Minneapolis, Minnesota (February 11, 2011) – Pending sales increased 3.7 percent from January 2010 to land at 2,838 for January 2011. That's the first year-over-year increase since the tax-credit salad days of April 2010.
Prices slid during January 2011, as the median sales price decreased a heavy 10.8 percent from January 2010 to $140,000. A larger share of homes sold this January were foreclosures and short sales compared to a year ago, which explains part of the decline. Traditional, nondistressed properties actually saw their Median Sales Price increase by 1.9 percent from a year ago to $201,500.
"Distressed homes made up more than half of the homes sold locally in January," said Brad Fisher, President of the Minneapolis Area Association of REALTORS®. "Buyers tend to shop for value during the winter months, equating to lower prices, while traditional sales begin to warm up with the spring thaw."
Challenging conditions for sellers are evident in growing market times and stronger price reductions before sale. The Average Days on Market Until Sale of 146 in January 2011 is a 9.4 percent increase from January 2010, and the Percent of Original List Price Received of 87.9 is the lowest number on record.
With interest rates remaining low and prices showing no signs of rapid rise, affordability is soaring. The Housing Affordability Index for January of 241 is a new record and indicates extremely favorable conditions for buyers.
The supply of homes is growing. Inventory increased 14.0 percent from a year ago to 23,880 units, which amounts to 7.6 months of supply. This is in the face of a 15.6 percent decline in the number of new listings coming on the market. The slowed sales seen in the second half of 2010 have led to short-term increases in supply.
"The economy remains the elephant in the room, and housing is not immune to market dynamics," said Cari Linn, President-Elect of the Minneapolis Area Association of REALTORS®. "Nevertheless, we're encouraged by the sales bump in January and look forward to a strong spring."
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.
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