Twin Cities Home Prices Show Signs of Strength
March 10, 2010
The Minneapolis Area Association of Realtors sent out a News Release today to announce that for the 2nd straight month the median home price in the Twin Cities has increased. This is the first back to back monthly increase since 2006. Home Prices Show Signs of Stability
Here were the highlights from the report -
- For the second consecutive month, home prices in the Twin Cities 13-county metropolitan area showed a year-over-year increase. We haven’t seen back-to-back year-over-year increases since 2006.
- The February median sales price of $159,000 was a 6.0 percent increase from last February’s mark of $150,000. That’s the strongest year-over-year increase since 2005.
- There are fewer foreclosure homes selling now than there were last February.
- The market share of traditional, non-foreclosure homes has grown in the last year, tilting prices upward and stabilizing the market.
- The median sales price of traditional homes (excluding foreclosures and short sales) in February was $204,900, down only $100 from last February’s mark of $205,000.
- Foreclosures posted a 0.8 percent increase to $120,000, while short sale properties posted a 6.7 percent decline to $145,000.
- There were 3,527 signed purchase agreements in February, an increase of 6.4 percent from a year ago.
- We expect home sales to tick up as buyers move to take advantage of the tax incentives before the April 30 deadline.
- Affordability is outstanding. The current Housing Affordability Index of 213 is the fourth-highest mark ever recorded.
- Buyer activity has brought inventory down, so there are far fewer homes for buyers to choose from. The March Supply-Demand Ratio of 5.39 means that there are 5.39 homes available per buyer in the month. In March 2008 the mark was 8.16.
Conclusion
The Homebuyer tax credit of $8,000 for first time homebuyers and $6,500 for move up buyers along with interest rates that remain near 5% is creating a large impetus for home sales. As we saw with the “Cash for Clunkers” program and the recent Minnesota Appliance Rebates, free government money does have a positive effect on consumer behavior. Sellers have a 45 day window to get their homes sold. After May 1st expect sales to drop off substantially.
2009 Dakota County Housing Market Analysis
February 15, 2010
The Minneapolis Area Association of Realtors has released their 2009 Housing Market Analysis entitled the 2009 Residential Real Estate Activity Report. This report shows real estate market data for the entire 13 county Twin Cities market but also breaks out data for each individual city which allows us to view what’s going on in each market area of Dakota County.
Overall Statistics
Before looking specifically at Dakota County there were some overall statistics for the entire metro area that really stand out that impacted the Twin Cities residential real estate market in 2009 -
This first chart shows the Price Per Square Foot of finished space over the past 6 years. This is considered a better indicator of market value of an individual home than Median Value. As you can see, the Average Price Per Square Foot peaked in 2005-2006 and has declined almost 30% since that peak. Ouch…
These statistics do vary a lot by city. For example, places like Rosemount ($115/sqft) & Eagan ($113/sqft) are faring better than Farmington & South St. Paul (each $101/sqft). I’d be happy to get you the data for your city but this is a very good, quick way to estimate market value of your home.
Everyone knows that there are lots of Lender Mediated sales (bank-owned and short sale properties) in the market but the fact that 43% of all sales in 2009 were Lender-Mediated should surprise people. Most projections show that there are record numbers of people in default right now, fueled by the bad economy, and Lender Mediated homes on the market may actually increase through 2011
The good news right now is that the market supply of Lender Mediated homes is down and when combined with the Homeowner Tax Credit and 5% interest rates we may see a decent window for Traditional Homeowners to sell before the Credit ends in April.
Dakota County Data
The following 2 tables are a little hard to read but you should be able to click on them to get a larger version.
This first chart shows each city within Dakota County and breaks out Total Sales, how many of them were Lender Mediated, New Construction and Single Family vs. Townhouse/Condo. The big thing to look at is the Percent of Lender Mediated homes. A higher number here directly impacts Price Per Square Foot and other metrics.
The 2nd chart shows a breakdown of Average Price, Days on Market, % of List Price Received and most importantly, Price Per Square Foot. As you can see, Mendota Heights was the clear winner in 2009 as only 19% of the homes sold were Lender Mediated leading to a Price Per Square Foot that was much higher than the others. Rosemount and Lakeville rounded out the Top 3.
Conclusion
The real estate market in Dakota County is down around 30% from its peak in 2006 and a lot of the slide can be attributed to the huge increase in Lender Mediated properties. On average, your home is probably worth less than you paid for it unless you bought it before 2002-03. Understanding what’s happening by using Market Analysis Data is a primary service your Realtor can help you with to help you make decisions.
For information on any of the data used and/or individual questions about the Dakota County real estate market please contact me anytime – Contact Bill
Dakota County Home Sales Analysis in January 2010
February 6, 2010
For the past couple months I’ve been doing analysis within Dakota County to compare the final selling price of homes sold to their tax assessed value to see if there were some common numbers that could be found to help buyers and sellers to get some rough estimates of home value. In November I looked at single-family homes that were not bank-owned or short sales and found that those homes were selling for about 90% of their Dakota County 2009 tax value.
