Report: Average Sales Price For Homes in Inver Grove Heights Continues to Slump

Despite an unusually active June, the first half of 2011 hasn't been kind to the local real estate market.

Foreclosures and short sales continue to drag down the average sales price of Inver Grove Heights homes, which currently stands at $186,641, according to the latest report from the Minneapolis Area Association of Realtors. That figure represents a 10.3 percent decline compared to the first half of 2010.

But the average sales price for homes on the local market isn’t the only statistic that dropped when comparing the first half of 2011 to the first six months of 2010.

The number of new home listings coming on the market in Inver Grove Heights through June this year has fallen 9.5 percent compared to the same period last year, according to the report. Closed sales in Inver Grove Heights also fell slightly in the first half of 2011; at this point in 2010, there were 139 closed sales, compared to 145 during the same period last year.

But one falling statistic has Edina Realty Sales Manager Tony Haider looking up. The number of new listings coming on the market fell by nearly 10 percent in the first six months of 2011 compared to the first half of 2010, which means the market is less saturated, said Haider.

"As supply decreases, we’re going to get more of a balanced market, when right now there are so many homes for buyers to look at,” said Haider, who works in the Inver Grove Heights area.

Haider acknowledged that June was an unusually active month, with 63 new listings coming on the market in Inver Grove. But that, he says is an example of activity rebounding after poor weather early in the year, rather than a reflection of local market saturation.

Still, local Realtor Terrance Hogan said, it will be a long time before the market recovers from the saturation of foreclosed and shortsale homes.

"I think it’s the same wherever you go, there’s still a lot of backed-up inventory on the books that the banks have, and there’s more coming do every day," said Hogan, a broker for Gold Eagle Realty. “It’s going to be a long, long time before real estate values are going to go up."

Those problems could be compounded, Hogan said, if legislators choose to close a tax loophole that allows homeowners to deduct the interest they pay on a home mortgage from their taxes. Legislators are considering ending the home mortgage interest deduction as part of a debt ceiling deal.

Twin Cities Region

Statistics compiled by the Minneapolis Area Association of Realtors also paint a relatively dour picture of the regional housing market in the Twin Cities. Home sales across the region in the first half the year lag 17 percent behind sales for the same period in 2010, and the average sale price fell nearly 8 percent. The average number of days homes have stayed on the market before selling has increased from 125 in the first half of 2010 to 149 in the first half of 2011.

But pending sales in the 13-county Twin Cities metropolitan area were rose 48.1 percent June 2011 compared to June 2010, according to a press release issued by the association. Home sales took a nosedive last summer, Haider said, after the deadline for an $8,000 first-time homebuyer credit ran out.

To find out more about real estate trends for both Inver Grove Heights and the region, click on the pdf files attached to this article.