Home sales on the rebound in the Waconia area
When the economy took a nosedive in 2008, the real estate market took a real hit. The value of homes dropped and foreclosures and short sales increased at alarming rates.
Although people have become almost conditioned to expect only doom and gloom when it comes to the real estate market, there are indicators that suggest that the market is getting back on track — and the signs are showing up in Waconia, too.
According to the Minneapolis Area Association of Realtors, sales in Waconia are up approximately 10 percent through July 2012 compared to this time last year.
The news isn’t a surprise to Jeff Schulz of REMAX/Advantage Plus and his team, who has already sold more than 100 homes so far this year, compared to 81 homes in 2011.
“There have been some really good things going in Waconia, both in existing home sales and in new construction,” Schulz said. “Things are very active. Specifically for our team, we’ve seen sales up 25 percent compared to last year.”
Record low interest rates — rates are at 40 to 50 year lows — and low inventory levels are among the factors that are aiding the recovery of the real estate market.
“The combination of low interest rates, well-priced homes and depleted inventory levels make it a great time to consider a home purchase,” Schulz said.
The lower inventory levels equate to fewer choices on the market, which leads to an increase in sales for the homes that are on the market. Schulz said there are 18 percent fewer homes on the market in Waconia now than compared to a year ago.
“If I’m a seller, that’s good news,” said Schulz, who added first time homebuyers and “move up” buyers are among those benefiting from the current housing market.
“It’s been a long time since we’ve heard the phrase ‘multiple offers’ but we are running into multiple offers on some of our home sales, which is good news for sellers,” he said.
Another good sign for sellers is that homes are starting to spend less time on the market. According to the Minneapolis Area Association of Realtors, homes sold this year spent 19 percent fewer days on the market than they did compared to last year.
“That’s also great news if you’re a home seller,” Schulz said. “It’s a much more balanced market from the previous four years where it was strictly a buyers market.”
In another sign of the improving housing market, Schulz noted that he is seeing a slight increase in the average sale price of homes on the market.
“In Waconia, sales are up and sellers are getting closer to the list price for their homes,” he said.
Of course, existing home sales are only part of the equation. The construction of new homes is another important aspect of the market and it, too, is starting to pick up.
According to John Hilgers, the Planning Director for the city of Waconia, the city issued a total of only 28 new home permits in 2011. It’s a different story in 2012. As of Sept. 7, the city has reviewed and approved a total of 78 new home permits for the calendar year 2012. Of those 78 permits, Hilgers noted that 59 have been picked up and activated and 19 have been approved and are ready to be picked up by the builder.
The renewed interest in new homes has not gone unnoticed by area realtors.
“We’re working with a lot of new homebuyers on new construction and that has been great to see,” confirmed Schulz, who noted a lot of activity in the Interlaken and Legacy developments in Waconia.
One might wonder where the people who are buying and building homes are coming from. Schulz noted that Waconia remains a highly desirable place to live, with its amenities, medical facilities, quality schools, the lake, and so on.
“We’re seeing a lot of empty nesters or grandparents moving to this area (because of what it has to offer) or to be close to the kids and grandkids,” he noted.
Today’s homebuyers also include people who were living in apartment buildings.
“We’re losing tenants because it’s a good time to buy,” noted Lisa Hellerud-Schuth, the property manager for Interlaken Place, a 48-unit apartment building located on the southeast side of Waconia. “I’m sad to see them leave because they’re good tenants but it’s nice to see them making a positive step in life.”
Hellerud-Schuth has worked at Interlaken Place since April 2012. As far as Hellerud-Schuth knows, the building has never been completely leased — until now.
“It is completely leased and I have a waiting list, which makes my job a little easier,” she said. “We haven’t had a lot of turnover since I’ve been here. The majority of people who leave are leaving because of job transfers or they’re buying a house.”
Whatever reasons people are buying homes, signs are pointing to a rebound in the real estate market. Schulz is optimistic that the trend will stay in a positive direction.
“I don’t have that fear (that things will go back to how they were in 2008),” he said. “A lot of those problems extend from the banks and lending practices and those have definitely changed. The forecast for 2013 looks promising. We still have competitive interest rates and a balanced supply of homes on the market … we are certainly encouraged for 2013.
“Waconia was not immune to distressed sales during the downturn,” Schulz added. “We’re not out of the woods yet but we’re getting there.”