2016 Housing Activity Remains Steady, Value Over All Sectors Highest Since ‘08

According to the Home Builders Association of F-M’s 2016 year-end building permit report construction activity remains strong in the F-M metro area. Dilworth, Fargo, Moorhead and West Fargo collectively brought in nearly $895 million through 4,550 building permits. The number of permits issued last year was the most since 2008, which was a banner year resulting in 6,486 total permits.

Compared to 2015, total construction value was up 11 percent and permits were up 3 percent. Total permits and values include housing, multi-family, new commercial, residential and commercial remodeling, public and miscellaneous categories.

HBA of F-M President Tyrone Leslie, Heritage Homes, says, “Despite some rainy summer weather, a tumultuous election season and frigid temps late last year, we’ve got steady numbers to report. It is easy to see the results of last year’s construction activity simply by driving some of our main roads in the F-M metro.”

Housing starts for all communities combined to reach 1,111 and accounted for 24 percent of total permits. Single-family permits were up 5 percent, while twin home and rowhouse/ townhouse permits dropped 34 percent.

“In terms of affordable housing, it’s troubling to see the attached housing sector decrease,” Leslie says, “The HBA of F-M is working to keep incentives like the two-year tax exemption for new housing for communities in North Dakota, and address other issues affecting affordability in Minnesota. It is our goal to keep new housing and homeownership attainable for more of the area’s workforce families.”

West Fargo was the only community that experienced an increase in housing permits compared to 2015 (5 percent), but its total valuation remained relatively equal. Conversely, Fargo was the only community that saw an increase in housing valuation, but its number of permits fell 10 percent compared to 2015. In Minnesota, Dilworth’s housing permits decreased about 22 percent, and Moorhead’s fell 15 percent.

Looking across the last decade, new housing activity of 1,111 in the metro exceeded the 10-year average of 942, and is right in line with the five-year average of 1,116.

Compared to 2015, residential remodeling permits increased in all communities except Moorhead, which saw a slight dip of just 10 permits. Combined for the metro, remodeling was up 6 percent in number of permits and 19 percent in terms of value.

“Reflecting on the past ten years, what we see is steady, sustained construction activity when you combine all sectors,” Leslie says. “We just don’t have the wild swings that some parts of the country sees. In terms of housing specifically, numbers are down a bit, and that is in the affordable housing market. The HBA of F-M hopes to work with legislators to retain the current incentives, and address some regulations, that definitely affect homeownership for all types of buyers.”

Each quarter, the HBA contracts with Fiebiger, Swanson, West & Co. to compile the building permits from Dilworth, Fargo, Moorhead and West Fargo into a uniform report for the industry’s and media’s use. It includes summaries for each city, types of construction, valuations and comparisons to the past three years.

The HBA of F-M promotes an environment in which members and their businesses can prosper. It is a non-profit trade association of nearly 900 members that has been in existence since 1956. Its public events include the Spring Parade of Homes, Fall Parade of Homes, Remodeled Home Tour and Red River Valley Home & Garden Show.