New Construction at Fastest Rate Since 2007

Real Estate Week in Review

Buyers should continue to see great rates in the months ahead, as the Federal Reserve has indicated they are unlikely to raise interest rates in June (Fed minutes indicate June rate hike unlikely, CBS News).  At April’s meeting, policy makers were divided on if the winter’s weakness would continue, but most agreed that June would be too soon for the hike. The average US rate on a 30-year mortgage went down to 3.84%, while the 15-year loan rate went to 3.05 (Star Tribune Your Money).  Mortgage rates remain at historic lows: this time last year, the 30-year rate was at 4.14% while the 15-year rate was at 3.25%.

US existing home sales were down 3.3% in April, reflecting a shortage of listings and higher prices (Star Tribune). The number of listings was down .9% in April from a year prior. Demonstrating the advantage for sellers, the median home sold in 39 days (with this area seeing many lower market times, often in a matter of days).

home builder clipartHowever, new construction has surged to its fastest rate since 2007. CBS MoneyWatch reports: “Residential homebuilding jumped in April to the fastest pace in nearly seven-and-a-half years, signaling the economy is pulling out from its weather-related struggles in recent months. The Commerce Department said Tuesday that housing starts last month increased 20.2 percent to a seasonally adjusted annual rate of 1.14 million homes. That pace ranks as the fastest clip since November 2007.”

Around the Cities

CHS Field in Lowertown held their grand opening this week. The new home of the Saint Paul Saints has many features benefitting the community: for instance, it’s green, serves local food and beverages, and was designed and built by local companies (9 Things to Know about CHS Field, Minneapolis St Paul Business Journal).

Lakefront Hotels are making a comeback at Lake Minnetonka, with projects proposed in Wayzata and Excelsior. Says Steve Bohl, the developer of Wayzata’s hotel: “Lake Minnetonka was all about hotels. Now we’re going to be the first back,” said Steve Bohl, the developer of Wayzata’s hotel. “It just brings a legacy back in the market.” The hotel is estimated to draw 22,000 to 25,000 visitors each year, already with inquiries for events including weddings and meetings.

Also in Tourism news, Treasure Island Resort and Casino is planning a $19 million expansion. The 40,000 square foot project will include swimming pools, water slides and outdoor patios.

Excelsior Marketplace is nearing completion, anchored by a Kowalski’s grocery. Grocery-anchored marketplaces are a trend right now in the Twin Cities. “The grocery business is changing so much,” Ryan said. “To have a smaller, more neighborhood type of offering with high-quality produce and meat — yet in a smaller footprint — is very inviting. The organic play is an important part of this industry, too. The Kowalski organization is a leader in that field. The city is fortunate to have them as part of the community. We think it is going to be a spectacular fit.” See more here.

Indeed Brewing, the popular Northwest Minneapolis craft brewery is also planning an expansion, to include another taproom and a gift shop. “The demand for taprooms has grown like crazy and ours has only gotten busier,” co-founder Tom Whisenand said.

This Memorial Day

Miller Grossman would like to take a moment to salute our service men and women who have made the ultimate sacrifice this Memorial Day. Our thoughts are with their families and loved ones. Thank you.

Image from 123rf.com

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