Surveying the Chicago, Indianapolis, and Minneapolis/St. Paul markets Metrostudy has noticed that new subdivisions are beginning to come through the pipeline. Not a re-hashing of existing communities or a re-configuring of existing developments, but new land, being newly developed.
In the 2010 Chicago market there were a total of 383 new lots delivered— three hundred and eighty three. There are nearly ten million people living in this market and Chicago could only muster a few hundred new home sites during a 12-month period, a mere 30 new lots coming on line per month. Through the first six months of 2014, there were a total of nearly 1,500 new lots delivered. Not only that, but we are beginning to see proposals for new subdivisions that didn’t exist just a few years ago. That may not seem like much in some markets, but here in the midwest, developers have been in hibernation for the better part of the past five years. Development activity has not been as scarce in Indianapolis and the Twin Cities as it has been in Chicago, but nearly so. In the Twin Cities, for example, a total of 964 new lots were delivered in 2010. In 2013, there were 3,683 new lot deliveries. Indianapolis has seen a total of 1,400 new lots delivered in the first six months of 2014, compared to just 650 through the first half of 2010.
As midwest markets have slowly recovered, builders and developers have recognized the need for fresh lot inventory. Quality A and B lots are nearing critical levels of remaining inventory, fewer than 18 months of supply in all three markets. Given the length of time necessary to bring new lots to the market, developers have been very busy over the past twelve-months in an attempt to keep the housing industry supplied with lots in the most desirable locations. Look for continued new lot development activity in these markets for the next few years as we play catch-up in order to resupply these markets.