Edina, a city in Hennepin County, Minnesota, is one of Minneapolis’ first incorporated suburbs. Post-war, the city was designed to be car-centric, and eventually became the location of the very first indoor mall with a controlled climate, Southdale Center. Edina has three museums, namely: the Edina Art Center, the Works Museum, and the Edina Historical Society. The city also has great outdoor activity areas like the Fick Auditorium and several parks including Rosland Park, Edinborough Park, and Bredesen Park.
On BestPlaces, some of Edina’s numbers are better than the U.S. average. This includes its unemployment rate, with around 3.1% compared to the national average of 6%. Even the job growth in the city is better by 7.2% than the national average and even experienced a 1.8% increase over the past year. For the residents’ wellness, the Trust for Public Land’s ParkScore reports that 91% of Edina’s residents live within a 10-minute walk from a park, even better than the median of 55% across 14,000 cities and towns in the database. Because of these factors among others, ranking and rating website, Niche, places Edina in the fourth spot of the Best Suburbs to Live in Minnesota, fifth Best Suburb for Young Professionals in Minnesota, and sixth Best Place to Retire in Minnesota.
That said, prospective residents and developers ask: how much does it cost to build a home in Edina?
The Cost of Building a Home in Edina
Nationally, building a 2,000-square-foot home costs an average of around $300,000 according to Forbes. Homes of the same size in Minnesota cost around $236,980. Compared to the previous year, home prices in Edina this 2022 were down by 3.5% on Redfin, placing the current median housing cost at around $617,500. Edina is considered a very competitive housing market on Redfin’s Compete Score because homes spend an average of 16 days on the market before it gets sold despite the high prices. More in-demand homes sell at 6% above the listing price, while the city average sale-to-list ratio is 102%.
The price of a custom single family home in Edina varies with the materials, labor, and professional services required to complete it. New home construction usually includes factors that fluctuate independently from each other, such as framing, foundation, plumbing, interior, and exterior finishes. There may also be city-required documents to fill out before starting the construction. All of these can fall into either the hard or soft costs of building a home.
The hard costs are expenses that fund the physical structure and construction of the house. These include the materials, landscaping, labor, and even the total building value. In Edina, basic or standard construction homes start at around $225 per square foot. Middle-range or market-price homes have an average price of $282 per square foot while luxury or high-end homes start at $400 per square foot.
Minneapolis-based firm Sustainable Nine Design + Build (Sustainable9) gives a run-through of the current home building costs and estimates.
Sustainable9 also adds that interior finishes range from $350,000 to $1,000,000. The cost of major systems varies with the preparation and brand or model of the equipment to be installed. These systems include plumbing and electrical, heating, ventilation, and air conditioning (HVAC), and may cost anywhere between $90,000 to $200,000. Brigley Roofing, Inc., a St. Paul-based contractor, shares that the cost of a new roofing system generally depends on various factors including property location, weather, labor costs, materials, and other roofing requirements and details like the slope and roof style. In total, one can purchase 25-year shingles, also known as three-tab shingles, for $50.00 to $60.00 for each 10’ x 10’ square.
Soft costs are the expenses that go beyond the actual construction of the home, such as architectural design, land development fees, building permit fees, engineering fees, and other miscellaneous expenses.
Cost of the Land
Generally, land prices may vary due to proximity to metropolitan areas, views, amenities, and topography. According to real estate listing websites, the average cost of land in Edina is $728,094, or around $31.42 per square foot. This value may still increase depending on the development status of the lot since some of the listed properties may be undeveloped for residential construction.
As of July 2022, the most expensive piece of land in Edina is a $1,600,000 1.6-acre property located in the Rolling Green neighborhood. The other most expensive property is priced at $73.45 per square foot for a total of $799,990 for a 0.25-acre property in the Highlands neighborhood. The cheapest property available in Edina is a 5,227-square foot lot listed at $299,990, located in West Edina.
Permits and Other Fees
Filing for a permit in Edina can be done in person or online, however, in-person submissions are by appointment only at the city hall. To help project owners and contractors in computing the total permit fees needed to be paid, the Edina city council has put up a Permit Fee Estimator on their website. For example, a project worth $200,000 will have a total fee of $3,398.40 with the following breakdown:
Architecture and Design Fees
Architect and design fees generally depend on the size, scope, and complexity of the project. The client’s preferences, needs, and lifestyle may also be taken into consideration for the final design. Some projects may be simple, but others may require extensive planning, attention to detail, and consultation with various industry professionals. The cost of architecture and design is usually taken as a percentage, anywhere between 5 and 20%, of the total project cost; however, some professionals may charge a fixed hourly rate.
In Edina, architect fees cost around 5 to 18% of the total project cost. Lower-end services, which refer to little customization, cost around 5 to 9% of the overall project cost, while high-end services that may also include interior design are around 8 to 18% of the project cost. Overall, it may cost a project owner around $30,000 to $120,000 for the floor plan and design.
How do the custom home building costs in Edina compare to other nearby cities?
Minneapolis is a city bisected by the Mississippi River, the second longest river in the U.S. In the Minneapolis-St. Paul-Bloomington metropolitan area, the millennial homeownership rate is at 51.2%, the second highest in the country, next to Salt Lake, Utah. Millennials see Minneapolis and the Twin Cities as potential residences because many homes are within six blocks of a city park, with a nearby river or lake, and the inventory is cheaper than in other coastal cities. According to permits pulled from BuildZoom (BZ), the average project cost in Minneapolis is $490,328, with some of the new homes having porches.
Richfield is a city in Hennepin County, Minnesota, located five miles from Edina. Best Buy, the largest U.S. electronics retailer ranked 66 on the Fortune 500 list, is headquartered in this city. Permits from BZ state that the average job value is $321,667, with single family homes usually having a basement or a garage. Hopkins is another city in Hennepin County, with an average project cost of $430,736 for new homes.
The Future of Edina’s Residential Construction Industry
Housing and construction costs all over the country increased when the pandemic began. However, after a year of sky-high prices, some experts are saying that the real estate market is finally cooling off. For Edina, this is not that noticeable because while home prices are indeed gradually going down, there is still not enough housing inventory catered towards the middle-income and working-class residents. This scarcity can be traced back to the 2008-2009 real estate crash, which kept Minnesota’s housing production way below the area’s demand. According to the Minnesota Housing Partnership, 100,000 more units are needed to sustain the state’s population.
More and more developments are being approved and seen in Edina, including a 356,181-square-foot high-rise building in Southdale, marketed as a high-end residential property with 185 luxury apartments. Another project is a seven-story apartment, which the city council approved along with the rezoning, redevelopment plan, and the creation of a new tax increment financing (TIF) district. Some developers that are currently working on projects in the city are even proposing new residential buildings in the city. However, some of the developments in progress in Edina are having trouble with costs such as a $251,000,000 luxury apartment project that is seeking a $22,000,000 subsidy to cover the increasing construction prices and labor shortage.