The Housing Affordability Index in Dakota County (and the rest of the Twin Cities) is at an All-Time High this month.  At the end of December 2011, the index hit a mark of 264 which is 8.6% above this time a year ago.

What Is The Housing Affordability Index

The Index was developed in 1971 to measure whether the typical family can afford to qualify for a mortgage on a typical home.  It’s really a measure of 3 primary factors -

• Average Home Prices
• Median Incomes
• Interest Rates

This definition is available from the National Association of Realtors -

a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home.

In other words, the Index assumes a 20% downpayment which isn’t always typical these days but an FHA loan allows for a 3.5% downpayment and is very popular right now.

Impact On Dakota County Residents

Dakota County has continued to see home prices drop while interest rates have continued at near record low levels.  This combination has driven the Housing Affordability Index ever higher.

The index of 264 means that the typical family has 264% of the income they need in order to qualify for a loan to purchase the median priced home in Dakota County.  Basically, they would have no problem qualifying as they would have plenty of income to meet standard mortgage acceptance measures and could likely qualify for a house much more expensive than the median price.  The median priced home in the Twin Cities declined to $145,000 in December.

Median Mortgage Payment

Another way to look at the Housing Affordability for Dakota County residents is to look at how much of a households income would be eaten up by the median mortgage payment.  As you can see below (in this national number) the average household’s mortgage payment fell to around 15% of their income which means that people can spend a lot less of their income on housing and hopefully allow them to save more money.

This graph is from ADS Analytics

Buy vs. Rent

This all ties in quite a bit with feedback I’m getting from many potential first time homebuyers in the past couple months who are considering buying their first home.  They are seeing that it’s cheaper to buy vs. rent (as I wrote about last May), especially as rental rates go up in the face of low rental availability.

Housing Affordability Conclusion

With this combination of low prices, low interest rates and higher rents it may be the right time for Dakota County residents to explore their options.  Many people start by finding a Realtor and then getting qualified by a lender.   You can contact me and we can get started.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

Evermoor continues to be one of Rosemount’s premier development’s so it’s time to do a 2011 home sales update in the place I call home.  This former 500+ acre sheep farm is finally about to be completely filled with homes as Lennar is expected to finish the final open lots in the Glendalough neighborhood by the summer of 2012.  You can read my 2010 home sales recap here.

Evermoor Development

Using my “fancy map” above you can see that Evermoor stretches from Diamond Path along the Apple Valley border on the west side almost to Highway 3 on the east end.  The development is broken up into 13 sub developments which I outlined in my initial Evermoor blog story.

You can also find a drive through video I did showcasing the different neighborhoods on YouTube.

2011 Home Sales Recap

This year I decided to include both the 2010 and 2011 sales figures so it’s easier to spot trends.  I have columns for total sales, traditional sellers, new homes, bank owned and short sales.  Some of the major themes that emerge include -

• There were a total of 64 homes sold in Evermoor in 2011 which was an increase from the 58 sold in 2010.
• Lennar continues to sell new homes like crazy as they sold 28 new homes in the Glendalough development.  This number was better than the total number of previously owned homes in the entire Evermoor Development for 2011
• There was a marked increase in the number of bank owned properties, although the bulk of them are in the lower end townhouse sub-development at Roundstone
• When you take out the new homes and lender mediated homes there were actually fewer homes sold by traditional sellers in 2011 than in the previous year

Prices Continued Downward

Overall, the Minneapolis Association of Realtors says that the Average Sales Price of homes sold in Rosemount have declined by 9.7% in the past 12 months.   We can see that show up by looking at homes in the Cross Croft neighborhood.  These are detached townhomes that are very similar to each other in style and size so it makes it easy to watch pricing trends.

Example 1:

13621 Crosscroft and 13570 Crossmoor are almost identical homes.  The home on Crosscroft sold on 11/29/2010 for $260,000.  The home on Crossmoor sold on 12/14/2011 for $229,000 which is actually almost a 12% decline.

