Business & Tech

Q1 Real Estate Report Reveals Sale Price, New Listing Decline for Eagan Homes

Despite new statistics on the median sales price and the number of new listings and pending sales throughout Eagan and the Twin Cities, realtors are "cautiously optimistic" about the spring and summer markets.

The Eagan real estate market continued its downward spiral in the first quarter of this year, with new listings plummeting almost 21 percent compared to the first quarter of 2010, and the median sales price down almost 30 percent.

Broker and Manager Donald Harff said the decrease in new listings is a "direct reflection of foreclosed properties that haven't hit the pipeline yet."

Some sellers are choosing to wait as well, according to Harff.

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He also stated that the median sales price for a new home -- the price at which half the homes cost more, and half cost less, as opposed to the average price -- may be down almost 30 percent, but that doesn't mean the values of homes have dropped that significantly. Instead, it means homes with lower price values are selling more today than homes that were selling a year ago.

"We have a lot of first-time home-buyers and not move-up buyers," Harff said.

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The average number of days on the market at this time last year was 77, and that has risen in 2011 to 129 days (a 67.5 percent increase). Without seeing the homes, Harff credits this to the condition of the houses and said the MAAR report doesn't take into account the listings that are unlisted and then re-listed.

"You aren't going to sit on a home that's priced right and is in good condition," Harff said.

The Twin Cities real estate market is seeing the same issues. New listings have decreased by almost 25 percent compared to the first quarter of 2010, pending sales are down almost 11 percent and the median sales price is down almost 12 percent.

“These are a comparison to last year, which was a tax incentive year,” Minneapolis Area Association of Realtors (MAAR) Communications Director Greg Sax said. “So the numbers are going to be down, no matter what.

“At the same time, we are seeing that lender-mediated properties are still dominating the market. We’d like to see fewer of those, but it is what it is.”

Harff agreed, saying statistics from last year "were artificially propped up by the government stimulus tax credit, and now the market is standing on its own two feet."

The only slightly bright spot in the first-quarter statistics: The number of closed sales was up almost 1 percent in the Twin Cities.

But the other regional numbers added to the dismal picture:

The median sales price dropped from $162,000 in the first quarter of 2010 to $143,000 in 2011.

The percentage of the original list price fell from 93.5 percent in 2010 to 88.4 percent in 2011. In other words, houses listed for $100,000 tended to sell, on average, for $88,400. The average number of days between when a property is first listed to when an offer is accepted swelled from 132 days in the first three months of 2010 to 153 days in the first quarter of this year.

The number of new listings fell from 23,754 in the first quarter of 2010 to 17,845 during the same period this year. That number included newly listed lender-mediated homes -- foreclosures and short sales.

In spite of the numbers, Cari Lynn, president-elect of MAAR, expressed optimism.

“Layoffs have decreased, and we are building on 13 consecutive months of job growth, which bodes well for local real estate,” she said in a statement. “In addition to new housing demand, we should eventually see the mortgage delinquency rate drop and fewer distressed sales pressuring prices downward.”

Sax also pronounced the real estate industry “cautiously optimistic” about the upcoming summer and fall.

“That’s where we feel like we’ll start to see some relief,” he said. “It isn’t going to be extreme, but it won’t be as trying as last summer.”

Harff echoed that statement by saying that homes in Eagan are selling. He said if homes are priced competitively, staged nice and in good condition, they should receive multiple offers and should sell within 30 days. 

"We sometimes have a shortage of those [homes]," Harff said.

The next hurdles Harff said buyers/sellers will most likely see is an increase in interest, which will especially affect sellers because it will push sales prices down since buyers won't be able to afford what they once could.

"[Overall], I don't think we're in a horrible place for our market right now; people are still buying and selling," he said. "[However], before homes go up in value, we need them to stop going down in value. I think we will see this happen this year."


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