When it comes to housing, news reports
from around the state trumpet something
typically heard in a country music
ballad: Down so long this feels like up.
For example, six cities in the St.
Cloud region issued all of 11 housing
permits in May, yet local industry officials
said the $8,000 federal tax credit
for first-time home buyers was winnowing
down the number of houses for sale,
a precursor to more building permits.
In the Twin Cities, things got so bad
that the industry is celebrating a modest
drop in the percentage of distressed (or
“lender-mediated”) homes, which went
from about 60 percent of all home sales
to about 40 percent earlier this summer;
the total number of such homes
on the market in July dropped by 18
percent from a year earlier.
But a dark side might still be lurking.
Closed sales of such houses more than
doubled over this period, which industry
officials also attributed to the tax
credit for first-time home buyers. The
program likely offers limited demand,
but the supply of such homes continues
to climb, rising by 9 percent over this
Some places do, however, appear to
be on the mend. In June, Rochester
housing permits returned to levels from
a year earlier, and permits for all types
of construction rose to their highest
level in 13 months.