Minnesota's housing market appears to be on the mend, but fluctuating numbers in Inver Grove Heights are giving local real estate professionals cause for pause.
Area realtors reported Wednesday that residential real estate prices across the Twin Cities are on the rebound; the median price of homes sold in March was up 6.4 percent from the same month last year—the first such year-over-year increase since October 2010.
But according to a report from the Minneapolis Area Association of Realtors (MAAR), the median price of a home in Inver Grove Heights in March 2012 was $129,900—almost 31 percent below its level in March 2011.
Still, local real estate professionals are seeing several positive signs in the market.
In fact, the number of closed sales in the first quarter of this year in Inver Grove Heights is up 63 percent compared to 2011.
"Over the last six months there has been a growth spurt in buyer activity, which is causing an increase in closed sales," ReMax Specialists realtor Greg Kuntz told Patch. "Buyers are more confident, the economy is showing signs of strengthening and low interest rates are making pricing very attractive."
In addition, the number of new listings on the market in Inver Grove Heights has seen a 24.1 percent decrease when comparing March 2011 to 2012.
"What we're not seeing is many homes coming back on the market," Kuntz said. "The number of foreclosed and short-sale homes are not keeping pace with the absorption rate. I'm not saying there are no more of them out there, but a lot of these homes have been absorbed. In today's market, that's a positive thing."
When asked whether the positive trends would continue in Inver Grove Heights, Kuntz's curt "Who knows?" spoke to the uncertainty of the marketplace.
Across the region, realtors reported several signs of an improving market. In addition to the median price boost:
- The price-per-square-foot measurement of home value increased for the first time since June 2010.
- Pending home sales were up 20.4 percent in March and are already higher than any month in 2007, 2008 or 2011.
- The months supply of inventory—the amount of time it would take to sell every home on the market—fell nearly 40 percent to 4.6 months. That’s the lowest reading for any month since January 2006.
- Compared to 2011, sellers are getting a greater share of their asking price from buyers.
Andy Fazendin, MAAR’s president-elect, was reluctant to declare the downturn in housing prices at an end. But he added, “It’s looking increasingly likely the worst is behind us. We continue to see encouraging signals from the market that allow for an improving view on residential real estate in 2012.”
The improved median price is, in large part, a reflection of the changing market. “Distressed” properties sold through foreclosures and short sales, which tend to bring much lower prices than homes sold the traditional way, made up only 34.6 percent of all new listings in March, the smallest share since July 2008.
Meanwhile, realtors say an unusually warm March helped boost buyer activity, and the market received additional boosts from low interest rates, affordable prices and a sense of urgency caused by tightened inventories.
The number of homes for sale continued to drop, down 27.5 percent from last year to 17,081 active listings, the lowest inventory reading for any month since January 2004.