Example 2:

3694 Crosscliffe & 13603 Crossglen are larger homes but very similar 2 level models with 3 bedrooms & 3 baths.  The home on Crosscliffe sold on 2/19/2010 for $335,000 while the Crossglen home sold about 18 months later on 9/21/2011 for $295,000.  That’s another 12% decline.

Active Listings

There are currently only 13 active listings available in the Evermoor development of Rosemount.  5 of those listings are new homes by Lennar and 4 of them are condo’s in the Bard’s Crossing sub-development.  You can see them by using my Home Finder tool.

The number of listings in the Twin Cities is down all over and while it is expected this will increase rapidly once we approach spring the lack of listings is actually stabilizing prices right now.

Summary of Evermoor Development

Rosemount’s Evermoor Development continues to be one of the premier places to live in the south metro.  One has to only look at how many new houses are still selling here to see it’s a place that people want to call home.

If you are looking to buy or sell in Evermoor choose a Realtor who lives here and knows it extremely well. Just contact me and we can get started.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

10% returns on Dakota County investment properties are readily available to people that are looking for a proactive way to invest extra cash outside of the volatile stock markets.  While the real estate market has certainly been volatile, collecting regular rent checks no matter what happens to the underlying value of the property makes for a much more stabile investment vehicle.

Apple Valley Townhouse

Right now the following townhouse can be had that should return 10% without even considering depreciation write offs or the possibility of appreciation.  The property in question might be hard to finance right now but if it could be financed the leveraged investment would return closer to 18%.

Here’s what the investment spreadsheet I use looks like for this property in a prime location that’s less than 12 years old -

This property should easily rent for $1,000/month if not more but even if it only rents for $950/month it would bring in over 9%.  While I’m factoring in the investor self managing them it could also be managed by a property manager.  I also build in conservative estimates for 5% vacancy, a $200/year legal budget and a full month’s rent for repairs.

10% Returns on Investment Property

The point is that many investors feel we have maybe 1-2 more years of opportunity to capitalize on bank owned and short sales property prices to scoop up real estate at about half of what it sold for 5 years ago and realize these 10%+ returns on Dakota County investment properties.

In addition, vacancy rates are declining and rental rates are increasing in response to more people moving out of homes and in need of rental housing.

If you are looking to diversify into real estate it’s a good idea to find a Realtor with experience in buying investment properties as well as the processes to find and manage tenants.  With 5 rental properties of my own in Dakota County I’m in a unique position to help investors.  To get started contact me.

If you’re looking for more real estate investment property advice I highly recommend the articles and message boards at www.biggerpockets.com

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

We are entering 2012 but I thought it would be good to do a home sales recap to show how I did in 2011 in helping clients in Dakota County to buy & sell homes.  I did a similar home sales recap for 2010 sales so I thought this would be a good annual update.

Overall Recap

If you’ve read my profile you’ll know that 2011 was only my 2nd full year as a Realtor.  That said, it was another successful year as I once again qualified for RE/MAX’s Executive Club which is their designation for the top 25% of their Realtors nationwide.  This is something that most new Realtors never accomplish so I’m proud to have hit that mark again.  Overall, I had 18 transactions for the year with all but 2 of them happening in Dakota County.

You can read from a number of my 2011 clients in the testimonial & customer reviews area of my website.

2011 Home Sales Recap – Sellers

For the year I helped 9 clients get their home sold in Dakota County during 2011.  These homes were located in the following cities -

• Apple Valley – 3
• Farmington – 3
• Mendota Heights – 1
• South St. Paul – 1
• Burnsville – 1

One of the things I’ve focused a lot of effort on is helping people sell their home after they failed selling with a previous Realtor.  These expired listings have become a good source of business as 8 of the 9 seller’s homes you see below had failed in a previous attempt to sell.  I’ve done write ups on some of these transactions and plan to write more in the coming weeks.

