Eagan Home Sales Increase in August

Housing sales in Eagan more than doubled from August last year to last month, according to a new Minneapolis Area Association of Realtors report. Last August, real estate agents closed on 42 homes, but last month 92 closings occurred, the report shows.

Still, housing prices fell more than 21 percent year-over year. In August last year, the average sales price on an Eagan home was $243,946; last month, the price fell to $192,111.

Real estate agent Patti Kellum, a 26-year veteran who works out of Coldwell Banker’s Eagan office, said the downturn in prices is related to short sales and sales of foreclosed homes.

“In the south suburbs, 40 to 50 percent of home sales are short sales (where the bank holding the seller’s mortgage agrees to take less than the amount owed), or bank-owned (resulting from foreclosure),” Kellem said. Not only do those homes sell for substantially less than traditional sales, they also raise sellers’ expectations that homes be “aggressively priced and in showable condition,” she said.

Traditional sales don’t generally compete with short sales, which are notorious for taking substantially longer to close. Kellum herself wrote a purchase offer that was submitted to a bank in October 2010; the sale did not close until May of 2011. But traditional sellers do often compete with bank-owned properties, Kellum said.

There were also fewer homes on the market last month than a year ago. “Many sellers are waiting for the market to return,” Kellum said. “They are going to be waiting awhile.”

Potential sellers may be relocating, or people who bought at the “right time” and have either substantial equity or can buy a new house at a lower interest rate, she said. And “move-up” buyers, who will sell their current home for a lower price than they could have five years ago but will buy a more expensive home, at a much lower price, can also do well in this market, Kellum said.

Kellum thinks now is an ideal the time for first time buyers to become homeowners. “The only way to know where the bottom is, is after prices have started to go up,” she said.