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
High End Home Sales By City
I decided to look at the sales in more detail and break down the decline by the cities that have had the large majority of these types of homes. In 2005, there were 7 cities in Dakota County that had the vast majority of $500k+ homes sold.
As you can see from the graph, Lakeville has taken the biggest fall in high end home sales as they went from 75 homes sold in 2005 to just 13 in 2009 – an 83% drop (compared with the 75% drop for Dakota County as a whole). From a percentage standpoint, Inver Grove Heights fared the best with a drop of only 50% while Apple Valley had a strange jump in 2008. Rosemount finished building out the majority of its Evermoor development by 2008 but anyone who wanted to sell had a hard time.
New Vs. Existing High End Sales
I thought that we might see a big downward trend in new construction, high end home sales but surprisingly (at least to me) they have been pretty steady -
As you can see, new $500k+ homes made up 26% of those sold in 2005, had a slight increase in 2006 & 2007 and then settled back into the 25% range the past 2 years.
Days On Market and Average Size Of Home
Two other metrics I thought would be telling in this market were to look and see how long it took to sell these high-end homes and what size of a home constituted a $500k+ home. For the DOM/CDOM stats I took out new home sales which really don’t sit on the market the same way.
The DOM column represents Days On Market which is an average for the number of days a listing takes to sell. As you can see, the DOM was steadily increasing since 2006. The thing it doesn’t measure is when home is taken off the market and then put back on as a new listing even though it’s really the same house trying to be sold. Therefore, in 2007 the MLS introduced CDOM or Cumulative Days On Market to measure the total of all the days to sell a home even if it spanned across multiple listing periods. From this view we get a much better snapshot showing that, on average, it’s approaching 1 year to sell a high-end home.
The other column shows the Average Total Square Feet of the homes sold each year. Here you can see that from 2005-2007 the average $500k+ home was 3,800 square feet but since that time, in order to be considered a $500k+ home, the size of your home must be a lot bigger.
Taking Advantage Of The Numbers
My goal in doing this is to help my buyers know another set of data to help them negotiate and to help my sellers both set expectations and beat the averages using our marketing processes. I do have a $500k+ listing closing next week in fact.
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.