It’s been a relatively mild winter compared to last year, but the surest sign of spring is the boost we’re seeing in our local housing market. As the spring market arrives, sellers across Minnesota and western Wisconsin are hoping for increased prices and an influx of buyers. Here, we break out what every seller — including luxury, lakeshore and starter homeowners—should know about listing this spring.
The average local home
In our 13-county metro area, prices have been on the rise for a whopping three years! While year-over-year price increases have slowed to more modest gains, we still saw a 6 percent increase in the median sales price of local homes in January 2015. Currently, the median sales price of a home in our market is $225,000. That’s an increase of 36 percent in just three years. At the market bottom in February 2012, homes were selling for a median price of $165,000.
Listings are also on the rise, and it would take four months to sell all the homes on the market at the current pace of sales. This means we are in a moderate sellers’ market. We anticipate that inventory will continue to grow as homeowners with more equity and buying power decide to sell.
Sellers are still at an advantage, but this spring could bring many sellers into the mix who have been waiting to sell their home at a higher price.
Lakeshore home sellers
Lakeshore prices also continue to rise, albeit a bit slower this year. The median price of a lakeshore property in our 13-county metro area in January 2015 was $340,000 — a 3 percent increase year over year. Farther out, prices are slightly lower. In Burnett County, Wisconsin, which boasts a massive boating and lake community, prices have increased 3 percent over last year, for a median price of $185,000. Meanwhile in Cass County, Minnesota, the median sales price of a lake home is $240,000, an increase of 5 percent over January 2014.
As our local economy has grown and consumer confidence has returned, so has the desire for a second home on the lake. Sellers across our local market are seeing offers that make up 96 percent of their original list price. In May of 2011, lakeshore sellers were accepting, on average, offers that were just 92 percent of their original asking price. The lesson here is that lakeshore buyers aren’t just hunting for a good deal. They are committed to paying a fair price and they understand that the bargain pricing of years past is over. Sellers can work with a lakeshore agent in their area to price their home fairly and sell it quickly before waterskiing season begins.
Luxury home sellers
In Minnesota and western Wisconsin, luxury homes are those valued at $500,000 or higher. In our current market place, the median sales price of luxury homes is $640,000 — a staggering 24 percent increase over January 2014.
As with lakeshore home sales, many of today’s house hunters have increased buying power and are ready to buy their high-end dream home at last. While it’s not uncommon for luxury homes to stay on the market for longer periods of time, we’ve seen the median days on market plummet from 164 days in March of 2012 to just 64 days in January 2015.
The lesson that can be learned from all this? If you’re a luxury homeowner considering selling, now is the time. Most high-end sellers are earning the highest price in more than six years and homes are flying off the market in an average of two months.
Starter home sellers
If you’re a homeowner who has stayed in a single-family “starter home” — which we’ll price here at under $200,000 — then it may be time for you to move on. New listings for this price were down 15 percent last month and it is a segment of the market in very high demand among today’s first-time buyers.
At the current pace of sales, it would take just 2.9 months to sell all of the starter homes in our local market. That means that the segment of homes under $200,000 is a definitive sellers’ market. As young spring buyers begin their house hunt, they will grow competitive over these scarce properties. While these homes are on the market for a median of 52 days right now, we think this number will drop as more young buyers purchase their first homes this spring.
Still on the fence?
We’ve broken out a few home segments here, but the reality is that your home requires the evaluation of an expert before you’ll know if it’s the right time to sell.
Edina Realty has more than 2,300 local market specialists covering every area of Minnesota and western Wisconsin. For a free, no-obligation analysis of your home’s value, reach out today. We’ll pair you up with an agent who will tell you where you stand in today’s unique, changing market.
All local market statistics provided by Northstar MLS.