Home sales in Minnesota and across the country continued a streak of year-over-year increases during June.
The Minnesota Association of Realtors said Thursday that statewide home sales were about 5 percent higher than last year. Because of a decline in foreclosure sales, the median price of those deals jumped 10.4 percent to almost $160,000.
"We're busier than we've been in two years," said Denise Green, a sales agent with Thunder Lake Realty in Remer, Minn.
Nationally, sales in June were up 4.5 percent from last year but down 5.4 percent from May to a seasonally adjusted annual rate of 4.37 million homes, the lowest number of sales since October, according to the National Association of Realtors (NAR). The group's chief economist, Lawrence Yun, said that the decline was the result of supply constraints.
"Inventory continues to shrink, and that is limiting buying opportunities," he said. "This, in turn, is pushing up home prices in many markets."
The decline also signals that there may be lingering concerns about the economy, analysts said.
The reports come weeks after the Minneapolis Area Association of Realtors said metro area sales were up by double digits. The Home Value Index also shows that prices have risen for three consecutive months.
A similar trend is taking shape in most regions of the state, where closings increased on a year-over-year basis for 12 straight months. The median price of those sales increased in every region in June.
Year-over-year sales rose in all 13 economic development regions tracked by the group. The statewide data includes only properties that were listed and sold through a regional Multiple Listing Service.
While the broader trends are positive, the recovery has been uneven across the state's many submarkets. Communities with high unemployment rates are still seeing listings languish and prices fall.
Green, the sales agent in Remer, said there's been a noticeable shift in the market this summer, and her office is busier than it has been in years.
"Our economy is so impacted by what's going on in the Cities," she said. "If people are doing better in the Cities, then they come up more frequently."
Green senses Twin Cities consumers are feeling more optimistic about their financial prospects, and that translates into more spending during weekend getaways.
Rural parts of the state, including the Remer area in north-central Minnesota, have not been immune to foreclosures and short sales, Green said. Many would-be sellers are upside down on their mortgages, constraining inventory.
Concerns over the economy are being offset in part by record-low mortgage rates. On Wednesday, Bankrate.com, Freddie Mac and others said that the average 30-year fixed-rate mortgage had fallen to new lows this week. Freddie Mac's weekly survey said the 30-year now averages 3.53 percent with an average 0.7 point. Last week it averaged 3.56 percent; last year, 4.52 percent.
June Wiener, president of the Minnesota Association of Realtors, said that in months ahead she expects inventory to keep declining as sales increase and willing sellers wait for higher prices. As that happens, prices will naturally rise as buyers realize that they have far more competition than this did last year.
"We are seeing more multiple offers on homes for sale in Minnesota," she said. "And many buyers are starting to put their offers in very quickly to avoid losing out on a property they love."
Jim Buchta 612-673-7376