It appears that the luxury market in Minneapolis and Saint Paul has seen an increase in market action since May, although not what was seen a few years ago. While we have been going up, the Market Action graph tells us it is still a hot buyer’s market…we are currently at 12.75. A score above 30 would transition to a seller’s market. I don’t see us obtaining that level for quite a while. Sorry.
But to give you a better idea of how the Twin Cities luxury market is fairing, I have included some Year-to Date market graphs through the end of August. Sadly, for sellers, the average median luxury sales price for the area has been in a state of decline and fluctuation. Since January of this year, the average price of a luxury home has fallen $60,000, or 7% overall.
At the same time, the number of homes priced above $600,000 has increased over the last year. The spring buying frenzy helped clean out a lot of the winter inventory, but as summer progressed, new listings were brought onto the market. With less buyers purchasing, the inventory has had no where to go but up. Currently the inventory for homes priced over a million dollars has increase 42.8% since last August.
Thankfully, there is some good news. The time it takes for a home to clear the real estate market has declined in the last few months. While I don’t expect it to get much lower since winter is on the way, let’s hope it doesn’t get any worse. The ninety day rolling average for luxury homes is currently about 170 days, roughly six months.
For homes priced above $1 Million, the year to date monthly housing supply, as reported by the Minneapolis Area Association of Realtors is at 40 months! (meaning it will roughly take over three years to sell the current inventory of homes priced above $1 Million.) Yikes!
So what does this all mean for you? If you have a single family home to sell, and the fair market value falls between $500,000-1,000,000, you have a better shot of selling your home in the next 20 months. If you are priced above $ 1 Million, then expect your home to sit on the market for a while…extreme prices will have to wait even longer. Some high end, over the top luxury homes could even wait three years before they attract the right buyer.
Don’t fret though. Please, if you are looking to sell a home, make sure you choose an agent that not only has experience in the luxury home market, but make sure they have a web presence as well. It will take creative marketing to get your home sold, for the days of sticking a home in the MLS to see it sell in a few day are long gone.
P.S. Don’t forget to have professional photographs taken of your luxury home. Ask your agent what they provide. If they take the pictures themselves, please don’t hire them!