rate in the Twin Cities area was 2.4 percent in mid-2011,
<br />which is considerably lower than the national average and down from over 5.0 percent in 2009.
<br />The Northwest Suburban submarket, which includes the Northstar Corridor, had a vacancy rate
<br />of 2.7 percent in the 2nd Quarter of 2011 and the average rent price was $907 per month, which is
<br />slightly lower than the area wide average. The vacancy rates in downtown Minneapolis and
<br />downtown St. Paul were 1.2 and 0.8 percent, respectively, in 2011, as shown in Table 4-4. This
<br />drop in vacancy rate has lead to a steady growth in rental rates. The Twin Cities area average
<br />rental rate was $921 per month in the 2nd Quarter of 2011, which is up from $908 at the end of
<br />2010. Low vacancies and rent growth are spurring new construction.
<br />According to the Cassidy Turley real estate brokerage firm, in the 2nd Quarter of 2011 the
<br />Northwest Suburban submarket had 1,060 apartment units proposed. The Twin Cities area had
<br />8,593 proposed units and 1,814 units that were under construction. The proposed units in the
<br />Northwest Suburban submarket (including the Northstar Corridor) were 12.3 percent of the Twin
<br />Cities area total. Over 70 percent of the proposed units are within the cities of Minneapolis and
<br />4-4
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