2011 Home Sales Recap – Buyers

In 2011 I also had the privilege of helping in 9 buy side transactions.  These included:

• 3 first time buyers (Bloomington, Lakeville & Farmington)
• 2 previous buyers who were moving to new homes (Apple Valley & Inver Grove Heights)
• 4 investor buyers (Apple Valley, Rosemount & Minneapolis)

2011 Dakota County Recap Final Comments

2011 continued to be a difficult year for Dakota County home sellers but there are some good signs for 2012.  Currently, the biggest helping trends are the huge reduction in the number of listings on the market.  Currently there are 22% fewer listings on the market in the Twin Cities than we had at this time last year.  That’s helping stabilize prices as home sellers have fewer competitors to have to discount against.  Continued low interest rates are also a big incentive for buyers.  If we can just reduce the number of lender mediated homes we might actually see prices rise.

To help you achieve your house buying or selling needs in 2012 the first step to success is to contact me.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

Providing updated real estate market statistics for Dakota County has always been a focus for my website.  My most recent blog article went into some detail showing what is happening with home sales in Dakota County for the months of September and October.  You can find links to other recent market statistics from the category links to the right on the main page.

Real Time Market Statistics

I’ve long relied on the excellent market statistics that are provided by the Minneapolis Association of Realtors.  They put out weekly, monthly and annual reports that help both Realtors and consumers to have a better feel for what’s happening on today’s Twin Cities real estate market.

To make this data more readily available I now have a link at the top of my website that will pull this data and make it available without having to go find it somewhere else.  The reports available include (click on the picture to try them out) -

This Report gives the most current stats on weekly Twin Cities sales

Market Updates for 200 different communities on a monthly basis

Monthly Indicators gives details for the entire market on many key stats

Monthly data on the availability of homes by inventory measures

Gives an annual review of the prior years sales in the Twin Cities

This report gives data on distressed property sales on a monthly basis

Conclusion

Providing updated real estate market statistics for Dakota County will continue to be a focus and by adding this data right within my website should be a nice added value to have all of it in one location.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

Halloween is over so it gives me a chance to take a look at the latest home sales statistics for September and October 2011 in Dakota County.  Now certainly the Minneapolis Association of Realtors does some detailed reports for every city but I wanted to dive in to a few statistics that goes behind their numbers and into a little more depth that will especially help traditional sellers.

Statistics Methodology

To do my analysis I pulled data for all sold transactions in September & October from the Northstar MLS for all listings in Dakota County.

There were 848 transactions in Dakota County during the period in the primary cities within the County.  The columns I used are Average Sold Price, Average Total Finished Square Feet, Count is the number of transactions in each city,  Average Days on Market and the Average Price Per Square Foot.

The report doesn’t start really getting instructive until we dive into it using an Excel Pivot Table function to pull out data.  What I really want to do is separate out distressed properties (bank owned & short sales) and single family from townhouses.

Traditional Seller, Single Family, Previously Owned

When I pull out data for just traditional sellers of previously owned, single family houses in Dakota County (my primary seller) we see the following -

Now we can see data that helps us to make some analysis:

• The average Price Per Square Foot for single family, traditional sellers is almost exactly $100/foot but that varies quite a bit by city.  Mendota Heights continues to have the strongest home sales although they do take the longest to sell there.
• Surprisingly to me, Farmington actually is tracking near the Dakota County average while Rosemount is trailing behind.
• Hastings shows some weakness with longer market times and sales averages that are 2nd from the bottom

These numbers can help sellers to get some overall feel for what to expect from a pricing and time on market standpoint.

Comparing Traditional Sellers to Bank Owned and Short Sales

The following chart compares the number of sales transactions in Dakota County by house type and the type of sale.  PPSF is the price per square foot for finished space in each type of home and a way to measure home prices no matter the size of the house.

