A Third Consecutive Month of Price Gains

Minneapolis, Minnesota (June 12, 2012) – The month of May provided another confirmation that the Twin Cities metropolitan area's housing market continues to positively lean toward market recovery. During the month, buyers signed 5,130 purchase agreements, 27.3 percent higher than last May, and sellers introduced 6,599 properties to the market, 6.0 percent less than May 2011. This combination of activity drove down the number of homes for sale on the market to 17,262, down 31.1 percent.

The median sales price was up 10.5 percent from last May to $169,000. That's the third-largest jump since January 2004 and the third consecutive month of year-over-year gains. Prices have risen 22.5 percent since February (from $138,000 to $169,000). Home prices are now at their highest level since October 2010.

"Residential home prices have been increasing steadily," said Cari Linn, President of the Minneapolis Area Association of REALTORS®. "It's been a positive change for our local housing market and it's been a long time coming."

Prices are "melting up" because distressed properties now comprise a smaller share of overall sales. Since traditional homes sell for a median price of $205,000, foreclosures sell for $116,350 and short sales go for $135,000, these shifts have translated into notable price gains.

Traditional closed sales were up 50.1 percent, while foreclosures fell 12.8 percent and short sales increased 12.9 percent. Together, distressed homes made up 31.1 percent of all new listings and 39.4 percent of all closed sales, the smallest shares since June 2008 and September 2008, respectively. Traditional sales made up the remaining 60.6 percent of all closings and sold for 76.2 percent more than foreclosures and 21.3 percent more than metro-wide prices, further supporting the strong gain in overall median sales price.

The number of homes for sale has dropped for 16 consecutive months, down 31.1 percent from last May to 17,262 active listings – the lowest inventory reading for any month since January 2004. The month's supply of inventory plunged 45.6 percent to 4.5 months – the lowest reading for any month since December 2005.

Homes sold in 125 days, on average, down 19.6 percent from last May. Sellers received an average of 94.5 percent of their list price, up 3.8 percent from 91.1 percent last May. Cash buyers made up 20.1 percent of all closed sales, down from 22.2 percent at this time in 2011.

"May looks great on paper and on the street," said Andy Fazendin, MAAR President-Elect. "Buyers are active, sellers are starting to see some brightness on their end and the market is rediscovering a nice balance."



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.