Month: January 2016

Ericsson lies in the northeastern quadrant of the Nokomis Community. The majority of Minnehaha Creek between the falls and the western edge of Hiawatha Golf Course meanders through the Ericsson Neighborhood. The area is close to major regional parks such as Minnehaha, Hiawatha and Nokomis. It is well-served by light rail with easy access to downtown and the mall or airport.

As is evident from the above trendline, the median home price in the neighborhood rallied to all-time highs in 2015. Prices have since retreated slightly and are now roughly back to levels seen between the second half of 2005 and the first half of 2008.

But life is all about perspective and choice. So let’s choose to use a different lens to gauge market vitality. This time, we’re using price per square foot, but not for the entire market. We’re only looking at single family, previously owned, traditional (not foreclosure or short sale) listings. When peering through this lens, values haven’t even reached their previous mid-2007 peak. Did the median sales price have you convinced not to buy in Ericsoon because prices had reached multi-year highs and were beginning to retreat? Well this might encourage some people reconsider. That’s the power of data.

Looking at a breakdown of the size of homes selling, the 1,500 square feet and under segment continues to dominate. But sales between 1,500 and 2,000 square feet reached record levels for most of 2014 and 2015. The same goes for sales between 2,000 and 2,500—sales in this segment reached all-time highs in 2014 but dwindled off in 2015 back to historical levels.

It’s a pretty similar picture when breaking down the data by bedroom count. It’s clear that 3-bedroom and 4-bedroom homes made up a larger share of sales over the last couple years.

With interest rates still historically attractive but upwardly mobile and rents rising relentlessly, can you really blame someone for wanting to finance a larger forever home?

Twin Cities Housing Market Has Most Closed Sales Since 2005

At a press conference today, REALTOR® associations reported that the Twin Cities Metropolitan Area had the best year in terms of the number of closed sales since 2005. Closed sales finished 2015 13.7% better than 2014, boasting 56,390 compared to 49,604 in 2014.

The median sales price in 2015 was $220,000, a 7.0% increase from $205,600 in 2014. This is on top of gains in recent years of +14.4% in 2013 and 11.9% in 2012. The median sales price of single family homes was up 5.6% and townhouse-condos were up 3.8% over the prior year, continuing multi-year positive trends. Distressed sales were a mere 10.6% of all closed sales in 2015. This represents a one-year change in sales of foreclosures and short sales of -26.7%.    

“Last year (2015) really showcased the durability of our economic and housing recovery, despite a few obstacles. As sales hit a 10-year high, the Twin Citizens are just as committed to homeownership as ever. Attractive rates, rising rents, job growth, wage increases and the lowest unemployment rate of any major metro area will continue to be positive factors for real estate,” said Judy Shields, President of the Minneapolis Area Association of REALTORS^®

Months’ supply of inventory ended the year at an unprecedented low of 2.1 months. This metric indicates how long it would take to sell-off all existing inventory if no new inventory was added and is generally considered balanced, favoring neither buyer nor seller, at 5.0 months. While this metric indicates a sellers’ market that may leave some buyers with fewer options, it also has some market watchers asking themselves whether we’ve seen the supply bottom. While inventory is certainly a metric to watch it’s probably best measured and compared throughout the selling season and not at year end.

“Since inventory conditions vary across the metro and market conditions change quickly, would-be sellers are encouraged to contact their REALTORS® for an updated market analysis. Your home might be worth more than you think,” said Bob Clark, President of the Saint Paul Area Association of REALTORS®.

Days on market continued to shrink, ending 2015 at just 76 days on the market – a 10-year record low.

Percent of original list price, a metric that demonstrates a relationship of the original list price compared to the final sales price remains strong at 96.6% overall and across market segments. For example, this means if a home was originally listed at $100,000 its final sales price was $96,600.

Single family homes and townhouse-condo segments were at 96.6% of original list. Previously owned was at 96.4%. New construction topped out a 99.6% of original list. This indicates sellers have regained their pricing power and are accepting near-full price offers on their listings.

“We know that well maintained, appropriately priced homes with amenities are selling fairly quickly but moreover the data shows that as well,” said Clark.

Belle Plaine lies just south of the Minnesota River between Jordan and Blakely. It’s an area that was nearly 50.0% new construction back in 2005. Nowadays only about 5.0% of the city’s sales are new construction. 

In 2005, the under 1,500 square foot size segment was by far the most dominant. By the end of 2015 and throughout the first quarter of the year, the 1,500 – 2,000 square foot product was the most dominant segment in terms of sales.

Confirming this trend is the fact that the 4-bedroom property has overtaken the 3-bedroom property as the dominant sales segment since the second half of 2013.

Price range analysis can be most illustrative and offers compelling insights into shifting consumer mindsets and behavior. From the chart above, it’s clear to see that the $200,000 – $249,000 price range was the dominant price range between 2005 and mid-2008. The most affordable $149,000 and under range became the dominant segment in the aftermath of the Great Recession (2009-2013). These days, consumers are somewhat more willing to open their wallets but are still pretty cautious when it comes to how much house to purchase. It’s the $150,000 – $199,000 price range that is currently leading sales activity.

 

 

 

 

 

Windom Park is a lovely Northeast Minneapolis neighborhood bound by Lowry Ave NE to the north, New Brighton Blvd to the east, 18^th Ave NE to the south and Central Ave to the west. Some may better recognize the neighborhood as the area just north of the Quarry, between the cemetery and Central Ave.

Home prices in Windom Park are currently about 17.5 percent higher than the entire Northeast Minneapolis community. Prices in the neighborhood are within 1.3 percent of their previous peak. Prices rose 5.0 percent in Windom Park over the last 12 months compared to 11.3 percent in all of Northeast.

Since Northeast is quite popular these days, it’s no surprise that homes in the area tend to sell faster than comparable homes in the metro area. Homes in Windom Park tend to have accepted offers after a median of 27 days on the market. That figure is 26 days for all homes throughout Northeast Minneapolis, while it’s 41 days for all homes throughout the metro.

The most common square footage for homes sold in Windom Park over the last 12 months is 1,500 square feet and less. In older, more built-up parts of the metro, particularly in and around the core cities, it’s pretty common to find smaller homes that are under 1,500 square feet.

The 3-bedroom home was the most common layout for closed sales. That segment had nearly twice the unit sales activity of the next most popular segment, 2-bedroom properties. Earlier in 2015, 2-bedroom properties had once again overtaken homes with 4 bedrooms or more to claim second place.

Perhaps the most broad and truly apples-to-apples visual is that of a price per square foot comparison of progressively increasing nested geographies. In other words, the above chart adjusts the data for square footage by utilizing price per square foot and compares that figure for Windom Park to Northeast, Minneapolis and the Twin Cities region. Minneapolis wins the day at $160 per foot. Windom is second at $147 per foot. Northeast is only slightly below that at $138 per foot and the metro area brings up the rear with a median price per square foot of $117.