A Real Estate Rebound in Inver Grove?

Twice as many homes in Inver Grove Heights sold last month as compared to February 2011, according to statistics released last week by the Minneapolis Area Association of Realtors.

The Realtors’ Local Market Update says 22 home sales closed in Inver Grove Heights during February. Eleven closed during the same month a year ago.

For the year, home sales have shown a staggering 90-percent increase over 2011. Forty-two sales closed during January and February, compared to 22 during the same period last year.

Other positive trends reported in Inver Grove Heights’ real estate market for February include:

• The median sales price of $139,462 improved 14.8 percent from February 2011.

• The average price per square foot of $81 is $2 higher than a year ago.

• The average days that a home is on the market dropped from 171 last February to 159 last month.

• The number of homes for sale decreased 20.7 percent from a year ago, from 164 to 130.

• The months supply of inventory—the amount of time it would take to sell every home on the market—is down 38.3 from a year ago, from 7.3 months to 4.5 months.

On the negative side, the average sales price for a home in Inver Grove dropped from $207,027 in February 2011 to $184,412 last month.

METRO-WIDE NUMBERS

Across the 13-county Twin Cities region, the median sales price of a home saw its smallest year-over-year decline in 16 months, falling only 1.4 percent from February 2011 to $138,000. Realtors said the relatively small decline, along with a host of other statistics, could indicate that the area’s long real estate slump is nearing an end.

For instance:

• Homes now require an average of 144 days to sell, compared to 159 last February; it was the fifth consecutive month of year-over-year decreases in the average amount of time required to complete a sale.

• Home buyers entered into 3,756 purchase agreements during February, a 34.2 percent increase over the same month last year, and more than any February since 2005.

• The number of homes for sale continued to drop, down 27.2 percent from last year to 16,689 active listings—the lowest such reading for any month since 2003.

• The months supply of inventory  was at a six-year low of 4.6 months.

• And sellers, on average, got 90.7 percent of their asking price, up from 88.3 percent in February of 2011.

Realtors said the improvement is due, at least in part, to the slowdown in foreclosure sales, which typically depress the market’s median value, sometimes dramatically. In February, traditional residential real estate sales surged 36.2 percent, while foreclosure sales increased only 8.5 percent. Both segments had nearly identical market shares, comprising 42.7 and 42.3 percent of overall sales, respectively. Short sales—in which banks agree to accept less than the current value of the mortgage—were up 36.3 percent to make up the remaining 15 percent of sales.

“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.  “Subsiding price declines are a sign of market rebalance.”

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