Agenda - Planning Commission - 09/01/2016

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FOR-SALE HOUSING MARKET CONDITIONS Introduction This section of the report examines the for-sale housing market conditions in the Ramsey Market Area. Information analyzed in this section includes housing value trends for existing homes, ex- isting homes currently listed for sale, and an inventory of the active subdivisions with homes af- fordable to moderate-income buyers. Housing Values Tables I 1 through 14 show single-family and multifamily home resales in the Ramsey Market Area between 2001 and 2005. The tables show the annual number of sales, median resale prices, average days on market, and the distribution of resales in five price ranges. The following are key points from Tables 11 through 14. Single-Family Homes Sales • The median resale price of single-family homes in 2005 (through December 14)was about $240,000 in the PMA and $228,000 in the SMA. The SMA has a lower median sale price largely because it has an older housing stock. Homes sold in 2005 had a median year built of 1990 in the PMA and 1984 in the SMA. • Median home prices in the Market Area have appreciated by an average of 8.2% over the past four years. There was a slight slowdown in 2005, when homes appreciated by an aver- age of 5.9%. This slowdown is consistent with Metro Area trends. • Seniors seeking age-restricted housing will often use the proceeds of their home sales to- wards costs associated with those facilities. Since senior homeowners usually own their homes outright, they have access to a sizeable financial resource in the form of equity they can realize from the sale of their homes. A senior living in the PMA who owns their home outright and has a home valued at$192,000 would likely be able to derive approximately $178,500 after factoring in marketing/real estate commissions and moving costs (estimated at 7%). Should this equity be invested in an interest-bearing account with a 4%return, it would produce an income of$7,100 annually (or$600 per month). • The median household income in the Market Area was $62,800 in 2001 and the median sin- gle-family home price was $169,500, or 2.7 times median income. By 2005, the median household income increased by 10.5%to $69,400 while the median single-family home price increased by 37%to $232,300, or 3.3 times median income. The fast rising home prices compared to overall rising incomes indicates that a decreasing percentage of families may be able to afford single-family homes in the Market Area over the coming years. MAXFIELD RESEARCH INC. 23