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.
Number of Realtors in Twin Cities Continues to Decline
February 5, 2010
An article in the St. Paul Pioneer Press caught my eye this week as it discussed the continued decline of the number of Realtors in the Twin Cities are – Exodus of Twin Cities Realtors Slows A Bit The number of real estate agents not renewing their license has slowed but the days of easy real estate sales and a Realtor on every corner seem to be behind us.
“The movement in the real estate agent population is again mirroring the real estate market,” said Leonard MacKinnon, a spokesman for real estate firm Coldwell Banker Burnet. “In 2009, we began to see some stabilization in the market.”
It was somewhat interesting that the Minneapolis Area Association of Realtors (of which I am a member) had steady membership while the St. Paul Association of Realtors declined 8% and ended up merging late in 2009 with the Southern Twin Cities Association of Realtors to boost membership.
Statewide, membership in the group’s 18 chapters has dropped by nearly 7,000 — or 25 percent — from its 2006 peak of 26,991. “If you were in the business before the bubble and before the easy financing, you learned how to do the prospecting and you built a client base,” Galler said. “Once the bubble burst, those folks that didn’t learn the prospecting side of the business had a very difficult time continuing.”
As you see, we are down 25% from the peak 3+ years ago which might actually be slightly less of a drop than the overall real estate pricing decline. The reason for such a drop is clearly related to the income opportunity. It’s interesting to hear how many people think Realtors are overpaid (based on the cost of selling a home) but according to the National Association of Realtors Member Profile -
- Median gross income of Realtors fell 14% to $36,700 in 2008.
- 72% of Realtors receive no benefits through their firm.
- These were the statistics for 2008 – it’s highly likely the declined further in 2009. Based on those numbers it’s plan to see that there were probably way too many Realtors in the business, especially part-timers. Therefore, the decline can only serve to help those Realtors that remain to be more successful which benefits their clients by having a resource that’s fully dedicated to the profession.
Dakota County Short Sale Analysis – December 2009
January 4, 2010
Yesterday, I posted an analysis showing the relationship of successful single family home sales in Dakota County as compared to their tax assessed value for the month of December 2009 (Single Family Home Sales Analysis). The data used in that report showed that the average traditional home (one that is not a bank owned or short sale) sold for 86.6% of tax assessed value.
Short Sale Analysis
For those new to what a short sale is I did a more detailed breakdown in a previous post here (Short Sale Rules Benefit Dakota County Homeowners). Because the bank is negotiating to take less than owed before the property goes through foreclosure you would expect that these homes would sell for less than a traditionally sold home. Here is the report -
For the month, there were 19 homes that successfully closed using a short sale (or at least were identified that way in MLS). On average, the average short sale home sold for 73.4% of the Dakota County tax assessed value. So, buyers who were patient enough to make it through the short sale process were rewarded with a better deal. Of course, we don’t know the condition of these homes and many times a short sale home will not be the move-in ready property that a traditional seller is marketing.
Statistical Note
One property that stands out on this list is the one at 10853 Alameda. It looks like they did a terrible job of negotiating based on these numbers. That property started on the market at $899,000 so maybe they thought they were getting a good deal but the statistics here would seem to indicate that the home should have sold for $100,000 less than it did. In fact, the property actually skews my results. If you took out that one property the average of the other 18 homes sold for 70.7% of tax assessed value in Dakota County.
Certified Distressed Property Expert
I am uniquely qualified to help buyers who need to sell a property through a short sale as I have acquired the CDPE designation (I’m A CDPE). In addition, I bought a short sale property in 2009 as my primary residence so I have a lot of experience on that side of the short sale transaction as well.
If you know of someone facing a hardship contact me via e-mail or cell phone (651-338-0355) for a confidential consultation about the options. – Contact Bill
Flipping Makes a Comeback, Cash For Caulkers & Weekly Twin Cities Stats
December 14, 2009
A number of real estate related articles caught my eye this past week that should have an impact on homeowners in the Twin Cities. They were articles about how flipping houses is making a comeback, a new program that President Obama is proposing dubbed “Cash for Caulkers” which is aimed at making homes more energy efficient and the most recent Twin Cities real estate statistics.
