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Community Corner

Eagan Real Estate Market is Balancing

Compared to a year ago there are fewer homes for sale and prices have dropped.

"All the areas around Eagan really wish they were Eagan, but they really don’t compare, Eagan really is the best. They’re jealous, they talk behind Eagan’s back – but we all know why they do that," realtor Robert Stewart of Keller Williams said of the real estate market in Eagan.

While many communities throughout the country are still reeling from the effects of the sub-prime mortgage crisis, record foreclosures, and a down housing market, the Eagan tale differs.

Some of the highlights in November’s Local Market Update by Minneapolis Area Association of Relators include a 12 percent decrease in median sales prices, nine percent decrease in new listings and a 16.4 percent decrease in the average sales price.

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Comparatively, in the region, the median home price in November was $149,250, down 10.1 percent from its already-depressed levels in the same month a year earlier. That’s largely due to so-called "lender-mediated activity," shorthand for foreclosures and short sales, which comprised 44.1 percent of all closed sales and 41.9 percent of new listings.

Stewart compared Eagan’s November’s 286 active listings to the 434 active listings in November 2010 representing a 34 percent decrease, supporting his "Eagan is best" mantra.

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The decrease in available housing, the Eagan realtor said, corresponds to the months of supply inventory  – the number of months needed to sell all of the homes currently in the Eagan market . It’s a drop of 8.2 months of supply in November 2010 to 4.3 months of supply last month –which follows a shift from a buyers market to a balanced market to a seller’s market. 

In November, sellers across the Twin Cities region received an average of 90.9 percent of their asking price. That figure was likely helped by the 30.6 percent decrease in the supply of inventory–currently at 5.7 months. Generally, a market with five to six months of inventory is considered balanced.

But the number of homes for sale in the 13-county Twin Cities metropolitan area plunged nearly 24 percent from last year to 19,516--the lowest November inventory reading since 2004. In addition, November 2011 marked only the third month in more than five years in which there was less than six months supply of inventory. Sellers listed 4,102 new homes on the market, down 13.6 percent from last year. Buyers entered into 3,321 purchase agreements, up 30.2 percent over November 2010.

Ordinarily, such a big drop in inventory would indicate a rising market, but "prices are still bound by distressed activity, budget-conscious consumers and a general sense of economic uncertainty," said Brad Fisher, MAAR’s president.

Some sellers, at least, are benefiting from less competition. The share of asking price that sellers receive at sale has now posted year-over-year increases for the fourth consecutive month.

"Prices don't reflect the improved supply-demand balance yet," said Cari Linn, MAAR’s president-elect. "Although there are some reassuring patterns taking hold, it would be overly optimistic to say that all of the market's problems will be washed away by spring."

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