While many homeowners plan to sell in the spring, recent years show that the winter market remains competitive as motivated buyers and sellers work to get to the closing table. We’ve analyzed our local market to offer insights you can use as you determine if you should sell your Minnesota or western Wisconsin home this winter.
A snapshot of our local market
First, let’s look at what home sellers are experiencing across our 13-county metro area. According to the Minneapolis Area Association of REALTORS® (MAAR), local home prices have been on the rise for 44 consecutive months. In October, metro-area homes sold for a median price of $218,000 — a year-over-year increase of nearly 5 percent.
Price gains for “average” homes in our area are moderate but slowing and we are unlikely to see double-digit increases again soon. If you have a home in this market segment, you may earn as much if you sell this winter as you would if you waited until spring.
Selling a lakeshore home this winter
Twin Cities lakeshore homes are selling at their highest price since September 2008, with a median sales price of $388,000 in October. These homes are also selling faster than in recent years; in February 2010, metro lakeshore homes were taking an average of nearly nine months to close and these homes now average about five months before closing. Last, local lakeshore sellers are receiving an average of nearly 92 percent of their original asking price.
It’s a bit early to tell if there will be dips in this winter’s lakeshore home prices or sales, but numbers do indicate falling inventory for metro lakeshore homes this autumn. Sellers in this segment may find eager buyers who want to move now so they can enjoy the very first days on the water this spring.
Selling a luxury home this winter
Here’s a statement that wasn’t true a few years ago: Luxury homeowners may have the most desirable properties on the market this winter. In local homes priced above $500,000, we are seeing an average of $198/square foot at the closing table. Additionally, pending sales in this price point were up 10 percent year-over-year in October, and sellers are receiving 95 percent of their original asking price on average.
In the winter of 2010, the low point for the local luxury market, sellers were gleaning just 88 percent of their asking price.
Luxury home sellers are also getting to the closing table faster; in October, average days on market were 134 days — a night-and-day difference from February 2009, when luxury homes lagged on the market for an average of 295 days.
As our local economy continues to rebound, the pool of luxury buyers is growing faster than homes are being placed on the market. If you’re thinking of listing your high-end home this winter, you may be able to sell it more quickly and for a higher price than in years past. One important caveat is that the market behaves differently at differing price points — which means a $500,000 luxury property has more potential qualified buyers than a home that’s selling for $1 million or more.
Selling a starter home this winter
While our entire local market is showing relatively low inventory, starter homes — or those priced under $200,000 — are the most limited in supply. If homes in this segment continue to sell at their current pace, we would have a supply of only 2.2 months across our 13-county area. This puts us in a clear “sellers’ market” for this segment. Read more insights on what makes a sellers’ market.
The inventory of starter homes dropped 30 percent year-over-year in October, so first-time homebuyers desperately need more starter homes to come on the market this winter. If you’ve been thinking of moving to a larger home, this winter may be a great time to sell your starter home and move up.
What happens next?
We’ve broken out a few different market segments, but each home is different. Homes on the same block may even have vastly different values and conditions. Edina Realty has more than 2,300 local experts covering every city and suburb across Minnesota and western Wisconsin. We’d love to put you in touch with a specialist who can evaluate your home’s current value and likelihood of selling this winter.
For more advice on selling a home, follow #SellerInsights on Facebook, Twitter, Instagram and YouTube.