Hunting for Market Bottom? You May Have Missed It
Minneapolis, Minnesota (May 10, 2012) – The momentum from March continued into April as the market showed further signs of strength and stabilization. Homes are selling faster, sellers are seeing a greater share of their asking price and prices continued to climb over year-ago levels. Driven by sub-4.0 percent interest rates and high affordability, buyers have been active in 2012.
The median sales price for the Twin Cities metro area for April 2012 was up 12.4 percent from last April to $163,000. That’s the largest jump since January 2004. Since median sales price can be manipulated by the mix of homes that happen to close in a given month, whether condos, foreclosures or new construction, the Minneapolis Area Association of REALTORS® (MAAR) has developed a new home price index through its 10K Research and Marketing division that will account for that changing mix of homes selling as well as for seasonality. The 10K Home Price Index is now part of MAAR’s Monthly Indicators, available at mplsrealtor.com.
“The index will provide a more accurate view of home value movement,” said Cari Linn, President of the Minneapolis Area Association of REALTORS®. “For example, traditional home sales now account for the majority of the market, which tends to drive up median and average prices since they tend to sell for more than foreclosure properties.”
Indeed, traditional sales were up 58.8 percent, while foreclosures fell 8.1 percent and short sales increased 13.8 percent. Distressed homes made up 34.0 percent of all new listings and 39.3 percent of all pending sales, the smallest shares since July 2008 and August 2008, respectively. Traditional prices fell 2.2 percent to $198,500; foreclosure prices jumped 15.9 percent to $119,900; short sale prices fell 4.4 percent to $129,000. Traditional sales made up 57.1 percent of all closings and sold roughly 50.0 percent more than foreclosures and 20.0 percent more than metro-wide prices, generating the strong gain in overall median sales price.
The number of homes for sale has dropped for 15 consecutive months, down 29.2 percent from last year to 17,312 active listings – the lowest inventory reading for any month since January 2004. Months supply of inventory plunged 44.0 percent to 4.6 months – the lowest reading for any month since August 2005.
On average, homes sold in 135 days, down 14.9 percent from last April. Sellers received an average of 93.3 percent of their list price, up from 90.1 percent last April. Cash buyers made up 20.7 percent of all closed sales, down from 24.8 percent at this time in 2011.
“We’re impressed with the accelerating improvements,” said Andy Fazendin, MAAR President-Elect. “High-quality, move-in-ready inventory is limited. Those waiting for falling prices will likely be disappointed.”
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.