Spring 2019 Market Update

Homes of $500,000 and more

{Thank you to all who read and responded to my last real estate post.  :-) 

This piece is by request.}

Question:  I'd like to know about the current market for higher-end homes in our area.  For example, I'm told that starter homes sell faster than $1,000,000 homes.   True?  What is the average-days-on-market for $300,00 homes vs 1,000,000 homes?     I'd like info about that and other things, including:  Selling prices,  price-per-square-foot prices, number sold and number listed.  

 

Homes priced below $319K

Homes priced above $459K

Yes, Reader, your initial premise is correct... $300K homes sell in 45 days, while lately $1M homes sell in 80 days, on average.

 

Note here that we are in our second year of faster market time for both price ranges.   Homes are selling twice as fast as they were in 2016 -- in both of these price ranges.   {Why are homes selling faster, now?   
 

New listings had its five-year peak in 2015; note also that 2015  is the ten-year peak.   
 
Relative to the crash of 2008, where upper-bracket listings were appearing at 275 per month, they are now up to 475 per month.   They have been at this rate of 475 since 2014.   New listings peaked in 2015.       
From a real estate pricing standpoint, -- What does this mean? 
 
What is about to happen? 
Long-term:  Having Land is Good in Minneapolis and the close-in suburbs.  
Owning LAND is important.    Back to basics.  
This means, that 
If you are thinking long-term, this is a good time to buy around here. 
These neighborhoods in Southwest Minneapolis are are going to go up, up, up in value.   Global warming is good for Minneapolis real estate.   We are a lovely, healthy city in a hurting country.    We have jobs, and we work toward justice.   This is a great city, in the near term, and the long-term.   And owning land in the city has never been more important.
We have thousands of rental units being built --  Big tall RENTALS everywhere.   These are not condos , these are rentals.   The projected growth for Minneapolis (from the 2010 census) showed the need for these rental builds, and we now have a Minneapolis 2040 plan which is attempting to respond to this influx of people. 
Tall rentals will house many of them -- But people want yards of their own, at some time in their lives.   
And we aren't building more land here.  
This is happening now, not ten years from now.   
 
Single Family Home Prices are going to be going up. 
How fast is the only question. 
 
 
Back to the data...
 
You might call this a "balanced level" of listings* 
that we have now... 
New Listings have leveled off at around 475 ---
splitting the difference between the crash year of 2008, and the high-point of the Obama Recovery in 2015.
We have leveled for the moment... 
We are in a balanced real estate market, where neither sellers nor buyers are particularly advantaged.   
It's a "traders" market, rather than a buyers or sellers market. 
 
Traders who know what they are doing, do well.  Less-fortunate and/or less-sophisticated traders do poorly in balanced, more nuanced-and-complex markets.  
 
 
 

*Real Estate* -- property; especially in land:  (according to Webster)

If the Obama Recovery is still holding, {despite the crazy of the last two years -- 
My opinion on this has to do with what is "real."   Real Estate is Real Property.
Closed sales in the upper brackets increased during Obama's second term.   We have plateaued since March of 2017.    
That plateau in closed sales, since 2017, combined with the twenty-percent increase of New Listings since 2017....  (shown above) 
 
This resulted in... 
...flat pricing for sellers.  Median Sales Price is the same now as it was in 2014.   And 2017.   
 
Price-per-square-foot is up, but that is largely because all of the newly constructed 3000 sq ft homes which are costing a lot to build.   
Labor and Materials prices are up.    
We have not seen the Great Appreciation that we are about to see in Minneapolis Lakes Neighborhood Real Estate.   
 
Land Value is not taken into account when making price/sq ft comparisons... 
Location is taken into account. .  . 
But a 3,000 square-foot-house on a 45-foot lot is not (yet) valued at a lower price than a same-sized-house on a 60-foot lot.   
Do you think the 2040 plan that allows triplexes will affect this?   

My opinion:    In the SHORT TERM 

THIS does not look like a great year for sellers to divest.   

 

Despite the 1% enjoying stock inflation, this year has not nearly been as robust for transactions as expected.  

 

Median Sales Price has plateaued since 2009.  (in homes priced over $459K.)

Median Sales Price in this price range has been level for ten years.  

It is about to take off.  That's my opinion.   I'm bullish on Minneapolis. 

 

 

Minneapolis is NOT overpriced -- in any price range.  That's my opinion.  

d

Land and nice homes each get more valuable as more people stream into the cities... 

 

Many of them will be in tall rental buildings that are  being built everywhere you look.   They will want family-sized homes with back yards in the nicest neighborhoods. 

Therefore, the prices of single-family homes are going to go up, in a short amount of time.   Maybe not this year... but soon.  

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