Northfield Housing Market May Be on the Mend

After years of low residential building rates, City Building Permit Summaries indicate that the Northfield housing market may be approaching a point of growth.

“We’re starting to see a slight uptick,” said Michele Merxbauer, interim community development director for the City of Northfield.

In 2010, the city issued 11 residential building permits, according to city records. In 2011, the number of residential building permits issued rose to 15.

Granted, these projects were not high cost when compared to the building boom of a few years ago. In 2010, approved building costs for all building permits issued, residential and otherwise, totaled $56,439,518. In 2011, building costs topped off at $16,657,366.

In 2007, the total building permit costs were $101,726,142.

However, the drop in building valuation from 2010 to 2011 is not what it appears to be, said Northfield's building official, James M. Kessler. Due to large projects at  and , building permit project cost totals are frequently skewed. In 2010, Carleton College spent approximately $43 million to build the Weitz Center for Creativity. In 2011, there was no comparable project.

But regardless of the colleges’ financial impact, overall project costs were lower in 2011 as result of the challenging economy, said Kessler. Commercial building costs in 2010 where approximately twice what they were in 2011, dropping from $10,380,160 to $5,281,340. There was also a decrease in residential project costs. The average residential project that required a building permit cost $236,650 in 2010 and approximately $223,247 in 2011.

Despite the drop in average project cost, these numbers may bode well for the city, said Kessler. They are indicative of a decrease in residential property value. Empty lots are being sold at lower prices and the increasing residential permits reflect an economic recovery from the earlier cost inflation affecting properties several years ago.

“Northfield is probably in a good position,” said Kessler, who projects a slow, local economic rebound for Northfield and surrounding areas.

But Kessler and Merxbauer agreed that Northfield’s economic future depends on the global economy, to which Kessler said is difficult to predict.

“We have no idea what the economy’s going to do."