'Buy one, get one free' might work

Star Tribune Tue, 05 Feb 2008 11:15:09 GMT
Metro new-home inventory down, but supply still bloated

Home builders have been focusing on selling rather than building, and that's caused a pile-up of unsold lots in much of the area. The supply of vacant, unsold new homes on the market dipped slightly last year, but new construction continues to saturate the market, according to a year-end report issued Monday by Metrostudy, which tracks housing data nationwide. Its Twin Cities office said that new housing inventory stood at 7,493 units at the end of the fourth quarter, down 21 percent from a year ago. The result is a 4.6-month supply of finished-but-vacant new houses in the metro area. The market is considered at equilibrium when there's a two-month supply. In the report, Ryan Jones, the director of Metrostudy's Twin Cities division, said that the existing home market plays a "pivotal role" in the inventory problem. That's because many people have to sell an existing house to buy a new one. As of Monday there were more than 28,000 single-family houses, condominiums and townhouses on the market through the Regional Multiple Listing Service, according to a weekly report issued by the Minneapolis Area Association of Realtors. That's an 11.8 percent increase over last year at this time and a new record.

[[keywords: Housing;Metro;]]