October/November 2015
Permits Plus + A bi-monthly statistics and advocacy update for HBA of F-M members
FOR YOUR CALENDAR: Nov. 17 - Lunch Session: Cold Weather Best Building Practices Dec. 8 - Lunch Session: Fargo Housing Study
Dec. 17 - NAHB Webinar: HUD’s Affirmatively Furthering Fair Housing (AFFH) Rule: What Builders Need to Know Jan. 15 - MN Contractor Continuing Education
Jan. 18-19 - MN Electrical Contractor Continuing Education Jan. 27 - Lunch Session: Why put a home on the Remodeled Home Tour? Jan. 29 - MN Plumbing Contractor Continuing Education
Feb. 19 - MN Contractor Continuing Education
Visit the calendar at hbafm. com for details or contact Jenny Erickson at (701) 2325846, jenny@hbafm.com.
Homebuilding quarter
Published six times per year in addition to the Plains Builder, Permits Plus aims to provide a concise report on building permit numbers and a timely update on Association advocacy efforts.
remains strong through third
According to the Home Builders Association of F-M’s third-quarter building permit report, new housing activity remains steady compared to the same time last year. With 917 housing permits taken through the end of September, the F-M metro community encompassing Dilworth, Moorhead, Fargo and West Fargo experienced a 2 percent decrease compared to last year’s 940 housing permits, and a 4 percent increase in value, coming in at nearly $201 million.
Single-family homes were equal to last year, community-wide, while twinhome construction dipped and townhouse units increased slightly. Housing permit values grew by nearly $7.2 million. Residential remodeling permits and value both increased, 14 percent and 3 percent, respectively. HBA President Clay Dietrich, Dietrich Homes, Inc., says, “Mother Nature has remained our friend through third-quarter. It’s been an outstanding year to get homes into the ground and to be able to finish up with outdoor work as fall sets in. We can only hope the warm, dry weather continues for a few more weeks.” Dilworth - Last year at this time, Dilworth had 20 housing permits. This year it had 24 valued at over $6.6 million, which is a 20 percent increase in number of permits and a nearly 40 percent increase in value. Residential remodeling permits increased 50 percent. Moorhead - Moorhead’s construction year is strong with 181 housing permits, its best since 2007. The city is up 5 percent over last year’s numbers at this time. Moorhead’s residential remodeling permits were up 8 percent. “Moorhead is the only city that saw an increase, or holding steady, in number of building permits across all categories. It seems to be making up for a lull in housing activity several years ago by satisfying pent-up demand now,” Dietrich says. Fargo - Fargo saw a 17 percent increase in new housing permits over last year, going from 312 to 365. Residential remodeling rose 9 percent. West Fargo - West Fargo’s housing permits dropped 20 percent compared to third quarter last year: It had 347 housing starts. Residential remodeling increased 34 percent. “West Fargo is the only community that experienced a downturn in housing through third quarter. It’s worth highlighting that the city had an extraordinary year last year with 435 housing permits, plus strong activity in 2013. That type of growth is not sustainable. With that perspective, 2015 has still been outstanding for housing activity in West Fargo so far.”
Third-quarter permits continued on back page
HBA OF F-M + 1802 32ND AVE S + FARGO ND 58103 + (701) 232-5846 + HBAFM.COM + INFO@HBAFM.COM
January through September 2015 - Dilworth, Moorhead, Fargo, West Fargo
Total Housing Permits by Community
Total Building Permits Value
Chart below shows permit and value growth through third quarter 2014 and through third quarter 2015. See insert for the full permit report.
HOUSING STARTS
HOUSING VALUE
TOTAL PERMITS
TOTAL VALUE
2
Jan - Sept 2014 Jan - Sept 2015 Difference Dilworth 20 24 4 Moorhead 173 181 8 Fargo 312 365 53 West Fargo 435 347 -88 Totals 940 917 -23 Dilworth $4,775,000 $6,630,850 $1,855,850 Moorhead $32,111,639 $36,143,899 $4,032,260 Fargo $68,935,976 $79,653,825 $10,717,849 West Fargo $87,854,337 $78,428,571 -$9,425,766 Totals $193,676,952 $200,857,145 $7,180,193 Housing Starts 940 917 -23 Multi-Family 46 39 -7 New Commercial 105 118 13 Residential Remodel 1464 1673 209 Commercial Remodel 419 401 -18 Public 53 35 -18 Miscellaneous 468 363 -105 Totals 3495 3546 51 Housing Starts $193,676,952 $200,857,145 $7,180,193 Multi-Family $143,140,000 $94,940,483 -$48,199,517 New Commercial $279,028,647 $87,252,400 -$191,776,247 Residential Remodel $22,473,668 $23,068,955 $595,287 Commercial Remodel $116,821,489 $93,244,307 -$23,577,182 Public $117,765,026 $137,590,251 $19,825,225 Miscellaneous $34 041 040 $29 428 894 $4 612 146 $34,041,040 $29,428,894 -$4,612,146 Totals $906,946,822 $666,382,435 -$240,564,387 City
HBA of F-M’s monthly building permit report is prepared by Fiebiger, Swanson, West & Co.
