Realtors optimistic about housing market

Low interest, new businesses help sales

By Bob Williams | The Daily Journal

Published Friday, June 15, 2007

The national slump in the housing market has affected Minnesota, according to data from the state Department of Revenue, but interest rates remain historically low and recent new business in Fergus Falls has local realtors optimistic about the local market.

“There’s no question the market has softened in Fergus Falls, but people are still buying houses,” Investment Realty Northwest Realtor Jim Worner said. “You always have to remember, things that happen nationally, like in Los Angeles or San Francisco are driven by the economic situations in those towns.”

Worner mentioned the new ethanol plant attracting more potential home buyers to Fergus Falls as well as the new Affiliated Computer Services facility in the renovated Pamida store, which created 18 jobs to start with prospects of 75 more, as reasons to think more people will be looking to buy.

Conversely, the situation in Wahpeton is moving in the opposite manner. If a new business does not move into town to replace Imation, the market there will certainly suffer.

“ACS and the ethanol plant could have a very positive effect,” Worner said. “It certainly is not time for people to panic.”

According to Worner, a good house in the mid-price range above $100,000, yet under $170,000 will sell quickly, while lower priced houses are currently on the market longer than usual.

Location continues to drive housing prices, according to a new report from the Minnesota State Demographic Center. Some areas of Minnesota continue to demonstrate strong price growth — close to 50 percent — despite the overall sluggish real estate market.

Prices shot up 48 percent in Lake of the Woods County, 47 percent in Red Lake County and 33 percent in Clearwater County from 2003-04 to 2005-06, according to the report. Median prices fell in Kittson, Lake, Murray and Traverse counties over the same period.

“This is one of the few data sources that allow us look at trends throughout the state, not just in the Twin Cities or other urban areas,” said Martha McMurry, a research analyst with the State Demographic Center. County data is reported for a 21-month period to allow more meaningful results in small counties.

Median sales prices have risen in Otter Tail, Grant and Wilkin counties substantially since 2000. Prices in Otter Tail County are up 43.1 percent since 2000 and 18.6 percent since 2003. In the same time frames, prices rose 37.3 percent since 2000 and 24.1 since 2003 percent in Grant County and 22 and 5 percent in Wilkin County.

Median prices in rural areas remain much lower than in the Twin Cities, ranging from a low of $30,000 in Kittson County in northwestern Minnesota to $255,000 in the Scott County suburbs of the Twin Cities. The overall statewide median price for 2005-2006 was $201,000 compared to $181,000 for 2003-04.

In the first nine months of 2006, 176 homes were sold in Fergus Falls at a median price of $95,000 compared to Alexandria where 146 homes were sold at a median price of $135,650 and 147 homes in Detroit Lakes at a mean of $118,250.

The report is available online at http://www.demography.state.mn.us.

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