POTW | Independence
By David Arbit on Tuesday, July 5th, 2016
On the westernmost edge of Hennepin County between Maple Plain and Delano lies the City of Independence. It felt not just appropriate—but downright patriotic—to showcase this city exactly one day after celebrating our nation’s independence.
Look at that price difference! Independence is nearly twice the price of the metro! Hold on just a second, let’s take a step back. When comparing or benchmarking the performance of a subject area to the metro, it’s tempting to just throw all our eggs at the wall and see what sticks. Try to avoid that temptation. It’s worthwhile to set some criteria, customize our query slightly and attempt to maintain an apples-to-apples comparison.
The above is a more consistent comparison. This compares single-family, previously owned, traditional, non-waterfront homes between 2,000 and 2,500 SF in Independence against those in the metro area as a whole. According to this view, there is only a $22,000 premium on Independence. Please note that most homes in this city were built more recently than many homes in the rest of the metro, even though “Year Built” is not yet an available field in Infosparks. The point is that the difference in price between the two geographies went from $300,000 to $22,000.
Despite limited sample size, for the moment, new construction prices (on a per square footage basis) for single-family homes have once again converged with previously owned values. In May 2015, new construction homes in the city were selling for $415 per square foot. In May 2016, the one new home sold for $189 per foot.
Assessing current active supply levels by custom price point, it’s clear to see that the under $300,000 price point saw the largest gain in for-sale inventory. The $300,000 – $600,000 range witnessed the strongest year-over-year decline, while the $600,000 – $1M range was stable. Interestingly, there are nearly as many homes on the market above $1M as there are between $300,000 and $600,000.
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