Prices of homes sold in Spring Valley continue to climb

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The prices of homes sold in Spring Valley continued to climb, but the pace of sales took a substantial dip in 2018, according to statistics from Southeast Minnesota Realtors, an organization that serves the 11 counties in southeastern Minnesota.

The trends in Spring Valley mirrored other cities in the region, although the percentage drop in closed sales was the steepest of any of the 25 cities in which SEMR measures sales. Still, the actual number of 42 sales that closed in 2018 was substantially higher than the three surrounding communities of Chatfield, which had 34 closings in 2018, Grand Meadow, which had 13, and Preston with 24.

Spring Valley’s median sales price of $144,500 continued a steady increase over the past four years. SEMR data includes all houses that are listed with real estate agents.

“While buyers have become more discerning when making an offer on a home, our area continues to see consumer confidence strong enough to drive prices upward,” said SEMR President Kyle Swanson. “We expect that trend to continue, albeit at a much slower pace.” 

Swanson said he believes that the real estate market can’t sustain that trend indefinitely, but there is still a backlog of buyers in the market for a home and the market in southeast Minnesota remains strong.

Homes sold by real estate agents in Spring Valley in 2018 closed at 99.7 percent of the list price, which is above the regional figure of 96.9 percent of all single-family homes. All of Spring Valley’s sales were single-family homes while 9.7 percent of the regional sales were townhomes or condominiums.

The percentage of original list price received improved 1.6 percent from 2017, the third highest in the region. Preston had highest change with a 3.5 percent increase to 97.6 percent while Grand Meadow had the biggest drop in the region, a 3.5 percent decrease to 97.9 percent (some cities exceed 100 percent).

Preston also showed the region’s greatest increase in median price for homes sold, rising 28.2 percent, while Chatfield’s increase was fifth best at 18.6 percent. Grand Meadow had the steepest decline of the region’s 25 cities with a 19.2 percent drop.

Spring Valley’s 11.6 percent increase to $144,500 was above the combined region median price increase of 9.0 percent. However, the city’s 2018 median price since 2014, when the median for homes sold in Spring Valley was $99,000, had the fifth highest increase in the region at 46.0 percent.

Median prices in the region for 2018 range from a low of $105,000 in Austin to a high of $423,000 in Oronoco. The next highest cities after Oronoco are La Crescent at $261,000, Byron at $259,950 and Rochester at $233,000. At the other end Grand Meadow is the second lowest at $106,000, Albert Lea is third lowest at $108,500 and Blooming Prairie is next at $124,000.

Preston had the highest percentage increase in closed sales in the region, a 60.0 percent jump, and the second highest percentage of inventory, a 70.0 percent jump. Chatfield had the third highest increase in inventory at 66.7 percent. Dodge Center led the way with a 100 percent increase.

The real estate market in southeastern Minnesota in 2018 delivered a more seasoned prudence toward residential real estate, according to SEMR.  Home buyers, now steeped in several years of rising prices and low inventory, became more selective in their purchase choices as housing affordability reached a 10-year low.

Among the indicators that help shape the real estate market in southeastern Minnesota, SEMR noted the following.

• Sales: Closed sales were down 5.4 percent to finish the year at 6,200. A booming economy would seem to indicate more sales, but fewer homes to choose from coupled with lower affordability made it tougher for buyers in 2018.

• Listings: Year-over-year, the number of homes available for sale was higher by 7.3 percent. There were 1,216 active listings at the end of 2018. New listings increased by 1.8 percent to finish the year at 7,487.

• Prices: Home prices were up compared to last year. The overall median sales price increased 9.0 percent to $191,900 for the year. Single-family home prices were up 8.7 percent compared to last year, and townhouse-condo home prices were up 8.3 percent.

 “We’re looking at a market balance in 2019 if a positive economic outlook continues, coupled with responsible lending practices and more available homes for sale,” Swanson said.