Foreclosed Apartment Buildings Benefit As Multifamily Projects Drop

by on Foreclosures

Distressed multifamily properties and foreclosed apartment buildings in Minneapolis, Minnesota, are expected to gain some ground following news that permits for multifamily construction projects have declined in the Twin Cities area for the month of January. Permits for house construction, on the other hand, recorded an increase.

Minneapolis foreclosures for sale are set to get some competition from new dwellings as permits issued for January 2011 increased in the Twin Cities when compared with the same 2010 month. However, the combined value of the permits declined over the same period, along with the number of permitted units. According to the Builders Association of the Twin Cities, January 2011 permits totaled 205 in the metro areas of Minneapolis and St. Paul.

Realtors stated that this could mean more competition for foreclosed homes for sale in Minnesota for the rest of the year. The January total was higher than the 189 permits that were issued during January 2010 and the January 2009 total of 127. The overall value of these permits, however, declined, with January 2011 accumulating a total worth of $62 million, down from the January 2010 total value of $67 million.

Meanwhile, sellers and landlords of foreclosed apartment buildings will have more room in the residential market as permits for multifamily dwellings dropped in the first month of 2011 to 214, lower than the January 2010 total of 350. According to housing market analysts, this shows that multifamily starts will be fewer this year, giving cheaper foreclosed multifamily units a chance to gain a higher share of the market.

Among the local markets of the Twin Cities, Woodbury issued the highest number of permits at 22 for the month of January. Despite the presence of bank foreclosures in the region, realtors stated that new home construction activities will be able to hold their own this year, with Maple Grove, Blaine, and Rosemount also issuing a number of new home permits. Maple Grove had 19, followed by Blaine at 17. Rosemount, on the other hand, issued 12 permits, while Shakopee issued 11.

Realtors stated that the rise in home building permits will help the region's housing industry recover, despite the fact that foreclosed apartment buildings are still expected to get a good share of the multifamily housing market.