Flipping Makes A Comeback
Last week there was an article in the Wall Street Journal about how Flipping (the investment process of buying a home cheap, improving it quickly and selling it for a profit) is making a comeback – House Flipping Comeback
There is definitely an active group of investors that is both buying foreclosed properties to resell/flip and to purchase as rental units. Just last week I made an offer on a nice starter home in East Bloomington. There were 15 offers on the place – mine wasn’t nearly high enough. With the low prices in the market and interest rates below 5% this is a great time to buy rental properties so the flippers do have to compete on almost every low-priced property that’s listed.
Cash For Caulkers
Also last week, President Obama announced plans to support new legislation that would provide current homeowners with up to $12,000 in rebates for home improvement projects – Cash For Caulkers To Provide Up To $12,000
The program contains two parts: money for homeowners for efficiency projects, and money for companies in the renewable energy and efficiency space.
The plan will likely create a new program where private contractors conduct home energy audits, buy the necessary gear and install it, according to a staffer on the Senate Energy Committee and Nadel at the American Council for an Energy-Efficient Economy.
Big-ticket items like air conditioners, heating systems, washing machines, refrigerators, windows and insulation would likely be covered, Nadel said.
These rebates could definitely help sellers to get their homes into a more saleable condition if they are looking to sell or help homebuyers to upgrade a home they want to purchase.
Twin Cities Weekly Real Estate Statistics
The Minneapolis Area Association of Realtors released their Weekly Market Activity Report today for the week ending December 5th, 2009.
Activity was up from the previous week but is down 7.7% from the same period a year ago. We are seeing a slight slowdown in sales, most likely to the previous expiration of the First Time Homebuyers Credit which pushed a lot of activity through November and was scheduled to expire. While the credit did get extended it did pull activity forward into the fall time period which is slowing down a bit now and probably won’t pick back up until we get closer to the new expiration of April 30, 2010.
The most interesting metric from the report was the following one -
Months Supply of Inventory – At 5.7, this is the lowest MSI in more than two years and a full 32.9 percent below last year. This bodes well for sellers in general, but the higher price ranges are still buyer’s markets.
While most people agree it’s a buyers market there continues to be a big reduction in the number of homes on the market which is making this much more of a balanced market, especially in the lower price points.
Conclusion
It’s important to stay on top of the Twin Cities real estate market. House flipping & Cash for Caulkers are just 2 ways that investors and consumers can benefit from knowing what’s available to them. Let me know if you have any more detailed questions on taking advantage of them for your situation – Contact Bill
Dakota County Real Estate Statistics – November 2009
December 9, 2009
The Minneapolis Area Association of Realtors continues to do a great job of collecting and disseminating real estate market data that helps to determine what’s happening with Dakota County real estate. This week they published their December Housing Supply Outlook that takes a look at the supply, demand and pricing trends for single-family, townhouse and condominium properties in the Twin Cities.
Housing Supply Conclusions:
Takeaway #1: In the overall Twin Cities market, home sellers are now getting closer to their original asking prices than they were a year ago. Dig a little deeper, however, and it becomes clear that it’s only the Single-Family Detached segment that’s seeing improvement. The lowest mark for Percent of Original List Price Received at Sale can be found in previously owned condominiums, which post a low mark of 88.6 percent.
Takeaway #2: Home sales continue to look the strongest in the more affordable price ranges. Homes below $190,000 are selling at a 49.9 percent faster clip over the last 12 months than they did the prior 12 months. Above $190,000, sales are down by 10.5 percent.
Takeaway #3: That’s caused some large differences in our calculation of Months Supply of Inventory by price range. The lower price ranges are extreme seller’s markets, while the higher prices ranges still present sellers with challenging conditions.
Market Updates/Statistics For Dakota County
In addition to the broader housing supply analysis, MAAR does market updates on a monthly basis for each city and township in Dakota County. The November 2009 report for Eagan is here below and you can find links to each major market in the county below that –
Apple Valley November 2009 Real Estate Statistics
Burnsville November 2009 Real Estate Statistics
Farmington November 2009 Real Estate Statistics
Hastings November 2009 Real Estate Statistics
Inver Grove Heights November 2009 Real Estate Statistics
Lakeville November 2009 Real Estate Statistics
Mendota Heights November 2009 Real Estate Statistics
Rosemount November 2009 Real Estate Statistics
South St. Paul November 2009 Real Estate Statistics
West St. Paul November 2009 Real Estate Statistics
Drop me an e-mail (bill.wallace@results.net) and I’d be happy to send you these market updates on a monthly basis for your community.
