Real estate sales show market picking up in Bemidji
BEMIDJI - Twice as many Bemidji area homes have sold this year than at this time last year.
"It has been an excellent first quarter," said Ross Pederson, the owner of ERA Pederson & Associates Realty.
Matt Sparby, the owner of Realty Experts, said the number of closings through March from the Bemidji multiple listing service, known as the MLS, is nearly double that reported in the same timeframe in 2011.
"You never know (what to expect) in real estate. It definitely wasn't expected, but it's awesome that it happened," Sparby said.
The impressive spring reflected the national trends through February, which numbers reported by the National Association of Realtors reported showed U.S. home sales up 8.8 percent. However, the Commerce Department said national sales dropped 7.1 percent in March.
"Spring is a very active time and we're certainly seeing that activity this year," said Mark Dickinson, owner/broker of Century 21 Dickinson.
Realtors throughout Bemidji said the spring season has been strong throughout the market, from starter homes to move-up housing to vacant lots for new construction.
"We always have a strong first-time homebuyer market in Bemidji," Dickinson said. "That's a key element to having the whole market being vibrant."
Those first-time buyers typically purchase in the $110,000 to $150,000 range, stay a few years and then think about upgrading to a larger home.
"The chain starts with that first-time sale," he said.
Doug Fuller, owner/broker of First Reality, credits several factors with contributing to the fast start this year, including an early spring and light winter.
"I think people's cabin fever set in a little earlier than normal," he said, suggesting, too, that people on the fence about whether to upgrade to larger homes have now decided the time is right.
An $8,000 first-time homebuyer tax credit that was in place in 2008 and 2009 pulled out of the woodwork many people and families who took the opportunity to buy. Fuller speculated the Bemidji area may now be seeing a new crop of first-time homebuyers.
Realtors throughout the area also noted the historically low interest rates. The Washington Post reported in January that a 30-year fixed rate fell to an all-time low of 3.88 percent. Rates for a 30-year fixed mortgage now are now at 3.9 percent while 15-year fixed rates are at 3.13 percent, according to the Housing Trends Newsletter, which tracks real estate trends.
"It's an absolute fabulous time to buy a house," Fuller said.
Pederson, owner of ERA Pederson, said his agency in particular has been selling more upper-end homes than usual.
"This year has been a huge improvement over last year to date," he said. "We're optimistic that will continue."
Sparby, of Realty Experts, said his agency has seen a mixture of buyers from first-time buyers to those upgrading to larger homes.
Lot sales present potentially good deals too, he noted.
Howie Zetah, the owner of Zetah Construction, said his crews have been busier with home construction this year than in recent years past.
"We still have a long ways to go to come back, but things look positive," he said.
Work to date has been a combination of new home construction and remodeling projects, such as kitchen and master bathroom remodels, new windows and roofing projects, Zetah said.
Mike Miller, building official with the city of Bemidji, said he has seen a large increase in the number of residents seeking permits for home improvements.
To date, the city has approved permits for 31 residential remodels or additions and two permits for residential accessory structures.
"We have way more interest in (remodels) than last year," Miller said. "All the contractors I've talked to said there is at least stuff to bid on this year."
Miller said most of the new home construction, though, is being done outside of the city limits. Zetah agreed, but said he has had new home projects throughout the area, including north, south and east of the city limits.
"There's more new construction now than we've seen in three to five years," Zetah said. "I hope it's a nice, even trend and it continues over the next few years."
Real estate cycles up and down every seven to eight years, Fuller said, with usually have a very strong seven or eight years and then a down period for the next seven to eight years.
Noting that the real estate market crashed in 2006, he figures we're in about year six, going on year seven, of a low period so things are changing as expected.
"That's, historically, the way it has been for 80 years," Fuller said of the cycle. "It's very possible that we're starting to see the end of the down cycle. The market is definitely kicking into high gear."
Most of the agents agreed the low inventory of houses for sale should translate to higher home prices. Pederson, with ERA, though, said the one thing still plaguing the area is the number of foreclosures on the market.
As of April 26, the Beltrami County Sheriff's Office had held 24 foreclosure sales and had another 21 scheduled between then and the end of July, according to the Sheriff's Office. In 2011, there were 66 foreclosure sales.
Since they're usually sold at quite a discount, they offer a lot of opportunity for the buying public.
"Until we burn through all of those, I don't anticipate market values rising," Pederson said. "Once that stops, I expect the market to rebound quite quickly."