Community Corner

First Quarter 2011 Home Sales in Mendota Heights: Prices Down, Days on Market Improved

Sellers are receiving slightly higher average percentage of listing price.

The real estate market in Mendota Heights is off to a shaky start for 2011. The median price of a home sold in Mendota Heights dropped 17.5 percent to $260,000 compared to the first quarter 2010 median price of $315,000.

In the Twin Cities, the median sales price for a home—the price at which half the homes cost more, and half cost less, as opposed to the average price—dropped 12 percent, from $162,000 in the first quarter of 2010 to $143,000 in 2011.

The local data was released Wednesday by the Minneapolis Area Association of Realtors (MAAR).

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As for the drop in home prices,“That’s a hard statistic to actually put your arms around because at the present time period there just may not be as many expensive homes for sale,” said Kevin Kraus, a real estate agent with ReMax Specialists. “There’s less motivation for people to move up in a down market, and I mean by that not just a down real estate market, but a down economy.”

Kraus said that it’s common for more affordable homes to be the most active when times are tough because life transitions, such as death, marriage and births continue, and often require a change in housing.

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Closed sales in Mendota Heights from which those medians are determined showed a modest decline: 17 closings in the first quarter of 2011 compared to 19 in Q1 2010. The number of closed sales was up almost 1 percent in the Twin Cities.

Mendota Heights has faired reasonably well in terms of housing stock prices compared to the Twin Cities as a whole in past years. By year’s end 2010, the median home sale price had actually risen from $289,000 in 2009 to $310,000.  

Mendota Heights has always been a “good to fair” real estate market Kraus said, based on what he calls the “cost of the dirt.” The “dirt” in this case holds value due to quality of housing stock, the school district, location and proximity to the Robert Street commercial district.

New listings in Mendota Heights are down 19 percent so far 2011, 61 homes were listed the past three months versus 75 that were listed in the first quarter of 2010.

Metro-wide, 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.

 “These are a comparison to last year, which was a tax incentive year,” 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.”

There were four foreclosures in Mendota Heights reported to the Dakota County Sheriff's office in Q1. That compares to 18 in West St. Paul, which has a population 77 percent larger.

The Good News

Homes that did sell languished on the market for fewer days in Mendota Heights, averaging 159 days for sold homes in Q1 2011 and 293 days in Q1 2010. Days listed is calculated between when a property is first listed to when an offer is accepted. Homes sold in March of 2011 sat on the market for an average of 117 days. Homes sold in March of 2010 sat an average of 306 days.

The drop in days listed puts Mendota Heights more in line with metro area days-listed, which increased to 153 from 132 in Q1 2010.

In other good news, the percent of the original list price actually received through a sale has improved slightly, from 89.1 percent in Q1 2009 and 2010 to 90.4 percent in Q1 2011. In other words, a home priced at $100,000 on average would sell for $90,4000. That stands in contrast to numbers across the Twin Cities, which report that the percent fell from 93.5 percent in 2010 to 88.4 percent in 2011.

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.”

 

First Quarter Mendota Heights Home Sales, 2006-2011

(Source: Minneapolis Area Association of Realtors)

First Quarter of Year 2008 2009 2010 2011 Median Sale Price $305,000 $293,500 $315,000 $260,000 New Listings 86 69 75 61 Closed Sales 16 20 19 17 Average Days on Market 137 223 293 159


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