WILLMAR -- Newlyweds Sarah and David Nelson want to build a new home on land he owns near Spicer, but for now they are searching for their first home in Willmar.
"We are planning to eventually build a home," Sarah says. "We just can't afford to build now."
The Nelsons have been looking for a starter home for a couple of months, and are approved for their first mortgage. They've only looked at one home, because their work schedules don't allow them much time to look at available homes together.
Plus, they are a bit nervous about spending that much money, she says. Having lived in apartments, they want a quiet neighborhood and good resale value.
The Nelsons are stepping into a local real estate market that is more steady than the more volatile markets on the coasts or even the market of the Twin Cities metro area, according to a Willmar Realtor.
ADVERTISEMENT
"There is no bubble here, we didn't have the high swing," says Mary Peterson of All-Star Realty. "Conversely, we didn't have the big dip."
Data from the West Central Association of Realtors shows that local home buyers are a bit more cautious this fall than they might have been previously. Numbers show 49 home sales in Willmar in the fourth quarter of 2006, with an average price of $141,181 and a median price of $129,000. In the third quarter, the association's numbers show 85 home sales in the city with an average price of $144,558 and the same median price. The median price means that half of the homes sold were more than that price and half of the homes were sold for less than that price.
A key difference between the third and the fourth quarters of 2006 is that the days on market --the time a property is for sale -- increased from 112 days to 155 days. Days on market is the number of days from when the home is listed for sale until the closing on the property.
Total 2006 figures show 273 homes sold in Willmar, for an average price of $142,161, a median price of $129,900. The average days on market is 120 days.
In Kandiyohi County, 468 homes sold in 2006, with an average price of $160,314, a median price of $137,750. The average days on market was 134 days. Duaine Amundson, banker at Heritage Bank, credits local economic development and job growth for the strength of the local real estate market.
"There are companies bringing in people all the time," he said.
In the residential market, as of Dec. 20, there were 298 residential listings in Kandiyohi County. Of those listings, 159 properties were in the city of Willmar. The median price of the properties listed was $169,900, with a range in list prices from $42,000 to $1,599,000.
The $1,599,000 home was a waterfront listing, one of 40 lakeside homes currently on the market. Waterfront properties ranged from $51,900 for a condo to the $1,599,000 home, both on Green Lake, with a median price of $321,450.
ADVERTISEMENT
The past five years have been a whirlwind of refinancing existing mortgages and homeowners took advantage of historically low interest rates and the growth of the local economy, said Jon Grabow of Lake Region Mortgage.
Numbers are down from last year, but when put into proper perspective, are not alarming, he said.
"It is a softening (of the market), but it's not a signficiant softening," Grabow said.
Amundson sees a steady increase in mortgage business over the past five years, even when the refinancing boom years of 2003 and 2004 aren't included in the equation. Interest rates, while they are increasing, are still attractive, at least from a historical perspective. Bankrate.com's weekly national mortgage survey of large mortgage lenders found a 30-year fixed rate of 6.23 percent on a $165,000 loan.
"You have to take a step back in history to realize that 6 percent is a great rate," he said.
