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Lakeville Real Estate Market Booms in 2012

Median prices are way up over previous year's levels, but Realtors say there's now a new problem: Not enough homes on the market to meet demand.

Boom.

That's what 2012 was for Lakeville's real estate market.

And it wasn't limited to the south metro.

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 Lakeville rose a spectacular 10.2 percent in 2012, from $205,000 to $226,000.

The number of days homes spent on the market dropped dramatically, too. In Lakeville, the average home sale now requires 104 days, a 23 percent drop from the 136 days required to sell a home at the end of 2011.

Even with the spectacular rebound in prices, however, prices have a long way to go before returning to the values of 2005 and 2006.

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.”

In Lakeville, there were 257 homes for sale at the end of 2012, down 20.3 percent from the same month a year earlier.

Fazendin believes the problem will self-correct, however.

“Sellers soften 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.” 

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