Our local REALTOR Association reports:
Minneapolis, Minnesota (April 12, 2011) –Pending sales in the 13-county Twin Cities metropolitan area decreased 17.6 percent from March 2010 to 4,162 purchase agreements signed. Sellers introduced 6,977 new properties to the market, which was 30.2 percent fewer than the year prior. Inventory levels shrunk by 4.5 percent to 24,112 units—the lowest March inventory count since 2005. This trend will help stabilize prices and restore balance to the market.
Market conditions were particularly strong at this time last year due to the 2010 tax credit, making 2009 and 2008 more reliable comparison years. Pending sales were down a less dramatic 5.6 percent from March 2009 and they were actually up 14.6 percent over March 2008. Closed sales were down 3.5 percent from March 2010 but were up 2.7 percent over March 2009 and up 17.4 percent over March 2008.
Market activity can vary greatly from one segment to the next. Although overall purchase activity was down 17.6 percent, the foreclosure segment saw a 31.3 percent jump in pending sales and a 29.9 percent jump in closed sales. Foreclosure prices decreased 11.0 percent to $105,000; short sale prices decreased 6.9 percent to $134,950; and traditional prices decreased 3.5 percent to $192,000. While the bargain status of lender-mediated homes unquestionably helped their popularity surge among consumers, that same popularity pushed overall prices down 15.2 percent to $140,000.
"Foreclosure sales accounted for roughly 40 percent of pendings and 43 percent of closings," said Brad Fisher, President of the Minneapolis Area Association of REALTORS®. "While those market shares are in line with recent trends, they're still higher than what we would like to see."
Proper home pricing and conditioning are the key items in the seller’s survival kit. The average days on market was 152 days, an increase of 17.8 percent. Negotiations unsurprisingly favored buyers as the percent of list price received at sale declined to 88.6. The months of inventory supply grew slightly to 7.7 months. That is up 16.9 percent from last March but mostly flat from last month.
"Layoffs have decreased and we are building on 13 consecutive months of job growth, which bodes well for local real estate," said Cari Linn, President-Elect of the Minneapolis Area Association of REALTORS®. "In addition to new housing demand, we should eventually see the mortgage delinquency rate drop and fewer distressed sales pressuring prices downward."
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.
This is proving to be true in West Savage as well. Foreclosure and short sales are making up 40% of the West Savage market and sales. And West Savage inventory is very low compared to typical spring levels. Buyers continue to put home pricing under the microscope as they cross-compare pricing between the traditional and distressed markets.