Please, someone, plant a “For Sale” sign in front of your house!
Realtors say 2012 has been, and 2013 will likely continue to be, the closest thing to a boom market the Twin Cities region has seen in almost a decade: Prices are up—in some cases, spectacularly—the average amount of time homes spend on the market is way down, and the number of foreclosures, which tend to depress prices overall, has fallen considerably.
Now, all the market needs is more sellers.
“We’re very encouraged by the recovery we saw in 2012,” said Andy Fazendin,
president of the Minneapolis Area Association of Realtors (MAAR), at a Friday news conference to announce the organization’s annual market-results survey. With the area’s economy recovering and interest rates at historic lows, “we clearly saw behavior (among buyers) change from the start of 2012 to the end of 2012.”
The result: The median price of a home in Eagan rose 13.5 percent during 2012, from $70,950 to $194,000. The number of days homes spent on the market before selling also dropped dramatically. In Eagan, the average home stayed on the market for 96 days, compared to an average of 132 days in 2011. The number of closed sales in Eagan also jumped up from 800 in 2011 to 946 in 2012, an 18.3 percent increase.
Even with the rebound, however, prices have a long way to go before returning to the values of the past decade. The Twin Cities’ region overall median price at the end of 2012 was $167,900. That’s way up from the $150,000 median of a year earlier, but at its peak in 2006, the median hit $230,000.
As a result, many homeowners are apparently still reluctant to list their properties for sale, Fazendin said. Inventory is at a 10-year low, and some people who want to buy homes “are writing four or five offers (and) still not getting a house.”
Eagan saw a 5.3 percent decline in the number of new listings between 2011 and 2012, from 1,229 homes to 1,164. The number of homes for sale in Eagan at the end of 2012 stood at 160, down nearly 100 from the end of 2011.
Fazendin believes the problem will self-correct, however.
“Sellers often trail buyers” in getting excited about the market, he said. In 2013, he expects the median price across the region to grow an additional 8 percent to 13 percent, which should result in more “For Sale” signs sprouting up.
The recovering market should also prompt a big increase in new home construction across the region, said Kate Beckman, president of the St. Paul Area Association of Realtors.
“We’ve seen a great increase in activity,” Beckman said. “We believe new
construction could surge 25 to 35 percent in 2013.
There’s a lot of “pent up excitement among our agents,” she added. “We had full parking lots in our offices in December. That’s unusual.”