It’s a new year! Now that we’ve fully recovered from the holiday season (and have all the data), let’s take a look from 30,000 feet at what sold on Lake Minnetonka in 2017, how the market trended, and make some predictions for 2018 based on that data. Just to be clear, in this post we are discussing Lake Minnetonka lakefront home sales only. This means condos, townhouses, and single family homes, both previously owned and new construction, unless otherwise specified. All information is gathered via the Infosparks market data web platform, and all data is from the Northstar MLS system. If we become aware of any errors or changes in the data, we’ll correct them here.
Overall, new listings decreased year over year
While the data does not correct for relisted homes, Lake Minnetonka saw an overall decrease in direct lakeshore listings in 2017, down 12.8% from 2016. Single-family homes saw the biggest decrease with just 270 opportunities to own a piece of the lake. There were more condominiums for sale (35 vs 25 in 2016), and rare townhome listings remained unchanged at 9. Part of the uptick in condominium listings can be attributed to the yet to be built Serenity Hills project, which is a planned 55+ community set on 12 acres on the north shore of Halsted Bay. With a total of 70 units in 6 buildings planned, we can probably expect these units to add to the number of closed condo sale on Lake Minnetonka for a few years to come. (We have more information on this exciting new development – contact us for more information.) Single-family inventory in 2017 was the lowest we’ve seen on the lake since 2005.
But closed sales increased 5.8%
Even with low listing inventory, closed home sales on Lake Minnetonka were up a healthy 5.8% in 2017. We saw 183 single-family home sales (+5.2% from 2016’s 174), 25 condo sales (same as 2016) and 10 townhouse sales (vs. 6 in 2016). That’s 218 total sales in 2017 vs. 206 sales in 2016.
Homes also sold faster than they have in since at least 2007. Median days on market until sale for the overall market came in at 66 days, down nearly 50% from 2016’s 127 days. Condos and townhouses saw the biggest decrease in median market time. Single family homes also saw abot a 33% decrease in market time vs. 2016.
So, Lake Minnetonka inventory levels fell really far
The overall inventory of lakefront homes as measured by the “months supply” metric plummeted to 6.3 (using a 12 month rolling average, which allows us to look at the year in its totality), down a whopping 30% YOY. Single-family homes ended at 6.9, down from 9.9 in 2016, condos on the lake ended 2017 at 1.9, down from 3.2, and townhouses ended at a microscopic 1.5, down from 2.2 in 2016. To put this in perspective, A balanced market is generally considered to be around 6, a seller’s market is 5 or less, and a buyer’s market is 7 or more. So the overall market has slid into the balanced territory – a place it has not been in years. In fact, it has not been at this low of a level since at least 2007.
Which pushed prices up
Overall median sales price pushed up 18.5% YOY (using the Infosparks end of December YTD numbers). Lake Minnetonka single-family home sales had a median sales price of $1,200,000, up 26%. Condominiums and Townhouses posted 40+% gains in median sales price, and the overall market saw an 18.5% increase. This increase can be atributed in part to bigger houses selling, but also to robust price per square foot growth. Let’s look at Lake Minnetonka single family homes that sold in 2017. We see 10.1% growth, a big gain over 2016 and reversing the losses in that metric sustained last year. Condo median PPSQFT jumped nearly 30%. Townhomes remained flat at $269 per square foot. Looking at those numbers historically, we are still far, far off from the peaks of the market in 2006 and 2007. 2006 saw the overall number at $357 PSQFT and condos at $256 PSQFT. In 2007 single-family homes came in at $404 PSQFT and townhouses at $323 PSQFT, both historical highs.
Want to know what your house is worth in this market?
So, it feels like 2018 is going to start very fast. Buyer representatives are asking for leads on houses that will be put on the market this Spring. Lake Minnetonka may end up being a seller’s market at every price point when it is all said and done. But, if enough home owners look to cash out their equity, we may end up with excess invetory at the higher price points. Only time will tell.