Lakeville Housing Market on the Mend?

Housing sales numbers in Lakeville for August showed improvement, but year-to-date, most major indicators in town are still trending down according to a new Minneapolis Area Association of Realtors report.

Closed sales spiked more than 28 percent in August compared to last year, jumping from 53 closings to 68. But year-to-date, the report says only 15 more homes have been sold in 2011 compared to this time last year, up just 3.1 percent.

And despite the slightly improved sales figures, the report says home prices slid more than 9 percent from $255,588 in August of 2010 to $232,017 this year. But that's , when the median pice of a home that sold dropped to $192,000.

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.”

In Lakeville, according to the MAAR report, there are more than 200 fewer houses on the market right now than there was in August of 2011—a drop off or more than 19 percent.

Kellum said it's hard to gauge where the bottom of the market is. “The only way to know where the bottom is, is after prices have started to go up,” she said.