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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% 213% 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:Minneapolis Area Association of Realtors,Economic&P tanning Systems,ffic.,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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