• Overall 42.3% of all home sales transactions for Dakota County in the last 2 months have been distressed properties.  This is the primary reason that home sales prices are stagnant despite in higher sales than last year and fewer listings than last year.
• There is a big spread in prices paid for single family homes depending on whether it’s a traditional seller, bank owned or short sale.  Interestingly, for townhouses the difference in price between bank owned and short sale is much smaller.

Other Dakota County Statistics

Some other data that might be of interest:

• There were 31 new construction homes sold or 3.7% of all homes sold
• The average Days on Market for a short sale was 158 days compared to 68 days for non short sales.  Therefore, it looks like it is taking almost exactly 3 months on average to get bank approval.

Wrapping It Up

Knowing the Fall 2011 home sales statistics for Dakota County can make you a more informed buyer or seller.  While every home is different and needs to be evaluated on specific characteristics these overall numbers can give you some better perspective on what’s happening in the current challenging market we face.  If you’d like more information about the Dakota County real estate market contact me.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul. He is licensed to practice real estate in both Minnesota and Wisconsin.

Yesterday, the Minneapolis Association of Realtors released their Twin Cities Weekly Real Estate Report for the week of June 6, 2011.  In it they reported that pending sales for the week ending May 28th were the highest that they have been since April, 2010.  There has been a nice steady increase in sales this year driven by continued low interest rates and housing prices that haven’t been seen in 10 years.

Here’s the graph of sales for the last 3 months compared to last  year -

The report recap declared -

Buyer activity in the Twin Cities metro area increased a colossal 59.2 percent over last year, the strongest year-over-year gain since the week ending October 3, 2009. That’s a win any way you look at it, especially after 52 of the past 53 weeks showed year-over-year declines in buyer activity.

The post-tax credit drop-off seen at this time last year is driving this shift while current purchase levels have been on a modest but steady seasonal uptick. So far, sales levels are on track with 2007 and 2008 trends.

The change at this time last year is also showing up on the seller’s side, where 1,523 new homes were introduced, or 3.3 percent more than the same week in 2010.

Overall, we’ve seen four consecutive weeks of gains in seller activity and three consecutive weeks of gains in buyer activity.

This is good news for the health of the Twin Cities real estate market but it is definitely still a buyer’s market because of the quantity of lender mediated homes out there.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul.

In the past I’ve done significant research to evaluate 2 different methods of finding a home price in Dakota County using easily available metrics.  For a long time I’ve been doing analysis to compare the final sale price of homes against the Dakota County tax assessed value.   For more recently sold homes, another good rule of thumb has been to look at when a home was last sold and make a determination of value based on the average decline in the market since the home was last sold.

What Homes Am I Looking At?

Today I pulled home sales data out of MLS that matched the following -

• Previously owned, Single Family Homes sold in Dakota County in the past 30 days.   I can’t use new homes as they don’t have an established tax value
• Only traditional sellers (exclude all bank owned and short sales)
• Weed out a few homes that clearly have incorrect tax values.  Unfortunately, there are still many homes in Dakota County that have an artificially low tax value because the tax assessor doesn’t know about a finished basement

Using this data I was able to find 99 homes that match which gives a pretty good number of homes to look at.

Tax Assessed Value Home Price Method

To do this analysis I take the Dakota County 2009 tax assessed value (payable in 2010) and compare it against the net sales price.  The net sales price is the final sale price minus any seller paid closing costs.  This is a true picture of what the seller received at closing for their home and is a difficult number for non-Realtors to get since seller paid closing costs are reported on consumer facing websites.

I use the 2009 tax assessed value because that’s still the one being used in MLS.  I look forward to seeing the change once the updates for 2010 are entered into MLS.

The last time I did this analysis was in February 2011.  At that time the average single family home in Dakota County was selling for 89.2% of 2009 tax value.  This was a decline from September, 2010 when the average had been 92.8%.

