MN Lake Homes- Prices and the 2009 Market

2009 has come and gone and there is no doubt that is was a difficult year for many. We watched clients, friends and loved ones struggle in various ways due to troubling economic circumstances. It seems as though no one was completely immune to the challenges the year brought.

The Brainerd Lakes, Whitefish Chain, Gull Lake Chain areas have experienced a declining market since its peak in 2006 with a reduced number of annual closed sales each subsequent year. We have also seen a continual reduction in the prices properties are selling for as you will see in the MLS statistics outlined below. It is safe for us to say that the market has seen a 30% reduction in values. The effect on the Whitefish Chain and the surrounding area lakes is strikingly similar. No one can predict when we will hit the bottom or how we will recapture this lost equity.

We project it will take some time before we start to see property values increase. Inventory levels remain high with sales needing to be made before we can get to a healthy balance between the number of listings on the market and the number of sales taking place. We currently have a 3 year inventory of listings in the whole of Crow Wing County. These statistics vary with different price ranges. In reviewing the market data from 2009 we find that Crow Wing County had a 7.9% increase in sales from 2008 to 2009. For our whole Brainerd Area Greater Lakes Associations of Realtors that increase was 6.4%.

The good news is that our industry has somewhat “purged” itself of those who got in to just make a quick buck. True professionals have survived.   Larson Group is definitely a mainstay in the Brainerd real estate and Crosslake, Minnesota - Whitefish Chain Areas and we not only survived 2009; we thrived! We exceeded our own goals and are proud to say that Larson Group Real Estate/Shores & More was involved in 35.7% of all sales of improved properties on the Whitefish Chain in 2009 and we increased our total Minnesota lakeshore property sales by 38% from 2008 to 2009.

All of us at Larson Group Real Estate/Shores & More are extremely passionate about the Brainerd Lakes Area and being an integral part of the community. We appreciate your confidence in making us the Brainerd Lakes Area’s #1 real estate team! Now is a phenomenal time to purchase. Our market currently has unprecedented inventories of quality MN lakeshore cabins, MN lakeshore homes, MN lake lot properties at pricing levels not seen since 2003. If your have any family, friends, or acquaintances considering a Minnesota lake home purchase or property upgrade please encourage them to contact us. We are always here to help and look forward to putting our expertise and experience to work for you.

Psychology of Current Buyers & Sellers

Currently in our market we have two very different sellers.  The first is the traditional seller that has taken care of their property and has put time and resources into the maintenance and improvements.  The second is the foreclosure market seller.  The property is bank owned and these homes are usually in a distressed state and many times have been stripped of appliances and other fixtures.  Because the property is bank owned and in a distressed condition there is a very high motivation level to sell and they are listed at or below current property values.  The traditional sellers have never had to experience the foreclosure seller as their direct competition in our market and it has added a level of difficulty to their selling experience.

The above scenario has created two very different Brainerd real estate markets that buyers and sellers are now participating in.  Buyers that want to purchase a distressed (below market value) property have actually created a seller’s market.  Multiple offers are very common on these properties and they are selling for as much as 10 percent higher than the asking price.  Then we have the buyers that are looking at the traditional sellers’ homes.  This market is characterized as a buyer’s market with little motivation or urgency to purchase.  When buyers look at these homes they are not as motivated to make an offer as they are looking at several homes at a time and going through the process of defining their top two or three properties to consider.  That slows the process down.  The last step of writing the offer is not happening.  The buyers are hesitant to write the offer on the chance that something better may come along.  The traditional seller is caught as they don't want to negotiate against themselves by making the buyer an offer.

What does all this mean?  We feel that it is going to take time to work through all of the bank-owned, distressed properties currently in the market and it will not improve in the near future.  Traditional sellers need to position themselves as the best value compared to the other traditional sellers while understanding what is happening with the market as a whole.

If you are a seller in 2010 we can help you to better understand where you fit into the current market which will greatly increase your chances of selling in 2010.  We do feel there will be a window of opportunity to get your property sold this year.  No one can predict the future.  We are focused on the current market conditions (increased buyer motivation to get a bargain, low interest rates and high inventory levels) and how to position your property within this matrix.

Whether you are considering a sale or looking to purchase this year, please contact us so that we can develop a marketing strategy to help you accomplish your real estate goals.

Bruce Larson & Robert Birkeland

Larson Group Real Estate - Shores & More

We specialize in real estate sales of:  MN lakeshore property, MN lake  homes, MN lake lots on the Whitefish Chain and surrounding area lakes including Pelican Lake, Horseshoe Lake, Kimball Lake, Ossawinnamakee Lake, Upper Hay and the Crosslake, Pequot Lakes, Breezy Point, Nisswa and Merrifield areas.