Percentage Difference 20% 5% 17% -20% -2% 39% 13% 16% -11% 4% -2% -15% 12% 14% -4% -34% -22% 1% 4% -34% -69% 3% -20% 17% 14% -14% -27%
Permits Plus
SEASONALLY ADJUSTED UNEMPLOYMENT RATES Sept 2015
Aug 2015
Minnesota
Sept 2014
SINGLE AND MULTI-FAMILY BUILDING PERMITS June 2015 Minnesota
June 2014
% change
Source: NAHB
Source: bls.gov
3.8%
4.0%
North Dakota
3.7%
16,243
North Dakota
12,674
28%
9,716
-47%
782,631
14%
2,707
-25%
Source: NAHB
Source: bls.gov
2.8%
2.9%
United States
2.7%
5,057
United States Source: NAHB
Source: bls.gov
5.1%
5.1%
Fargo-Moorhead
5.9%
889,310
Fargo-Moorhead Source: HBA of F-M
Source: bls.gov
2.1%
2.2%
2.2%
2,018
LOCAL REAL ESTATE
Source: Coldwell Banker First Realty, Barbara Grande
Thru 3rd Qtr 2015 Thru 3rd Qtr 2014
% change
$207,215
$189,136
9.5%
$618,846,625
$536,418,296
15.5%
Home prices in Fargo-Moorhead Closed MLS Volume
MORTGAGE RATES Source: Wells Fargo as of Nov 6
30-Year Fixed
4.125%
30-Year Fixed FHA
4.000%
5-Year ARM
3.500%
15-Year Fixed
3.375%
30-Year Jumbo
3.875%
FRAMING LUMBER PRICES Source: National Association of Home Builders
Date
Per 1,000 Board Ft.
CME Futures
Oct 23
$325
$258.1
Oct 30 Oct 16 Oct 9
$330
$255.9
$316
$260.7
$305
$238.0
WAGE GROWTH - AVERAGE ANNUAL SALARY Source: Greater Fargo-Moorhead Economic Development Corporation
1st Quarter 2015
1st Quarter 2014
% change
$47,528
$45,188
5.2%
$36,400
$35,308
3.1%
Cass Clay
October/November 2015
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Home Builders Association of F-M 1802 32nd Ave. S. Fargo, N.D. 58103
Third-quarter permits continued from front page
Overall - While total building permits increased slightly compared to last year, total value across all communities is down about 27 percent. At $666.4 million, total construction value still exceeds the five-year average of $562 million. Total permits and values include housing, multi-family, new commercial, residential and commercial remodeling, public and miscellaneous categories. “Overall housing starts are up, but multi-family and commercial are lower resulting in an overall reduction in total permit values when considering all categories,” Dietrich says. “Last year was very strong in high-value projects categorized under multi-family and commercial construction. Many of the large projects permitted last year are still under construction which affects when new projects will be permitted.”
MN
sprinkler declared invalid
The HBA of F-M received the following information from the city of Moorhead in October. Please note that in Minnesota’s Building Code, townhomes are classified as two units or more, whereas the International Residential Code classifies them as three units or more: Minnesota Court of Appeals determines building code sprinkler rule invalid for single and two-family homes (sprinklers still required on townhouses including twin homes) The Builders Association of the Twin Cities successfully challenged the Minnesota Department of Labor and Industry (DLI) rule that requires residential sprinklers in newly constructed single-family and two-family homes greater than 4,500 square feet. On Oct. 13, 2015, the Minnesota Court of Appeals found that the 4,500 square foot threshold was an arbitrary square footage standard not supported by evidence and declared the rule invalid. DLI has 30 days to appeal to the Minnesota Supreme Court.
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