In December, 2009 I expanded my analysis to include -
- Single Family Homes, Not lender mediated – Selling at 86.6% of Tax Value
- Single Family homes sold via Short Sale – Selling at 73.4% of Tax Value
- Single Family Bank Owned homes – Selling at 59.7% of Tax Value
- Townhouses, Not lender-mediated – Selling at 82.1% of Tax Value
So to continue the trend, I ran 3 of these statistics again to see if things were different for January 2010 sales in Dakota County and found -
- Single Family Homes, Not Lender Mediated – Sold for 88.7% of Tax Value
- Single Family, Bank-Owned Homes – Sold for 62.5% of Tax Value
- Townhouses, Not Lender Mediated – Sold for 84.1% of Tax Value (If I take out 3 oddballs that messed up the averages)
(I’d be happy to make the detail available to anyone upon request showing addresses and prices – send me an e-mail at bill.wallace@results.net )
So what does this mean?
I think that with the continued decline in the number of homes available on the market (down to about 21,000 in the Twin Cities) we saw a small upward tick in home sales prices in Dakota County. With the ongoing Homeowners Tax Credit through April and low interest rates of around 5% we might see this continue to inch upward. All bets are off though after April 30th.
High End Home Sales Trends in Dakota County Since 2005
January 9, 2010
As we all know, the real estate market has been in a free fall for the past 3 years but that is especially evident for homes in the $500,000+ price range in Dakota County. Now that 2009 is behind us it allows us to get a much clearer picture of what that looked like from a statistical standpoint.
High End Home Sales In Dakota County By Year
As you can see from the graph below, high end single-family home sales have dropped off of a cliff since 2006.
Sales were down year over year by 4.5% in 2006, 20.1% in 2007, 38.1% in 2008 and 45.9% in 2009. Overall, sales of $500k+ homes in Dakota County in 2009 were almost 75% less than they were in 2005.
For the year, high end home sales were down 45.9% in Dakota County which was a much bigger percentage than the Twin Cities as a whole experienced. According to the Minneapolis Area Association of Realtors, there were 2,319 sales in 2008 and 1,758 in 2009 for a drop of 24.2%. As you can see, Dakota County made up only 4% of overall sales in this category. MAAR Housing Supply Outlook
Dakota County Townhouse Sales Statistics – December 2009
January 8, 2010
Townhouses continue to make up a good portion of the home inventory and sales in Dakota County so today I’m analyzing the sales of these properties in December as compared to their tax assessed value. Single Family homes have been moving relatively quickly during the past 6 months and my most recent blog entries have shown that, on average, non-bank owned homes sold for 86.6% of tax assessed value in December Dakota County Single Family Home Analysis – December 2009. I thought it would be valuable to see how well townhouses are doing with that same comparison.
Parameters For Analysis
For the month of December I found 27 closed deals that I could use to assess.
- I only used townhomes from traditional sellers. Therefore, I removed all bank-owned & short sales that might skew the data even lower.
- I removed any new townhome sales as they don’t have an accurate 2009 tax assessed value (there was just 1 that I removed from December’s total that was new)
- I am using an Adjusted Sales Price which is the sales price less any seller concessions so it more accurately reflects the price received by the seller
Dakota County Bank Owned Home Sales Analysis – December 2009
January 5, 2010
Today I continue my series of reports by analyzing single-family, bank-owned homes sold in Dakota County during the month of December 2009. This is the 3rd part of my series which looked at traditionally sold homes (Dakota County Traditional Home Sales Analysis) and homes sold as part of a short sale (Dakota County Short Sale Analysis). I am comparing the final adjusted sales price (sold price less seller concessions) against the 2009 tax assessed value.
Bank-Owned Analysis
For the month of December there were 28 bank owned homes identified in MLS as having closed in Dakota County. Typically, these properties sell for the least amount as banks are anxious to get rid of these homes and they are in the worst saleable condition. On average, these bank owned properties sold for 59.7% of their tax assessed value.
One thing continues to be evident – the market in South St. Paul continues to be very weak as there were an abundance of bank owned properties in that city and they almost all sold below the average.
Therefore, the final breakdown for single family homes sold in December is as follows:
| Type of Home | Avg % Of Tax Value |
| Traditional | 86.6% |
| Short Sale | 73.4% |
| Bank Owned | 59.7% |
Conclusion
Having a Realtor that helps set correct pricing expectations is critically important for both buyers and sellers of homes. The big variables that I help provide as a full-time, full-service Realtor is to help sellers get their home to its peak selling condition and to put in place the most comprehensive marketing plan in the industry.
To get your own Market Analysis using some of the most in-depth research along with our custom Market Analysis tools contact me for a no obligation meeting – Contact Form
Dakota County Single Family Home Sales Analysis – December 2009
January 3, 2010
Last month I started analysis showing the relationship between a homes sales price and the tax assessed value for single family homes sold in Dakota County Minnesota (November 2009 Sales Analysis). It showed that of the 32 homes sold in November, the average home sold for 90.1% of it’s 2009 tax assessed value.
This was interesting data and it really helps give a rough estimate for homeowners on setting expectations for their final sales price in this tough real estate market. I thought it would be valuable to do this on a regular basis to analyze how things might be changing and maybe look at some additional dimensions, like how the numbers might be different for each city in Dakota County.
Parameters For Analysis
For the month of December we have a larger sample to compare as there were 75 closed single family homes in Dakota County to compare. The homes included are -
- I only used single-family homes. I plan on expanding my analysis to townhouses later this month.
- I only used homes from traditional sellers. Therefore, I removed all bank-owned & short sales that might skew the data even lower.
- I removed any new home sales as they don’t have an accurate 2009 tax assessed value (there were 7 homes that I removed from December’s totals as they were new)
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