The southwest Minneapolis housing market had a strong year in 2015 and real estate experts are predicting more of the same in 2016.
The median sales price for homes in the southwest market was $339,900 in 2015 — up 6.2 percent from the same time period in 2014, according to the most recent local market update from the Minneapolis Area Association of Realtors.
The number of new listings increased 9.2 percent compared to the same time frame in 2014.
The southwest Minneapolis market includes Armatage, East Harriet, Fulton, Kenny, Kingfield, Linden Hills, Lynnhurst, Tangletown and Windom.
As for the Calhoun-Isle market, the median sales price was $361,100, up 14.6 percent in 2015 through the end of November compared to the same period in 2014. The market includes Bryn Mawr, Calhoun (CARAG), Cedar-Isles-Dean, East Calhoun (ECCO), East Isles, Kenwood, Lowry Hill, Lowry Hill East and West Calhoun.
Jim Grandbois of Lakes Sotheby’s International Realty, said 2015 was a strong year for real estate in southwest Minneapolis.
“Single family homes had an impressive year as indicated by a 20.8 percent increase in closed sales and an average sale price increase of nearly 5 percent,” he said. “With the market returning to pre-recession prices and remarkably strong buyer confidence, any homeowner considering selling in 2016 should find the perfect selling conditions of strong buyer demand, low interest rates and the low supply of homes, just a 2.8 month supply in our area.”
He said 2015 was one of the most “consistent years” in a long time.
“I listed a home this year in December, normally a very slow month, and it sold in multiple offers in just a few days. I expect the New Year to start out with this continued sense of excitement,” Grandbois said.
Homes in great condition that are priced appropriately are getting multiple officers, an indication of pent-up demand, he said.
He is also seeing more buyers who are willing to buy homes that need remodeling to bring them up to modern tastes.
“It is a golden opportunity to get into the area at a lower cost for anyone able to see the potential and take on the extra work. They will be nicely rewarded for their efforts, in my opinion,” he said.
Brian Weedman of Lifecycle Real Estate Services, which specializes in property management, renovating and selling in southwest, predicted there will be a shortage of quality rental homes in the area as more are building sold.
“Our rental portfolio of homes managed in the Lake Harriet area is about half what it was in 2010. We receive constant inquiries from prospective tenants asking what we have in inventory this year,” he said.
He said he worked with three buyers in 2015 that rented homes with the intention of negotiating sales during the first year of their leases.
“This worked out great for both buyer and seller. The seller reflected cost-savings in a lower price as they did not have to fix-up and paint the property, stage it, and take vacancies while marketing,” he said. The buyer received a great price on a property they would have otherwise not found.”
Overall, 2015 was generally a good year for the housing market throughout the Twin Cities, according to a recent analysis from the Shenehon Center for Real Estate at St. Thomas’ Opus College of Business.
Home prices, closed and pending sales, new listings and the percentage of traditional sales as opposed to foreclosures were on the upswing, but the low inventory of houses for sale continues to be an issue with buyers outnumbering sellers.
Herb Tousley, director of real estate programs at the University of St. Thomas, said he expects the median sale price of homes in the Twin Cities to increase 6 to 8 percent this year along with a slight uptick of the number of homes on the market.