Bill Wallace

If you are a first time homebuyer looking to purchase a home in Dakota County you might want to look into programs offered by the Dakota County Community Development Agency. Their Home Ownership Connection program provides Downpayment and Closing Cost Assistance to first time homebuyers that qualify. In other words, Dakota County will loan you up to $10,000 to cover your closing costs under this program.

Usually, a First Time Homebuyer is using FHA financing as must come up with 3.5% of the cost of the home as a downpayment. On a $200,000 home this is $7,000. With this program a buyer who qualifies might need as little as $750 as a downpayment to buy a home. For those that act quickly, it can be combined with the Federal $8,000 Tax Credit which expires on April 30, 2010.

Who Qualifies For this program?

• Homebuyers must be first time homeowners or someone who has not owned their primary residence in the last three years.
• Eligible properties include existing single family homes, townhomes, condominiums or duplexes in Dakota County.
• New construction is eligible in Apple Valley, Burnsville, Eagan, Empire Township, Farmington, Hastings, Inver Grove Heights, Lakeville, Mendota Heights, Rosemount, South St. Paul, Sunfish Lake and West St. Paul.
• Homebuyers must occupy the home as their primary residence after purchase.
• Buyers must have a minimum credit score of 620. Income Limits
• 1 or 2 person households: $83,900
• 3 or more person households: $92,290 Maximum Purchase Prices
• $276,683 for single family homes, townhomes or condominiums
• $389,205 for duplexes (not eligible for additional Downpayment Assistance) Eligible Financing
• The First Time Homebuyer Program may only be used with 30-year amortizing fixed-rate FHA or VA mortgage loans.
• Homebuyers may also utilize the one-time $8,000 federal tax credit in addition to the First Time Homebuyer Program as long as they meet the requirements and deadlines for the federal tax credit. Fees & Requirements
• An application fee of $225 is paid at closing. Mortgage lenders may also charge a $150 transfer fee as part of closing costs.
• Home Stretch Homebuyer Education certificate required prior to loan closing.

What are the Primary Benefits?

Homebuyers accessing the Dakota County CDA First Time Homebuyer Program can also apply for downpayment and closing cost assistance loans up of up to $10,000 depending on household income.

Loan Terms

• Zero percent interest
• No monthly payments
• Loan must be repaid when the primary mortgage is paid off, the home is no longer the primary residence, or when the home is sold or refinanced.
• Borrower must contribute a minimum of $750 of their own funds toward the purchase of the home.
• Home must meet the minimum housing standards for FHA or VA mortgages.

Maximum Loan Amounts & Income Limits

• 10% of the first mortgage amount up to $10,000 for households with incomes at or below 50% of the area median income.
• 5% of the first mortgage amount up to $7,500 for households with incomes between 51% and 80% of the area median income.
• 2.5% of the base mortgage amount for households with incomes between 81% and the First Time Homebuyer Program income limits.

The Home Ownership Connection program has a number of upcoming free seminars that explain more about how to take advantage of this.

Home Ownership Connection also has programs for existing homeowners around Mortgage Foreclosure Prevention, Home Improvement Loans and Energy Assistance.

For more information on how to use these programs or assistance in searching for a home please contact me for assistance - Contact Bill Wallace

It was announced last week that a new dedicated bus stop will be coming to downtown Rosemount as the city has qualified for money from the federal government's Congestion Mitigation Air Quality program which will give $2.3 Million to fund the project. The lot is forecast to hold up to 100 cars and have a waiting shelter but is not expected to be completed until 2014. Complete details were outlined in a recent Star Tribune article - Rosemount Cheers New Bus Stop

"We're very, very happy," said Beverley Miller, executive director of the Minnesota Valley Transit Authority (MVTA), the south-metro transit provider that will run the bus service at the park-and-ride.

The federal grant, combined with a local match, will fund construction of the parking lot and depot and the purchase of buses. The city already owns the land.

Kim Lindquist, Rosemount's community development director, said the city will work with MVTA and other agencies to see if there's a way to accelerate the construction schedule. The city also is finalizing details of its $596,519 local contribution.

The park-and-ride, long desired by the city, has been a lightning rod in relations between Rosemount and the MVTA. In early 2009, Rosemount threatened to withdraw from the transit authority unless service was increased and a park-and-ride was built.

The new Rosemount bus stop will be built in the shaded yellow area in the picture above which is off of 145th Street to the east of Highway 3. It will be just to the south of city hall and between Burnley Avenue and the train tracks.

As a Rosemount resident I am pleased that current and future residents will have additional transportation options. It should definitely help homeowners to have additional ways to get around the Twin Cities.

Two months ago I wrote an article on this blog outlining the huge drop off in high end home sales in Dakota County. Those homes were defined as ones that sold for more than $500k - High End Home Sales Trends in Dakota County Since 2005. As was discussed in the article, the number of $500,000+ homes sold had dropped 75% since its peak in 2005 & 2006.