For the last 30 days, which spanned April 24, 2011 through May 24, 2011 that has actually declined even further. Currently the average home is selling at 87.1% of 2009 Dakota County tax assessed value.

That seems to coincide with recent news in the Twin Cities marketplace.  Home prices continue to be under pressure according to reports in the Star Tribune, Pioneer Press, Minneapolis St. Paul Business Journal and Fox 9 News.

Home Price Based On Previous Sale Date

Another way to roughly evaluate a home’s price is to look at when it sold last and then apply a discount to the price based on what’s happened to the average home prices in the past few years.  This process works best for homes sold since 2000 as these homes have more recent comparisons.

It would be better to have a broader set of data than I have using these 99 sales but here are the averages -

As you can see, homes sold between 2005-2007 in Dakota County have seen a 22-28% price decline.  Homes sold in 2003 are down about 10% and it’s not until you get all the way back to 2001 where you see homes selling for about what they are selling for now.

Using these numbers you can then get a rough idea of what a home’s value is if you know it was sold in the last 10 years.  Of course, this doesn’t take into account for major changes to a home so if there have been large additions or upgrades to a house you would need to take that into account.

Using the 2 Dakota County Home Price Metrics

These 2 home price metrics allow both buyers and sellers in Dakota County to get a rough estimate of what a home is worth.  Of course, there are variances and exceptions which is why these are just a quick way to see if a home price is in the ballpark.  The best way to find a home’s value is to do a thorough comparison against similar and recently sold homes.  This is something I do for both buyers and sellers.

If you have any questions about home prices in Dakota County feel free to contact me for a no obligation discussion.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul.

Yesterday the Minneapolis Association of Realtors published their Twin Cities Weekly Activity Report for the week ending May 23, 2011.  This was the first report for 2011 that really is able to separate out the accelerated spring sales of 2010 that coincided with the Homebuyer Tax Credit which expired on April 30, 2010.

The bulk of the report highlights a rather large increase in sales activity for 2011 as compared with 2010 -

For only the second time since the end of last year’s tax credit, there were more Pending Sales for a given week than in the prior year. A total of 958 buyers entered into contract for the week ending May 14, an increase of 15.4 percent and the highest number of pendings since the week ending May 8, 2010.

But let’s not get too excited just yet, because this apparent shift in Twin Cities home purchase activity was primarily driven by the post-tax-credit slowdown seen at this time last year. To illustrate this point, 2011 sales activity has increased 4.1 percent since the final week of April, while 2010 saw a 43.5 percent decrease during the same period.

On the supply side, New Listings have come back in line with historical norms for this time of year. Sellers brought 1,704 new homes online, or 7.7 percent more than the same time in 2010. Again, 2011 activity has been fairly stable over the past month while 2010 activity declined by nearly 33 percent.

The 23,739 Active Listings for Sale have grown slightly over the course of the year, but remain 10.1 percent under 2010 inventory levels or about 2,700 units slimmer. All those crunches are really starting to pay off as we enter bikini season.

Summing Up The Twin Cities Weekly Real Estate Report

The good news is that sales levels continue to be close to a more traditional year like we had in 2008 & 2009 and that comparing anything to 2010 will be difficult.  Sales activity has continued on an upward path so far in 2011 as we get into the spring and move toward summer.

Therefore, there can be some optimism because the economy seems to have stabilized and interest rates remains very low.  We must temper that optimism with the fact that 40-50% of the sales that are happening are lender mediated which is continuing to hold prices down.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Farmington, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul and West St. Paul.

It’s been a few weeks since I did an analysis of Dakota County home sales so I thought it might be good to take a look at how things ended up in April 2011.  I wanted to take a look and see if we are seeing any change in the impact of distressed properties (bank owned homes and short sales). 

Twin Cities – April 2011 Home Sales

Just yesterday, the Star Tribune posted a bleak story which said that the Twin Cities home sales continue to decline and that 50% of the real estate transactions were distressed properties. 

