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Southeast Minnesota real estate market continues to strengthen in 2013

Fri, Jan 31st, 2014
Posted in All Home & Garden

ROCHESTER, Minn. – The real estate market in southeast Minnesota saw strong gains in nearly every indicator in 2013, with the result being a residential housing market that continues to improve. The results were announced by the Southeast Minnesota Association of REALTORS® (SEMAR), an association representing more than 800 REALTORS®.

“In 2013, southeast Minnesota saw an increase in stability throughout our 11 counties,” said Casey Hatch, President of the SEMAR. “What we are seeing now is what we should be seeing - stability. Bank-owned properties and short sales once commanded a good share of the market. Residential real estate is going to be stronger with fewer foreclosures and short sales. All the indicators we use to judge the health of a marketplace are going in the right direction. This is good news for home sellers and those looking to move into our area. We continue to see strong, consistent growth.”

Among the indicators that help shape the real estate market in southeast Minnesota:

•Homes Sold: More than 5,000 homes were sold in 2013, an increase of 6.4 percent. In 2012, backlog inventory sold as the economy grew stronger and buyers entered the market with more confidence.

•Months Supply of Inventory: Levels dropped 11.8 percent this year to 4.5 months supply. Months of inventory has been dropping consistently over the last three years, which is a significant supply side correction. Sellers are facing less competition and multiple offer situations are more commonplace. Unfortunately, some buyers are struggling to find quality inventory.

•Days on the Market: Down nearly 14 percent to 102 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 $140,000 in 2013, an increase of 4.5 percent over 2012. With less inventory and more demand, the median sales price has recovered some losses since the end of the Great Recession.

•Affordability Index: The index this year is 241, which means the median household income is 241 percent 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. This indicates that the housing market in southeast Minnesota continues to be strong and affordable.

•In 2013 we saw what we needed to see – a residential real estate market is stabilizing and is poised for continued growth.

“When taken together, these indicators show a healthy market that is continuing to strengthen,” Hatch said. “We expect these trends, and the growth associated with Destination Medical Center, to continue strong sales for existing homes and more building of new homes throughout the region. All these indicators are ways of saying our area is strong and getting stronger.”

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