Northland housing market hotter in 2016

Here’s a look at the latest numbers from DAAR, the Minnesota Association of Realtors and the Wisconsin Realtors Association.

Prices

Median prices rose in many communities across the region last year, dipping only in Hermantown and Carlton and staying flat in Two Harbors compared to 2015 sales.

“While people often ask if it’s a ‘seller’s’ or a ‘buyer’s’ market, the answer to that question really depends on a number of factors including location, price range, and features of the property,” DeSanto said.

Overall, the region’s median price hit $156,000, up 3.6 percent from 2015. For the most active area markets, sale prices had a wide range.

  • Duluth: $161,459, up 4.2 percent
  • Douglas County: $139,000, up 11.2 percent
  • Cloquet: $133,950, up 3.3 percent
  • Hermantown: $258,000, down 7.3 percent
  • Two Harbors: $145,000, flat

To compare, the state’s median home price rose to $208,500, up 7 percent.

“We will likely need years of improved wage growth to account for recent price gains,” according to the Minnesota Association of Realtors annual report.

The national median home price rose to $232,000 in December, marking the 58th straight month of year-over-year gains, according to the National Association of Realtors.

Sales

New listings in the region were down, but closed sales continued to climb and homes sold faster in 2016. Homes were selling in 75 days on average after many years trending between 80 and 100 days on the market.

There were 3,105 closed sales last year, up nearly 10 percent from 2015. Much of the increased activity was in rural areas such as Barnum, Virginia and Esko, though closed-sale increases in more urban areas were notable as well.

  • Duluth: 1,414, up 2.2 percent
  • Douglas County: 561, up 3 percent
  • Cloquet: 248, up 13.8 percent
  • Hermantown: 106, up 5 percent
  • Two Harbors: 122, up 3.4 percent

Minnesota saw a total of 86,694 closed sales last year, up 5.5 percent from 2015.

National sales, at 5.45 million, were at their highest level since 2006.

Etc.

Local sellers are getting pretty close to listing prices on their homes, as data shows they averaged receiving 93.7 percent of the original price received last year.

That and other factors went into the decline in the affordability index, which compares median household incomes to median home prices. Despite the fall in affordability over the past few years, the median income — $48,331 in St. Louis County — is still twice what is necessary to qualify for the median-priced home. Pre-recession affordability was much lower, in comparison.

Finally, the home supply — a measure of how long it would take to sell out of existing inventory of homes for sale — fell to 5.3 months, its lowest in years. A low supply, coupled with higher demand, can help raise home values.

“The real estate market may differ significantly from Two Harbors to Hermantown to Barnum or even within the same city depending on the type of property in question,” DeSanto said. “That’s why it’s always imperative to talk to a Realtor to find out what the market is doing for your individual goals.”