Community Corner

Rosemount Housing Inventory, Median Home Price Drops

Even with the significant drops, realtors promise there's still some good buys on the market.

Regionally, the Minneapolis Area Association of Realtors (MAAR) reported, the residential real estate market is still in the toilet--but at least the toilet is no longer plugged.

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. For Rosemount, the median home price dropped 14.5 percent from 2010 to 2011. For just November, median homes prices were at $198,000 in 2010 and decreased to $178,000 this year. 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 regionally.

"The decline in median sales price reflects the type of inventory being purchased. The amount of distressed properties sold in Rosemount in Nov. 2011 was 43 percent compared with 34 percent in 2010. Distressed properties usually sell for the lowest prices, bringing the overall median price down," Sheryl Petrashek, a local Re/Max realtor, said.

"We still have a fair share of short sales that are coming on the market and it affects everyone," Apply Valley Edina Realty Realtor Mike Heinzerling said. "The seller has to compete; it all depends on the seller."

Find out what's happening in Apple Valley-Rosemountwith free, real-time updates from Patch.

Heinzerling also said the time homes spend on the market has increased.

Year-to-date, in 2010, Rosemount homes were on the market for 122 days and in 2011 it increased to 135 days on the market, he said.

Find out what's happening in Apple Valley-Rosemountwith free, real-time updates from Patch.

In addition, 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.

In Rosemount, there was a 48 percent drop in inventory compared to last year for the month of November. 

"Our inventory drop is good for sellers," Heinzerling said. 

"The statistics in most of the Metro area reveal a very unusual combination. number of sales are up, housing inventory on the market is down, yet prices are continuing to decline. Ordinarily when we have more sales and declining inventory we would expect to see prices rise," Petrashek said. "The reason prices are not rising in response to falling inventory is because the a higher percentage of homes being sold are distressed properties."

Brad Fisher, MAAR's president, echoed Petrashek's comment. "Prices are still bound by distressed activity, budget-conscious consumers and a general sense of economic uncertainty."

Some sellers, at least, are benefiting from less competition.

Heinzerling stated, "New construction Lennar homes in Rosemount seem to be doing very good in competing in the base market."

The share of asking price that sellers receive at sale has now posted year-over-year increases for the fourth consecutive month. 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.

"It's kind of stabalizing ... There's not as many buyers out right now because of the time of year, with the holidays and weather," Heinzerling said.

The first and fourth quarters of the year tend to see the most distressed sales and listing activity. Consequently, traditional prices fell 9.2 percent to $187,400, foreclosure prices dropped 14.3 percent to $98,500 and short sale prices were down 11.5 percent to $130,000.

The good news: The housing affordability index hit a new record high of 245, meaning that the median household income in the region was 245 percent of what is necessary to qualify for the median-priced home under prevailing interest rates.

"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."


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here