**The following letter was written by Chad and Sara Huebener of Edina Realty and cannot be copied or republished without our permission.***
We hope you had a great summer. We know the real estate market sure did! Below, we summarize our observations of the 2013 market so far.
1. The 2013 spring market was a tipping point. The low inventory and low interest rates we observed in the fall avalanched into a notable inventory shortage as we entered the early spring market (February and March 2013.) Foreclosures and short sales declined sharply, traditional inventory remained very low, and the historically low interest rates created buyer demand for properties the likes of which we have not seen in years. The $300K-$400K market gained momentum and buyers competed for the few available properties in multiple offer situations.
2. “Buyers-in-waiting” was a common trend of the spring/summer market. With the challenges of finding (or having an accepted offer on) a home, many buyers rented through the spring and summer market, and diligently watched for new homes to come on the market. Many of the offers on our listings were from buyers in waiting. At one point, the inventory shortage was so prevalent that we sent out letters to area homeowners outlining specific property needs for our non-contingent buyer families. Homes priced in the inventory-devoid $300K-$350K range were an instant madhouse of activity. One day this summer, a home (traditional sale) hit the market at $319,900 at 2:00pm. By 4:00pm we were in the house with our buyer, and there were already 9 showings scheduled on the property. We wrote and submitted our offer within two hours.
3. Appraisals are still conservative, though getting better. Now that there is a healthy selection of traditional sales for SOLD inventory, appraisals have improved. But they are still keeping a lid on the rate of appreciation. The most challenging appraisals tend to be on homes that are very unique with few available comparables with any commonalities. Arguably, just because no recent comparable sales exist does not mean the value is not there, but lenders don’t always see it that way. The smallest appraisal shortage we experienced this year was $4,500, and the largest was $130,000 on a million dollar lake property. The largest appraisal deficiency we have encountered relative to the list/purchase price is $45,000 on a home priced around $350,000.
4. The senior market for rambler townhomes is HOT. Seniors are downsizing from single-family homes into rambler-style townhomes in large numbers this year. As a result, rambler townhomes (with or without basements) are in high demand, and few options are available in the area. In one case, we contacted a homeowner who was renting out his unit, and negotiated a strong offer for our buyer. In another instance, a blizzard hit the day a vacant rambler townhouse came on the market. We wrote the offer sitting on the kitchen floor, moving quickly to take advantage of the slowdown in showings that the snowstorm provided for us. We barely made it. Another offer worked diligently to bump ours out of the running, but they were just a little too late.
5. New construction is coming back. We are seeing once-quiet new construction communities in the area finally nearing completion, and new communities are emerging. Trout Run is nearly complete, South Hamilton Estates and Twin Ponds are winding down, and Hickory Shores is in full swing. Pulte is starting a new single-family community in Savage near Creekside, and Ryland is opening Dakota Crossing in Shakopee off Eagle Creek this fall. As of late July, Ryland had already sold 8 homes for the Shakopee development out of its Chanhassen model, with the first homes slated for January/February completion.
6. Interest rates and inventory rates are rising. Compared to early this spring, once in the low-to-mid 3’s, interest rates are now fluctuating between 4.25-4.5% for a 30-year fixed mortgage. In a few cases this has affected preapprovals. Inventory is starting to inch up a little bit, but is still low compared to years past. The short sale and foreclosure inventory is significantly down.
7. We still have property needs for waiting buyers. If you or anyone you know has a home that meets the criteria for one of these families below, and you would be willing to entertain a showing or possible offer, please let us know. Each of these families is pre-approved non-contingent to purchase.
- Rambler townhome with main floor master. Must have a separate bedroom a plus full bath in the lower level. A white kitchen would be a plus. Savage/just north (across the river) $225K
- 719 Schools in Savage. Must be in the Glendale Elementary district. Two-Story. Must have 4BR on one level and a finished basement is preferred. Price $400K-$600K.
- Savage or Prior Lake. 719 Schools. 3+BR Up. Would love a big, flat backyard. Up to $350K.
- Nice neighborhood (love The Pointe), 3-4 BR on one level, up to $340K in good condition.
- Savage – 3BR townhome - At least one basement-level bedroom, good condition, up to $140K.
If you plan on selling in the future, please call us for a confidential interview. We are aggressive, knowledgeable about our local market, and we think outside of the box. We would appreciate any opportunity to earn your business.
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Edina Realty
Chairman’s Circle Award – $20 Mil (68 Homes) Sold in 2012
Ranked #1 for Home Sales in Savage with Edina Realty
Relocation and Short-Sale-Certified
Phone: 952-212-3597