•Across the country home prices fell 5 percent during April. In the Twin Cities prices fell 6.8 percent.

•Nationwide home prices fell 11.5 percent over the previous nine-month period, a rate of decline not experienced since 2008.

•Nationwide, the bank-owned sales as a percent of all sales hit 35 percent, but in the Twin Cities half of all sales were foreclosures or short sales, putting the region on par with the two worst cities: Detroit (56 percent) and Fresno (55 percent).

Dakota County – April 2011 Home Sales

The first thing I wanted to do is look and see if Dakota County had the same amount of distressed sales as this report said is happening in the entire Twin Cities.  Therefore, I pulled a report from MLS showing all 397 sold transactions in Dakota County for April 2011 (which you can see above) and sure enough – almost 51% of all sold properties were either bank owned or short sales.

As you can see, the impact is most felt by townhouses and twinhomes, where approximately 2 out of every 3 sales is a distressed property.  The situation doesn’t look quite as bad for single family homes but if you take out the 17 new construction homes sold in April it does start to approach 50% of previously owned single family homes that are distressed sales as well.

Dakota County Distressed Sales By City

The next thing I wanted to look at was to analyze the previously owned, single family homes by city in Dakota County and see if some areas were doing better or worse than others.

As you can see, there are some wide variations in the percentages of distressed properties within different cities.  Eagan, Mendota Heights, Burnsville and surprisingly, West St. Paul were the best.  Farmington, Lakeville, Apple Valley and South St. Paul were well above the average.  It’s really tough to be trying to sell your single family home in a place like Farmington where more than 3 out of every 4 home that is selling is a distressed property.

Dakota County Sales Metrics By City – Traditional Sales

The final thing I wanted to look at was different sales statistics by city.  For this analysis I looked only at previously owned, single family homes that were from traditional sellers (taking out bank owned and short sales).  The idea here is to see how traditional sellers are doing by city since that’s the typical profile of client I am engaged with.

The 3 things I looked at were the average Days on Market, the Average Discount from List Price and the Average Price Per Square Foot of finished space.

• It was somewhat interesting that so many cities had a very similar Days On Market grouped around the 60 day mark.  There were some exceptions like Farmington which was almost double the average and Mendota Heights & West St. Paul which handily beat the average.  Mendota Heights has been the city in Dakota County least affected by the real estate downturn since they’ve had the fewest distressed properties while the opposite can be said of Farmington.
• The Average Discount measures the difference between the final net sales price and the list price at the time of receiving an offer.  Most cities are pretty well grouped close to the average.  Right now the average buyer is getting a little over a 5% discount from the list price during their negotiations.  This is based on the “net price” which includes any seller concessions toward a buyer’s closing costs.
• The Average Price Per Square Foot  is calculated by taking the net price and dividing by the finished square feet.  Here you can see some pretty big variations.  Mendota Heights once again does well (although it’s based on only 4 sales) along with Lakeville and Eagan. 

What It Means

In April 2011, Dakota County home sales continued to be severely impacted by the volume of distressed properties.  Buyers continue to view distressed properties as a bargain while more and more investors are back in the market trying to scoop up below market deals.  Traditional sellers continue to have to be ahead of the curve on their pricing in order to be successful in finding a buyer.

If you are considering whether now is the time to buy or sell a home in Dakota County or the southern Twin Cities, contact me at any time and you’ll be assured to be working with a full-time Realtor who understands exactly what’s going on in the market in order to best represent your interests.

Bill Wallace is a Realtor at RE/MAX Results in Apple Valley, MN with a focus on Dakota County and the Southern Twin Cities including – Apple Valley, Bloomington, Burnsville, Eagan, Eden Prairie, Farmington, Hastings, Inver Grove Heights, Lakeville, Mendota Heights, Prior Lake, Richfield, Rosemount, Savage, Shakopee, South St. Paul, West St. Paul and Woodbury.