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Market Report I December 2024 <br />Minneapolis -St. Paul - <br />Bloomington, MN -WI <br />Minneapolis became the first major U.S. city in 2019 to end single-family exclusive zoning, allowing for <br />more multifamily housing development. The "Minneapolis 2040" plan has led to a 12% growth in <br />housing stock in the city over the past 5 years, compared to 4% statewide. The plan faced significant <br />controversy, with some residents opposing the increase in density and multifamily buildings in their <br />neighborhoods. However, supporters argue the plan has helped increase housing supply to meet <br />demand and make living more affordable in the city. Estimated residential building permits are up <br />slightly in 2024 as multifamily permits boost new construction. <br />Strengths <br />Since 2015, when the city began to scale <br />back parking minimum requirements, the <br />number of high -density housing has <br />exploded. Even as the overall number of <br />residential permits is settling lower, <br />multifamily permits account for a <br />majority of new housing. <br />Weaknesses <br />Minneapolis has seen rents decline by 4% <br />over the past 5 years, bucking the <br />national trend of 22% rent increases. The <br />gap between renting and owning could <br />limit demand for new homes, especially <br />given the price disparity between new <br />and existing homes. <br />X Zonda_ <br />Minneapolis -St. Paul -Bloomington, MN -WI <br />New Home Pending Sales Index <br />YOY Change MOM Change <br />5.6% T 5.2% T <br />120 <br />80 <br />40 <br />0 <br />-40 <br />-80 <br />Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct <br />2023 <br />Valuation Patterns <br />2024 Valuation <br />25.9% Overvalued <br />al Home Price MI Income Supported Price <br />$480k <br />$400k <br />$320k <br />$240k <br />S160k <br />2024 <br />r <br />s/ • <br />• <br />2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024E 2026F <br />Dec. 31, 2024 <br />1/6 <br />