Homebuyers in the 13-county Twin Cities metropolitan area entered into 3,756 purchase agreements during February, a 34.2 percent increase over last year. A warm winter helped activity, but low interest rates and affordable prices were likely the main draws. More people signed purchase agreements in February than during February of 2006 and every February thereafter.
Motivated by less competition and an improving economic landscape, sellers were more active, with nearly 5,366 newly listed properties, up 1.1 percent from February 2011. The number of homes for sale continued to drop, down 27.2 percent from last year to 16,689 active listings–the lowest inventory reading for any month since 2003. Month’s supply of inventory was at a six-year low of 4.6 months.
“The mix of homes selling is slowly starting to change which has translated into the smallest price decline since October 2010,” said Cari Linn, president of the Minneapolis Area Association of Realtors (MAAR). “Subsiding price declines are a sign of market rebalance.”
Traditional sales surged 36.2 percent, while foreclosure sales increased 8.5 percent. Both segments had nearly identical market shares, comprising 42.7 and 42.3 percent of overall sales, respectively. Short sales were up 36.3 percent to make up the remaining 15.0 percent of sales.
The seller side of the equation continues to improve in the Twin Cities area as well. For the seventh consecutive month, sellers received more of their asking price than in the year prior. Sellers should take some comfort in the fact that homes are selling in 144 days, compared to 159 last February. That marks the fifth consecutive month of year-over-year decrease in market times.
Those looking to sell their properties should be aware of distressed market activity. Homes in financial distress are exiting the marketplace faster than they are entering it, but they’re still a significant factor. The overall median sales price was down 1.4 percent from February 2011 to $138,000, marking the smallest decline in 16 months. Digging deeper, traditional prices fell 11.6 percent to $183,000; foreclosure prices fell 1.4 percent to $104,000; and short sale prices fell 17.1 percent to $116,000.
“Median sales price is an important market indicator, no doubt, but watching only price activity is short-sighted,” said Andy Fazendin, MAAR president-elect. “Other indicators are offering consistent evidence of a market on the mend.”
