Friday, August 25, 2017

What Goes Down Must Come Up……EVENTUALLY, Part 2

Quite some time ago, I wrote this blog post concerning the real estate bubble and the prospects for real estate values in our membership area (Lake and Cook counties).  It’s interesting to go back and read my thoughts and opinions at that point in time.  Market values have rebounded but it took much longer than I obviously thought at the time of that blog post.  It was really an unprecedented event in our economy, both locally and nationally.
While real estate values have fully rebounded in most areas of the country and are actually escalating rapidly again in the Twin Cities and Duluth, our experience has been different.  Property values in all categories bottomed out in 2010.  All property values declined substantially; the most expensive homes, typically Lake Superior and inland lake properties, were hit the hardest.  Bare land also plummeted in value.  All properties in our membership area have rebounded in value but certainly not equally.    
As of the end of 2016, typical family homes (defined as $175,000 or less) have usually regained all their value and are appreciating once again.  Average prices in this category have increased by 36% since 2010.  The number of sales in 2016 increased by 25% over 2015.
Inland lake homes have also bounced back, up 58% from their lowest point, which means they are close to having regained all their peak value.  Even more impressive, the number of sales in 2016 increased by 81% over the prior year. 
Lake Superior properties typically have not fully reclaimed their lost value.  They have rebounded only 18% from their low point.  One bit of good news is that the number of sales in 2016 increased by 66% for this category, which should indicate rising values.
Bare land prices are far from fully recovered, having only recovered 20% of their lost value.  However, the number of sales in 2016 increased by37%.
All of these numbers paint a picture of a recovering real estate market.  Perhaps the best news yet is that the real estate market in 2017 has been even more active across the board.  
Looks like the definition of EVENTUALLY is the summer of 2018………….

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