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FOR-SALE MARKET ANALYSIS <br /> Introduction <br /> Maxfield Research Inc. analyzed the for-sale housing market in Elk River by analyzing data on <br /> single-family and multifamily home sales and active listings; identifying pending for-sale <br /> developments; and conducting interviews with local real estate professionals, developers and <br /> planning officials. <br /> Overview of For-Sale Housing Market Conditions <br /> Table FS-1 presents home resale data on single-family and multifamily housing in Elk River from <br /> 2000 through May 2012. The data was obtained from the Regional Multiple Listing Services of <br /> Minnesota and shows annual number of sales, median and average pricing, average days of <br /> market, cumulative days on market, and percentage of sales that are lender-mediated (i.e. <br /> short-sale or foreclosure). It should be noted that lender-mediated sales were not categorized <br /> until July 2008 and the cumulative days on market were not calculated until 2006. <br /> Table FS-2 breaks down resale activity from Table FS-1 into single-family and multifamily <br /> resales. The following are key points observed from our analysis of this data. <br /> • Like across the Twin Cities Metro Area and the nation, pricing peaked in 2005 & 2006 at the <br /> height of the real estate boom. The average and median sales price plateaued at roughly <br /> $254,000 and $234,900 respectively. <br /> • Between 2000 and 2006, the median sales price increased annually from $159,000 to <br /> $234,900, a gain of+48%. However, from 2006 to 2011 the median sales price declined to <br /> $132,000 (-44%). <br /> • Sales prices increased between 2009 and 2010, mostly a result of the first-time homebuyer <br /> tax credit that was available in the second half of 2009 through September 2010. The tax <br /> credit also spurred transaction activity, resulting in nearly 400 sales in 2009 (+17.4% over <br /> 2008 sales). <br /> • Since 2000, the average and median sales price have decreased by 15.6% and 17% <br /> respectively. The average number of resales has averaged about 410 sales annually during <br /> this time. <br /> • The number of lender-mediated properties has accounted for over one-half of all home <br /> transactions since 2009. Through May 2012, 57% of all resales have been lender-mediated. <br /> The high number of foreclosures and short sales will continue to keep pricing down. <br /> MAXFIELD RESEARCH INC. 59 <br />