The number of homes entering the market in Cottage Grove has been on a steady decline since 2005 and found some level ground in early 2011.
With fewer homes entering the market there will be less competition among homeowners in Cottage Grove resulting in a shortage of Homes for Sale and rising Home Prices.
Home Sales & Housing Inventory
The number of homes for sale in Cottage Grove (Housing Inventory) increased steadily till about mid 2008 and took a quick ride down since peaking. However, Inventory was manipulated by the Homebuyer Tax Credit for a period of time, but resumed it’s nature decent since then.
If Housing Inventory continues to fall this may result in fewer Home Sales, which isn’t necessarily a bad thing since fewer homes for sale will push Home Prices up.
Pending Home Sales and Closed Home Sales follow each other pretty closely in most cases. Closed Sales are usually a month or two behind Pending Home Sales. Home Sales have been rising steadily since mid 2011.
Homes for Sale
Days on the Market
The number of Days on the Market for Cottage Grove Homes reached a peak in 2011 at nearly 160 days and has since decreased to about 110 days. Days on the Market is influenced to some degree by Short Sales based on the time it takes a bank to approve a Short Sale. Other factors include the number of Home Buyers in relation to the number of Homes for Sale. With Housing Inventory declining Homebuyers are reacting more quickly.
Our next chart clues us in to what Market Conditions are in Cottage Grove and how it favors.
- Buyer’s Market = More than 7 Months of Inventory
- Balanced Market = 5 – 7 Months of Inventory
- Seller’s Market = Less than 5 Months of Inventory
The Absorption Rate is trending down at 3.9 Months of Inventory, which is considered a Seller’s Market.
Expectations indicate this trend line is going to continue to decline. It also appears this line may be leveling off to some degree.
Median List Price and Median Sale Price typically follow similar patterns, so there isn’t much that it can tell us other than how close to List Price homes are selling for.
So far the Median Sale Price in Cottage Grove has depreciated 12% since 2002, 29% since 2006 and has appreciated 3% since 2011.
With fewer Homes for Sale in Cottage Grove the Median Sale Price should continue to increase as Housing Inventory becomes a premium.
Eric Hempler is a Minnesota Realtor with the Agent Referral Network and works in conjunction with RE/MAX Advantage Plus on The Minnesota Real Estate Team, #1 Real Estate Team in Minnesota Since 2006. More than 1,100 homes sold in 2012.