2017 Could Be Another Good Year for Home Sellers
Rochester, MN (KROC AM News) - An area real estate association says 2016 was another good year for sellers of homes and current conditions indicate more of the same this year.
The Southeast Minnesota Realtors group has released its numbers from 2016 and they show it was another year of rising prices and low inventories. The association represents more than 1,000 realtors in eleven counties in the southeast corner of the state. The association says last year saw record low inventories which resulted in “multiple offers and fast sales when a property is priced correctly.”
“The number of homes on the market is extremely low in some areas while home prices continue to gain traction,” said Justin Ohnstad, President of SEMAR. “We have entered a strong sellers’ market this year.” Ohnstad believes that the real estate market will continue to show strong seller trends throughout 2017.
Among the indicators that help shape the real estate market in southeast Minnesota:
Homes Sold: More than 6,000 homes were sold in 2016, up from 5,000 in 2014 and similar to 2015 with 6,000 sold, a 1.1% increase. Improved inventory and affordability remain key factors for continued consumer optimism.
Months Supply of Inventory: Levels dropped 27.7% this year to 2.1 months supply. Months of inventory has been dropping consistently over the last five years. Sellers are facing less competition and multiple offer situations are commonplace. Unfortunately, some buyers continue struggling to find quality inventory.
Twelve-month average days on the market: Down nearly 13% to 74 days, on average, shows that homes, when priced appropriately, are selling quickly.
Median Sales Price: The point at which half of the sales sold for less and half for more (not accounting for seller concessions) in a given month was $165,000 in 2016, an increase of 6.5% over 2015.
Affordability Index: The index this year is 229 (down 7.3% from 2015), which means the median household income is 229% of what is necessary to qualify for the median-priced home under prevailing interest rates. The higher number is an indicator of greater affordability in an area.
The association’s report shows there were 2,351 closed sales in the Rochester market during 2016, down 133 from the year before. The median sales price climbed nearly 9 percent, rising from $181,480 to $197,000.
“We are in a unique window; there aren’t many houses on the market, so if you are considering selling your home, this is a great time to do it,” Ohnstad said. “Priced correctly, homes are selling quickly with multiple offers in many cases. However, with FHA reducing mortgage insurance premiums, low down payment options and low interest rates, buyers are also in a strong position.”