Dakota County Real Estate Sales Analysis – November 2009
December 3, 2009
Yesterday, one of my co-workers made the assertion yesterday that almost all houses south of the river were selling below their 2009 tax assessed value. I thought I’d take up the challenge and do an analysis of all single family homes sold in Dakota County in November 2009 to see if this could be quantified to help set expectations with clients.
What I wanted to do was compare the actual sold price for properties against their tax assessed value and then do some averages across the board. Using the MLS I was able to pull out all single-family homes in Dakota County that sold since November 1st. I specifically, removed any homes that were lender owned or short sales so that it would look only at the traditional home seller. I then exported that data to Microsoft Excel and pulled another report from MLS that showed the tax data for each property. After plugging in that data to the spreadsheet and doing some comparisons and formatting it gave me the following report -
As it turns out, my co-worker was right. Of the 32 homes in my report, 29 of them sold for below their 2009 Dakota County tax assessed value. In fact, on average they sold for WELL BELOW this number at about 90% of value. Although this is depressing data for most people it should help set expectations for clients in this market which is much different than what we’ve experienced in the past. I left the first column (Days on Market) on the report to see if selling faster or slower made much of a difference and it doesn’t look like it.
That said, there are a few homes that sold above or very near tax assessed value and The WE Team specializes in putting together a staging, photography & marketing plan to help our clients get top dollar.
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
Now May Be A Good Time To Sell Your Home In Dakota County
November 23, 2009
The Minneapolis Area Association of Realtors published their Weekly Market Activity Report for the week ending November 23, 2009 and the numbers continue to point to signs that it may be a good time to sell your home in Dakota County. These are the Top 5 reasons why this may be a good time to sell now:
- Home Inventory Way Down – As their report shows, the number of active listings is down significantly in the past year and this is especially true of single family homes. A balanced market is considered 20,000 active listings and we are approaching that now. The full report also shows Days On Market declining and Percent of List Price Received increasing which are positive for sellers.
- Extended Home Buyer Tax Credit – The extension of the Homebuyers Credit will continue to artificially pull buyers that may have bought later in 2010 into making a home buying decision before the April 30th deadline. In addition, the expansion of the Credit to go beyond First-time Buyers opens up a new demographic of buyers that may be moving up into a larger home. Many expect that home prices will stagnate and possibly drop in price once the Credit expires and almost no one expects another extension. Home Buyer Credit Details
- Interest Rates – With 30 year fixed rates hovering close to 5.0% we still have very cheap money out there to help purchase homes (for those that can get financing). Almost all economists are expecting rates to increase at some point. Keep in mind that for every 1% rise in interest rates it cuts buying power by 10% so these low rates are allowing buyers to get into more expensive homes. Wall St. Journal – Fed Not Quite Ready To Raise Rates
- Move Up Buyers Benefit – While the prices of homes has definitely fallen in the past 3 years, this actually benefits buyers who are looking to move up to a more expensive or larger home. Since the prices on larger homes has fallen both on a dollar basis and percentage basis further than any other category, the gap between a starter home and move up home is a lot smaller now. This makes it a lot easier to justify vs. looking at how much less your own home may be worth now.
- Foreclosures - While we saw a bit of a lull in the foreclosure rates in 2009 the pace of foreclosures is expected to increase again into 2010. This time the foreclosure increase is being driven by all those people without jobs instead of bad loans. There are also a number of people just walking away from homes because the value has declined. If there are more lender owned homes it certainly won’t help home values for traditional sellers. LA Times – Foreclosures Keep Rising in 2010
I offer a free Comparative Market Analysis for anyone that wants to look at getting an idea of their home’s value if they want to consider selling their home in Dakota County now. Contact Me For Free CMA
Average Sales Price In Twin Cities – Down 26% in 2 Years
September 21, 2009
While we are seeing some positive signs in the Twin Cities real estate market, a lot of the activity is at the lower end of the price range which is being driven by the $8,000 First Time Homebuyers credit and investors. These groups are snapping up properties that are <$200,000 but many other homes priced above that, especially ones that are not in lender mediation, are struggling to get offers.
