Has the Winona area real estate market come full circle? Sales are up, foreclosures are down, and the forecast for 2014 is promising. Winona County is "emerging from a nearly five-year downturn," said Winona County Recorder Bob Bambenek.
Photo by Chris Rogers
After years in southern Missouri, Josh and Amanda Pederson returned to their Minnesota roots this fall, moving to Winona with their daughter Liana (at left) and their son Wyatt (at right). They were one of many families who bought a home last year and contributed to a significant turnaround in the real estate market.
While the area was spared the worst of the 2007 housing crash, foreclosures and slow sales continued into 2012. Last year, however, may signal a new chapter in the recent history of local real estate. According to year-end figures from the recorder's office, foreclosures dropped by half, going from a record high of 100 in 2012 to 52 in 2013, the lowest since the crash. The number of sales increased by roughly 10 percent.
In the last 16 months the real estate market rapidly transformed, stated Keller Williams Premier Realty Broker Bruce Domaille. Before, "there were way too many people trying to sell their houses and we had way too much competition," he said. Now, many sellers are getting multiple offers, he noted, calling it a seller's market. Coldwell Banker Skeels/Moore and Associates co-owner Jonelle Moore described the market as balanced, neither a buyer's nor a seller's market, but agreed that constituted a major change. The absorption rate — how long it takes homes to sell — has dropped considerably.
"It's been fantastic," declared Domaille. "We're much happier this year than last year," said Moore. While prices have increased slightly, they are still below pre-recession levels, Moore pointed out. However, more and more people are "taking the plunge" and buying houses these days, like Josh and Amanda Pederson
The Pedersons just finished painting the walls of their new Winona home last week and were considering where to put their furniture. The young couple with two children moved to Winona last November and looked at 30 houses before falling in love with their new home. It is a big relief to have the search and the paperwork over with, they agreed. "It's a place to settle down in and call home," Amanda explained. "Financially, it's a responsibility, but it's an investment for our future," her husband said.
Better economic times are making many buyers confident enough to make the investment in a home, local realtors said.
Changes in home finance are part of the uptick in sales and drop in foreclosures, as well. Interest rates for home loans are still low, encouraging buyers to borrow. Forecasts that rates may increase over the coming year may be spurring some buyers to act now, commented Winona National Bank Mortgage Banker Kim Trainor.
More flexible federal programs for refinancing mortgages have also allowed many people to avoid foreclosure, and local banks' credit counseling programs are helping homeowners whose homes were foreclosed on get a fresh start. "We've worked really, really hard to keep people in homes," said Merchants Bank Vice President for Mortgage Lending Arlene Schwertzler. She pointed out that not everyone has rebounded from the recession, and part of the drop in foreclosures is due to people who have already moved to a more affordable home.
A promising year ahead
Last year's positive numbers may be just the beginning of an upswing for local real estate. "There's very significant interest in real estate, both residential and land," Bambenek commented.
Trainor's office has pre-qualified many for home loans in 2014. "That's very encouraging," she said, adding that, typically, 85 percent of pre-qualifications end with actual purchases. Bambenek noted that local developers have taken out building permits to construct new "spec houses," few of which have been developed since the crash. That is an indication that "we've moved on and that there's going to be interest in those homes," he explained.
Another promising sign is that the sales of more expensive homes rose in 2013. Sales of high-end homes have been slow to recover from the recession. Now, however, "some of the upper-end things are starting to sell; that market is getting more active," Moore reported. Trainor agreed, saying that most of the people coming through her office for home loans are looking to "move up" to a bigger, more expensive house, with a good number of loans for houses over $200,000. Bambenek pointed out that the three highest sales in the county were homes in Homer, Dresbach, and Pleasant Valley that sold for between $400,000 and $463,000. "It may be the start of a new trend and increased interest in the rural areas," Bambenek said, pointing out that interest in rural homes may be tied to the relatively low gas prices in 2013.