Minneapolis, Minnesota (June 12, 2012) – The month of
May provided another confirmation that the Twin Cities metropolitan
area's housing market continues to positively lean toward market
recovery. During the month, buyers signed 5,130 purchase agreements,
27.3 percent higher than last May, and sellers introduced 6,599
properties to the market, 6.0 percent less than May 2011. This
combination of activity drove down the number of homes for sale on the
market to 17,262, down 31.1 percent.
The
median sales price was up 10.5 percent from last May to $169,000.
That's the third-largest jump since January 2004 and the third
consecutive month of year-over-year gains. Prices have risen 22.5
percent since February (from $138,000 to $169,000). Home prices are now
at their highest level since October 2010.
"Residential home prices have been increasing steadily," said Cari
Linn, President of the Minneapolis Area Association of REALTORS®. "It's
been a positive change for our local housing market and it's been a long
time coming."
Prices are "melting up" because distressed properties now comprise a
smaller share of overall sales. Since traditional homes sell for a
median price of $205,000, foreclosures sell for $116,350 and short sales
go for $135,000, these shifts have translated into notable price gains.
Traditional closed sales were up 50.1 percent, while foreclosures
fell 12.8 percent and short sales increased 12.9 percent. Together,
distressed homes made up 31.1 percent of all new listings and 39.4
percent of all closed sales, the smallest shares since June 2008 and
September 2008, respectively. Traditional sales made up the remaining
60.6 percent of all closings and sold for 76.2 percent more than
foreclosures and 21.3 percent more than metro-wide prices, further
supporting the strong gain in overall median sales price.
The number of homes for sale has dropped for 16 consecutive months,
down 31.1 percent from last May to 17,262 active listings – the lowest
inventory reading for any month since January 2004. The month's supply
of inventory plunged 45.6 percent to 4.5 months – the lowest reading for
any month since December 2005.
Homes sold in 125 days, on average, down 19.6 percent from last May.
Sellers received an average of 94.5 percent of their list price, up 3.8
percent from 91.1 percent last May. Cash buyers made up 20.1 percent of
all closed sales, down from 22.2 percent at this time in 2011.
"May looks great on paper and on the street," said Andy Fazendin,
MAAR President-Elect. "Buyers are active, sellers are starting to see
some brightness on their end and the market is rediscovering a nice
balance."
All information is according to the Minneapolis Area Association
of REALTORS® (MAAR) based on data from the Regional Multiple Listing
Service of Minnesota, Inc. MAAR is the leading regional advocate and
provider of information services and research on the real estate
industry for brokers, real estate professionals and the public. MAAR
serves the Twin Cities 13-county metro area and western Wisconsin.