The Minneapolis Area Association of Realtors puts out a ton of great research each week & month and the following graphic really caught my eye (Twin Cities Real Estate – Monthly Indicators). The average sales price for homes is down over 26% in the past 2 years. That means if you bought your home in the mid-2000’s, like so many people did, you home is not only worth less than you purchased it for – it may be worth A LOT less than you bought it for.
With so many people getting low down payment loans that means there are thousands of Twin Cities homeowners with a home worth less than they owe on it. Not only is that issue driving a lot of the foreclosures, it’s become extremely painful for people that ARE making payments but want to sell. Coming to the closing with tens of thousands of dollars is not fun but it’s what reality is in this market.
The main blessing is that for those purchasing a replacement home, they are going to get that same level of discount on whatever they purchase which helps make it something of a wash.
Twin Cities September ‘09 Housing Supply Report
September 9, 2009
Months Supply of Inventory by Property Type:
The Minneapolis Area Association of Realtors (of which I’m a member) has published their September 2009 Housing Supply Report and there continue to be good signs in the Twin Cities housing market.
I can very much speak to Takeaway #2 below as 1 of my First Time Homebuyer clients has been in 2 multi-offer situations on <$200k houses. They had 1 deal with 20+ offers and another (which we won) with 8 offers.
September Housing Supply Outlook – MAAR Report
The September Housing Supply Outlook is online now. As usual, here’s a few quick takeaways from this hyper-detailed look at the Twin Cities housing market.
Takeaway #1: The single-family detached market segment is rapidly approaching a balanced equilibrium. There are currently 6.3 months of supply available in that segment compared to 8.0 and 11.7 months in the townhome and condominium segments, respectively. The lower price ranges of the single-family detached segment are actually now extreme seller’s markets, with only 2.3 months of supply available under $120,000, for example.
Takeaway #2: Sales continue to boom below $200,000 as first-time buyers move to take advantage of the final days of the federal tax credit. Expect sales to continue at a brisk pace for the next two months as the “last call before bar close” buyers take advantage of the final days of this substantial market incentive.
Dakota County Real Estate Statistics – Week of Aug 31, 09
September 1, 2009
As a member of the Minneapolis Area Association of Realtors (MAAR) I am regularly updated on the state of the Twin Cities real estate market. As you have probably been reading, the Twin Cities real estate market is heating up the past few months. This is especially noticeable in the lower end of the price range with the impact of the first time home buyers credit and more confidence among investors. I wrote about this yesterday – First Time Home Buyers Credit in Dakota County
MAAR just published their weekly market update for the week ending August 31, 2009 and the good news continues for this market – MAAR Weekly Market Activity Report
In 2006, the inventory of homes for sale was plentiful and buyers were in short supply. Regular followers of our weekly report will have noticed that a shift has been in the works for several months. The week-to-week patterns of pending sales and inventory resemble market patterns from last year, but pending sales have consistently outperformed last year’s numbers. In fact, the most recent week’s 1,012 signed purchase agreements represents a 23.7 percent increase over last year and is the 59th week of the last 60 with a year-over-year increase.
Active listings are dwindling, down 21.2 percent from last year. Inventory supply has dropped from 10.5 months to 7.2 months in the last year, and it has dropped quickly in the lower price ranges where sales activity is the strongest. Shift, change, adjust, correct, stabilize—take your pick of these words when describing today’s housing market, and you’ll be right.
Some of the important numbers on the report – Current Inventory is down from 33,000 homes available to 26,200 which is a huge help. A balanced inventory in the Twin Cities is considered around 20,000 homes. We are also seeing Days on Market decreasing and Percent of List Price received increasing which are good signs for sellers.
Please sign up on the Contact Us page if you’d like to receive these statistics on a regular basis via your e-mail.
Subscribe
Social Network Links
Follow me here -
