IGH Housing Market Seeing 'Welcome Change of Pace'

The Inver Grove Heights housing market is beginning to show signs of real promise according to June statistics released by the Minneapolis Area Association of Realtors (MAAR). 

The percentage of new homes listed on the market decreased 23.8 percent compared to June 2011. "Distressed sales"—i.e. forclosures and short sales—have flooded the market for years but, according to MAAR, those properties are now coming off the market in significant numbers.

Evidence of this is the fact that the number of closed sales in IGH increased by 31 percent in 2012.  

In addition, the average number of months it would take to sell all the homes in IGH—i.e. the "months supply of inventory"— dropped from 8.6 months in 2011 to 3.4 this year. The decrease is an almost 61 percent improvement over last year's numbers. 

Not only that but the median sales price for homes in IGH is up 0.6 percent and, perhaps more importantly, the average sales price increased from $175,918 in 2011 to $186,208 in 2012. 

These statistics point to a local housing market that is shrinking and stabilizing and, for the first time in a long time, becoming more lucrative for sellers.

The Inver Grove Heights statistics also echo the larger picture across the Twin Cities. 

Regionwide Statistics

Across the region, realtors said, the market is finally starting to tilt in favor of sellers, rather than buyers.

The bottom line: The median sales price in June 2012 rose 10.7 percent from the previous June to $179,500. That’s the second-largest annual gain since January 2004 and the fourth consecutive month of year-over-year gains. Excluding only June 2010, home prices in the Greater Twin Cities area are now at their highest level since October 2008.

That's a result of declining supply, as well as rising demand. In June 2012, buyers signed 4,917 purchase agreements, 16 percent higher than June 2011.

Meanwhile, the number of homes for sale has dropped for 17 consecutive months, down 31.2 percent from last year to 17,103 active listings–the lowest inventory reading for any month since January 2004. Months’ supply of inventory dropped 44.6 percent to 4.4 months, the lowest reading for any month since December 2005.

Realtors cited several other bits of good news from the close of the second quarter: Homes are selling in 113 days, on average, down 22 percent from last year. Sellers are getting an average of 95.1 percent of their list price, up 4 percent from last year. And cash buyers are making up 19.3 percent of all closed sales.

Perhaps most significantly, people putting their homes on the market no longer have to compete with quite such a huge flood of distressed sales. In June, distressed sales accounted for 30.6 percent of all new listings and 34.6 percent of all closed sales, the lowest shares since June 2008 and August 2008, respectively.

"It’s difficult to find a negative trend in the local housing market right now," Cari Linn, MAAR's president, said in a news release. "After many years of decline, it’s a welcome change of pace."