Is this a bad sign for MSP Economy? (Minneapolis, St. Paul: for sale, 2015)

[rstzATX]

We've been strongly considering relocating to MSP from Austin, TX at some point in the future. Saw this and starting to get concerned about future MSP economy. They can't build enough high dollar condos in Austin, TX because the demand is so high in downtown Austin. Thoughts?

Developers cancel North Loop Minneapolis condo project - Minneapolis / St. Paul Business Journal

[BryaninMSP]

One developer cancelling a project isn't much of a concern to me when almost all of the suburbs I sell in are facing severe inventory shortages.

[tjasse]

There's actually tons of condos already in that area, and a building almost exactly like that further down the road, in the Gold Medal Park area. IMO the expensive condo market probably has enough inventory relative to the MN population interested in living in an expensive condo.

[jennifat]

Originally Posted by rstzATX

We've been strongly considering relocating to MSP from Austin, TX at some point in the future. Saw this and starting to get concerned about future MSP economy. They can't build enough high dollar condos in Austin, TX because the demand is so high in downtown Austin. Thoughts?

Developers cancel North Loop Minneapolis condo project - Minneapolis / St. Paul Business Journal

LOL. Have you been to the Twin Cities recently? There are several dozen infill projects (some of them quite significant with hundreds of units) currently under construction, and dozens more in the pipeline.

The Twin Cities are currently experiencing a massive apartment boom bigger than the city has ever seen before, although our last condo boom was back in the mid-aughts before the recession. Condos aren't really marketable at the moment, which is why I'm not surprised this project fell through.

That being said, the North Loop is probably the hottest neighborhood in the Twin Cities right now for redevelopment. Apartments are going up right and left.

[emcee squared]

I think that condo was too high priced for the amenities it offered. The North Loop is still booming, though.

I remember hearing there were only 50 or so condos for sale in downtown not too long ago.

[Glenfield]

Originally Posted by emcee squared

I think that condo was too high priced for the amenities it offered. The North Loop is still booming, though.

I remember hearing there were only 50 or so condos for sale in downtown not too long ago.

These were overpriced. It has nothing to do with the economy in the Twin Cities. That was a sour grapes quote from one of the two developers.

[northsub]

I would expect the housing construction to fall significantly in Minneapolis from 2012 and 2013 levels.

In 2012, Minneapolis permitted 3,303 units.
In 2013, Minneapolis permitted 3,322 units.
In 2014, Minneapolis permitted 1,959 units.
Through February in 2015, Minneapolis permitted 19 units.
Through February in 2014, Minneapolis permitted 64 units.
Through February in 2013, Minneapolis permitted 101 units.
Through February in 2012, Minneapolis permitted 403 units.

2012 and 2013 represented permit numbers that were vastly beyond anything Minneapolis had seen since 1996 (the oldest data I can find). I suspect that is totally unsustainable. It also should be pointed out that 2014 was the third highest permit number year for Minneapolis since 1996.

For the metro as a whole, the annual housing permits are:
2012: 11,493
2013: 12,033
2014: 11,444

So, the metro minus Minneapolis has seen an increase each year.

That being said, I don't know that I would put much stock in a report about condos in Minneapolis. There apparently haven't been any condos built in downtown Minneapolis for a number of years. But, the construction boom in Minneapolis looks to be ending. I'd also be a lot more concerned about Target laying off thousands of people downtown than a relatively small condo project.

I'm pulling numbers from here:
Building Permits Survey

[rogead]

Originally Posted by northsub

I would expect the housing construction to fall significantly in Minneapolis from 2012 and 2013 levels.

In 2012, Minneapolis permitted 3,303 units.
In 2013, Minneapolis permitted 3,322 units.
In 2014, Minneapolis permitted 1,959 units.
Through February in 2015, Minneapolis permitted 19 units.
Through February in 2014, Minneapolis permitted 64 units.
Through February in 2013, Minneapolis permitted 101 units.
Through February in 2012, Minneapolis permitted 403 units.

2012 and 2013 represented permit numbers that were vastly beyond anything Minneapolis had seen since 1996 (the oldest data I can find). I suspect that is totally unsustainable. It also should be pointed out that 2014 was the third highest permit number year for Minneapolis since 1996.

For the metro as a whole, the annual housing permits are:
2012: 11,493
2013: 12,033
2014: 11,444

So, the metro minus Minneapolis has seen an increase each year.

That being said, I don't know that I would put much stock in a report about condos in Minneapolis. There apparently haven't been any condos built in downtown Minneapolis for a number of years. But, the construction boom in Minneapolis looks to be ending. I'd also be a lot more concerned about Target laying off thousands of people downtown than a relatively small condo project.

I'm pulling numbers from here:
Building Permits Survey

I think it's a bit early to predict any significant reduction in overall Minneapolis housing permits. Note that in the figures you provided, the year end permit numbers for Minneapolis are nearly identical for 2012 and 2013 (3,303 and 3,322, respectively). Yet, the through-February number for 2012 (403) is nearly for times as high as the through-February number for 2013 (101). Also, January and February are not high permit months to begin with--In 2013, the two months combined accounted for less than 4% of the yearly total.

The cancelled condo project alluded to in the OP was a high-end luxury building, with projected per square foot prices which were significantly higher than just about anything else in the area. Much of the downtown construction of late, has been in the form of rental units in the slightly-above-average to above average range. With all of the commercial construction currently going on downtown, it's hard to say how the condo market will line-up in 2015.

[TimtheGuy]

Originally Posted by rstzATX

We've been strongly considering relocating to MSP from Austin, TX at some point in the future. Saw this and starting to get concerned about future MSP economy. They can't build enough high dollar condos in Austin, TX because the demand is so high in downtown Austin. Thoughts?

Developers cancel North Loop Minneapolis condo project - Minneapolis / St. Paul Business Journal

"is this a bad sign of the MSP economy?"...not in the least!

[Dakota Gold]

Take that story with a grain of salt. Project's dye on the table all the time, for this or that reason.

I work for the largest sub contractor in the state. The building is just plain NUTS!
The biggest concentration of condos in the next couple years will be around the new Viking stadium. Ryan construction has five on the table at this time, and we will be building them for Ryan, and more to come.