By David Garves, Associate Broker
We waited a long time, but Summer didn't disappoint. While much of Spring felt like winter part 2, and even the beginning of summer wasn't heat index type of weather - during the state fair and throughout the first weeks of school the temperature has made everyone remember what heat, humidity and a real Minnesota summer provides. Similarly, the Maple Grove Real Estate market waited a long time to heat up again following years of corrections and dropping values - but this summer has provided a reminder that home values go up, and real estate is also an amazing investment for most home owners.
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While 1 year comparisons are always nice to take a little snapshot of a market, widening the lens a little and getting a bigger picture is sometimes needed to show the true impact of market conditions. Below, I've looked at 5 years worth of Demand (Sold Homes), Supply (New Listings) and pricing information to get that bigger picture look at our market.
DEMAND - Sold Homes
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Despite rising interest rates, buyers continued to come out and take advantage of historically low rates, and continued attractive prices for homes setting a 5 year record for the amount of home purchased in Maple Grove during July & August at 277. In fact, 2013 produced the most home sales in Maple Grove during that time period since the top of the bubble in 2005 when there were 290 homes sold. While drastically different conditions exist today making it more difficult for buyers to be approved for loans, and buyers in general being more cautious, it's a definite indication that buyers are more than willing to accept current values as a buying opportunity! < SEE CHART: July/August Sold Homes >
SUPPLE - New Listings
There was a lot of news out this summer about the market being a "sellers market" due to the shortage of homes on the market. Looking at the chart below, it's easy to see that after 2 years of dropping numbers in home listings, there was in fact a drought in the market. Maple Grove home owners responded however, realizing that the "price sale" on homes was over and set out to determine a more fair value for the product. While 317 homes this summer was still less than 2009 & 2010, the fact that a fewer number of those homes were bank mediated (short sales & foreclosures) helped strengthen the market as the actual home owners are back setting prices in the new market - not banks! < SEE CHART: July/August New Listings >
Price Index:
Throwing out all the data, bottom line is prices do seem to be following the trend expected from the data. While still a long way from the over inflated numbers of 2005 & 2006, both Average sales price and Average price per square foot improved drastically in July & August.
< SEE CHART: Maple Grove Homes Sales Price >
While basic supply/demand economists may be concerned that the increased home listings (supply) may slow down increasing values, the truth is we NEEDED more homes in our Maple Grove market. The shortage of supply near the beginning of buying season did push prices up sharply, however it also forced some buyers who wanted to be Maple Grove residents into other communities. Now, at healthier levels of homes on the market, it will be interesting to see if the seasonal changes slow demand as is standard in ours and other Minnesota markets, or if buyers continue pushing forward to get into homes before rising interest rates and prices make it more difficult to buy.
David J. Garves
www.maplegroverealestateinfo.com
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WAY BACK MACHINE: (For all the families with kids starting Senior year at Maple Grove and Osseo Senior high students)
A Maple Grove home purchased in July-August of 1995 by a family who had a baby roughly 9 months later, would now have a high school senior preparing to graduate from Maple Grove or Osseo High School. The average price paid for that home in 1995 was $128,445 for a home averaging slightly more than 3 bedrooms (3.14) and 2 baths (2.19). Average price per Sq. Foot for those homes was $73.14.
