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Local realtors see strong home sales in 2021 despite tight housing market

Home buying is fueled by many factors, including low interest rates.

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Edina Realty signs along South Shore Dr. in Worthington Minnesota. Tim Middagh / The Globe

WORTHINGTON — People looking to either buy or sell a home in Worthington or nearby communities know how tight the housing market is, and local realtors confirm that 2021 was one of the best years in recent history.

“We’re definitely up from years past, which is great,” said Jason Johnson, co-owner of Johnson Builders & Realty of Worthington. Their realtors represented either the buyer or the seller in 181 residential property transactions in 2021.

Across the Multiple Listing Service, new listings were up 4.1% in 2021, while the number of closed (completed) sales increased 11.9%. In addition, Johnson said the median home sale price increased from $185,000 in 2020 to $225,000 in 2021.

At Worthington’s Edina Realty office, Staci Murphy said few homes are currently available for buyers, particularly since Halloween.

A realtor since 2006, Murphy really began to see demand for housing increase in 2020.

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“We had all kinds of buyers and no properties for sale,” she said.

When the MLS began promoting the “Coming Soon” status on properties in 2021, Murphy and all other realtors — regardless of their agency affiliation, and with whom the property was listed — could promote a property, just not show it.

“People were buying properties, sight unseen,” said Murphy. “If you had a client looking in that price range for that kind of house and it was coming soon, someone else may have gotten an offer and it was accepted before it even hit the open market. That happened a lot (last) summer.”

Genny McCuen, broker/owner of RE/MAX Premier Realty in Worthington, agreed that 2021 was a very busy year for real estate, not only in Worthington but in smaller communities in the region.

“Our agents service about 45 miles in any direction … even the surrounding communities have experienced the strongest year in real estate with quick sales and strong pricing,” McCuen said. “We don’t have great inventory, but we have quite a bit of pre-approvals. We have a lack of balance there that creates a seller’s market.”

Multiple factors drive sales

People move in and out of a community for a variety of reasons. A home may be desired in Worthington because it’s where the individual works. Other appealing factors are amenities — including the lake, health care, the school system, churches and shopping options.

“I think the city of Worthington is doing a good job to add amenities to help keep people in town,” Johnson said. Low interest rates, however, seem to be the primary driver.

In 2021, local realtors saw renters become homeowners, as well as existing homeowners upscale to bigger, newer, nicer homes.

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The demand drove prices higher to the benefit of sellers.

“Worthington usually has maybe 20 to 35 properties at any given point in time, and I think there’s seven available right now,” Murphy said just days before Christmas. “Some properties are still getting multiple offers.

“Properties were selling above asking price — not $30,000 to $40,000 like larger markets,” she added of sales last summer.

Higher prices drove some homeowners to list their property with hopes of buying a different home in the community, but it didn’t work out as planned.

“We have had a couple of situations where someone put a house on the market and then scrambled to find a rental property until they could find a house that they wanted,” Murphy said.

While sellers may see the current market as an opportune time to list their home, McCuen said buyers need to recognize this is also probably one of the better buyer’s markets.

“Interest rates very much impact buyers; not so much sellers,” she said. “For those in a position to buy, there probably isn’t a better time. A lot of people use real estate as (an investment for) retirement.”

As inflation rises and the risk increases for higher interest rates, McCuen said Worthington isn’t a market that would typically see a price reduction for homes. Where the housing market may settle in larger communities, Worthington seems to plateau, she added.

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“The reason we plateau is the inventory shortage has been here for a while,” McCuen said. “We’re still seeing growth because of people moving in.”

New housing helps

McCuen said new development on the west side of Worthington will stimulate new housing, providing options for people to move up, and others to move into existing, older homes in the community.

“All these people out there in rentals may then be able to afford something,” McCuen said. “We have a shortage of rentals as well, so the rents have gone up a little bit, as well as the price of buying a home.”

Johnson said he continues to see demand for condo-style living in the community.

On the construction side of Johnson Builders & Realty, six condominiums built in the Cherrywood Addition in 2021 were nearly all pre-sold, and another two-unit condo is under construction, with one of those units already pre-sold.

“A lot of people appreciate condo associations — you feel like you have people watching your place a little when you’re gone,” he said.

Just before Christmas, there was only one active listing for a condo within the city of Worthington.

Looking ahead to 2022

All three realtors anticipate continued strong housing sales in 2022, if and when homeowners are willing to sell.

“I would expect that prices continue to stay strong,” Johnson said. “We’re pretty fortunate to have, in our area, good agents that know the market, work well together and hopefully 2022 is a hot market as well.”

“I think across the board, the MLS has helped everybody,” added Murphy. “Everybody’s goal is to get their seller’s home sold and to get their buyers a place to buy. Everybody’s working towards the same goals.”

Related Topics: HOUSINGREAL ESTATE
Julie Buntjer became editor of The Globe in July 2021, after working as a beat reporter at the Worthington newspaper since December 2003. She has a bachelor's degree in agriculture journalism from South Dakota State University.
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