I decided to go pull a report from MLS to see if there was any renewed activity in this segment. We are in the dead of winter which isn't a great time to buy but there definitely hasn't been any new momentum -

As you can see, there have been only 10 homes sold during the first 2+ months of 2010. I will keep a close on eye on this but I think it's fair to say that so far, high end home sales in Dakota County are still really slow and while we are starting to see lots of activity in the lower price points, at the upper end it is still very much a buyer's market.

The Minneapolis Area Association of Realtors sent out a News Release today to announce that for the 2nd straight month the median home price in the Twin Cities has increased. This is the first back to back monthly increase since 2006. Home Prices Show Signs of Stability

Here were the highlights from the report -

1. For the second consecutive month, home prices in the Twin Cities 13-county metropolitan area showed a year-over-year increase. We haven't seen back-to-back year-over-year increases since 2006.
2. The February median sales price of $159,000 was a 6.0 percent increase from last February's mark of $150,000. That's the strongest year-over-year increase since 2005.
3. There are fewer foreclosure homes selling now than there were last February.
4. The market share of traditional, non-foreclosure homes has grown in the last year, tilting prices upward and stabilizing the market.
5. The median sales price of traditional homes (excluding foreclosures and short sales) in February was $204,900, down only $100 from last February's mark of $205,000.
6. Foreclosures posted a 0.8 percent increase to $120,000, while short sale properties posted a 6.7 percent decline to $145,000.
7. There were 3,527 signed purchase agreements in February, an increase of 6.4 percent from a year ago.
8. We expect home sales to tick up as buyers move to take advantage of the tax incentives before the April 30 deadline.
9. Affordability is outstanding. The current Housing Affordability Index of 213 is the fourth-highest mark ever recorded.
10. Buyer activity has brought inventory down, so there are far fewer homes for buyers to choose from. The March Supply-Demand Ratio of 5.39 means that there are 5.39 homes available per buyer in the month. In March 2008 the mark was 8.16.

Conclusion

The Homebuyer tax credit of $8,000 for first time homebuyers and $6,500 for move up buyers along with interest rates that remain near 5% is creating a large impetus for home sales. As we saw with the "Cash for Clunkers" program and the recent Minnesota Appliance Rebates, free government money does have a positive effect on consumer behavior. Sellers have a 45 day window to get their homes sold. After May 1st expect sales to drop off substantially.

The Minneapolis Area Association of Realtors has released their 2009 Housing Market Analysis entitled the 2009 Residential Real Estate Activity Report. This report shows real estate market data for the entire 13 county Twin Cities market but also breaks out data for each individual city which allows us to view what's going on in each market area of Dakota County.

Overall Statistics

Before looking specifically at Dakota County there were some overall statistics for the entire metro area that really stand out that impacted the Twin Cities residential real estate market in 2009 -

This first chart shows the Price Per Square Foot of finished space over the past 6 years. This is considered a better indicator of market value of an individual home than Median Value. As you can see, the Average Price Per Square Foot peaked in 2005-2006 and has declined almost 30% since that peak. Ouch...

These statistics do vary a lot by city. For example, places like Rosemount ($115/sqft) & Eagan ($113/sqft) are faring better than Farmington & South St. Paul (each $101/sqft). I'd be happy to get you the data for your city but this is a very good, quick way to estimate market value of your home.

Everyone knows that there are lots of Lender Mediated sales (bank-owned and short sale properties) in the market but the fact that 43% of all sales in 2009 were Lender-Mediated should surprise people. Most projections show that there are record numbers of people in default right now, fueled by the bad economy, and Lender Mediated homes on the market may actually increase through 2011

The good news right now is that the market supply of Lender Mediated homes is down and when combined with the Homeowner Tax Credit and 5% interest rates we may see a decent window for Traditional Homeowners to sell before the Credit ends in April.

Dakota County Data

Here is data to look at specific to Dakota County home sales in 2009:

This first chart shows each city within Dakota County and breaks out Total Sales, how many of them were Lender Mediated, New Construction and Single Family vs. Townhouse/Condo. The big thing to look at is the Percent of Lender Mediated homes. A higher number here directly impacts Price Per Square Foot and other metrics.

The 2nd chart shows a breakdown of Average Price, Days on Market, % of List Price Received and most importantly, Price Per Square Foot. As you can see, Mendota Heights was the clear winner in 2009 as only 19% of the homes sold were Lender Mediated leading to a Price Per Square Foot that was much higher than the others. Rosemount and Lakeville rounded out the Top 3.

Conclusion

The real estate market in Dakota County is down around 30% from its peak in 2006 and a lot of the slide can be attributed to the huge increase in Lender Mediated properties. On average, your home is probably worth less than you paid for it unless you bought it before 2002-03. Understanding what's happening by using Market Analysis Data is a primary service your Realtor can help you with to help you make decisions.

For information on any of the data used and/or individual questions about the Dakota County real estate market please visit my website focused on Dakota County Home Sales - Contact Bill