It looks like Burnsville might finally beat the recession-era blues: The local housing market ended 2012 on a high note, with prices on the rise and a marked increase in closings.
Burnsville is not the only city to experience a revival over the last year. Realtors say 2012 has been the closest thing to a boom market the Twin Cities region has seen in almost a decade: Prices are up and the average amount of time homes spend on the market is way down. At the same time, the number of foreclosures, which tend to depress prices, has fallen considerably.
“We’re very encouraged by the recovery we saw in 2012,” said Andy Fazendin, president of the Minneapolis Area Association of Realtors (MAAR).
Fazendin expects these gains to continue in 2013. Now, all the market needs is more sellers. With the area’s economy recovering and interest rates at historic lows, “we clearly saw behavior (among buyers) change from the start of 2012 to the end of 2012.”
The result: The median price of a home in Burnsville rose 12 percent (from $147,750 to $165,532). The increase is modest compared to some neighboring communities (Apple Valley home prices rose a spectacular 21.4 percent during 2011), but encouraging nonetheless.
The number of days homes spent on the market dropped 23.3 percent, a dramatic decline: In Burnsville, the average home sale now spends 111 days on the market. Over 2011, the typical home sold in 145 days, about five months.
Even with the rebound, however, prices have a long way to go before returning to the values of the past decade. The Twin Cities’ region overall median price at the end of 2012 was $167,900. That’s way up from the $150,000 median of a year earlier, but at its peak in 2006, the median hit $230,000.
Over 2012, the price of an average Burnsville home increased to $168,532, which is better than the rock bottom values of 2011 ($154,801), when the market reached its nadir. But that's still just 70 percent of the pre-recession average ($243,395 in 2006).
As a result, many homeowners are apparently still reluctant to list their properties for sale, Fazendin said. Inventory is at a 10-year low, and some people who want to buy homes “are writing four or five offers (and) still not getting a house.”
Fazendin believes the problem will self-correct, however.
“Sellers soften trail buyers” in getting excited about the market, he said. In 2013, he expects the median price across the region to grow an additional 8 percent to 13 percent, which should result in more “For Sale” signs sprouting up.