Olmsted County Housing Study Nears CompletionMay 1, 2014 Residential Development
Large regional redevelopment projects like UMORE, TCAAP, and the Ford Plant have been making the news and providing opportunity for residential development. At the same time, one less publicized project has been quietly forging ahead.
Per last October’s Housing Summit in Rochester, Olmsted County housing needs are expected to rise. Much of the demand will result from the six-billion dollars earmarked for new development at Mayo Clinic, improvements to Rochester’s infrastructure and downtown, an increased presence of the University of Minnesota, and construction of the ZIP Line passenger rail corridor.
Maxfield Research was retained by Olmsted County to conduct a comprehensive housing study and market analysis of the county and collar communities. Their draft report was recently completed and is expected to be available to the public on May 7th. We understand it will show large growth in the county with a need for move-up housing and some affordable units. Household incomes and wages are comparable to the Twin Cities, housing costs are 15% less, and, for now, land prices outside of Rochester have not seen cost increases that are occurring in the city.
Other expected highlights from the report include:
- Median household incomes match the Twin Cities (TC) Metro area and are substantially higher than communities like Duluth, St. Cloud, and Mankato.
- Olmsted County wages are higher than all Metro counties minus Hennepin and Ramsey.
- Expected large growth in the next 20 years; could be even higher with Destination Medical Center (DMC) impacts.
- Land prices in Rochester-proper are increasing, especially downtown.
- 1,500 +/- vacant lots remain; no record on number of platted lots approved but never recorded.
- Unlike most of Minnesota, Olmsted was not hit by the recession and kept low foreclosure numbers; less than 10% compared to 33% in the TC area.
- There is little to no presence of national housing development in the county; the development make-up is local builders. Bigelow homes is the largest builder.
- New subdivisions are smaller and tend to average less than 30 lots per plat. Builders have kept land holdings to a minimum after the downturn. All of the good lender-mediated lots have been absorbed.
- The City of Rochester and the Mayo Clinic are doing planning studies, which people are waiting for before committing to land. Findings are expected over the next year or so.
- Affordable housing is a need for the county.
Similar to Rochester/Olmsted County, the other large redevelopment projects will move forward increasing opportunities for commercial and residential development. Digging in to uncover the progress of quietly advancing projects will be critical to staying ahead of the game.
Maxfield Research provides comprehensive real estate market information and market feasibility studies for private and public clients.