Twin Cities area home prices dropped sharply again in March as buyers continued to take advantage of bargains on distressed properties, according to a widely read gauge of U.S. home sales.
The Standard & Poor's/Case-Shiller national home price index reported Tuesday that home sale prices in the Minneapolis-St. Paul area fell 6.1 percent from February. That's the largest monthly decline of any metro area in the 21-year history of the benchmark. The average monthly decline for 20 major markets was 2.2 percent. Charlotte, N.C., and Denver managed to show slight month-to-month increases, while prices in Dallas were unchanged from February to March.
The year-over-year decline from March 2008 for the Twin Cities was 23.3 percent, according to S&P. That was steeper than the 18.7 percent average drop for the 20 major markets, but not as significant as some metropolitan areas such as Phoenix, Las Vegas and San Francisco, where prices fell by more than 30 percent from a year ago.
David Blitzer, chairman of S&P's index committee, said researchers believe the sharp monthly price decline in the Twin Cities area was caused by an unusually large number of foreclosure-related sales. Steve Havig, president of the Mineapolis Area Association of Realtors, agreed.
"There has been a large inventory of properties that has gone on the market in lender-mediated sales," Havig said. In March they accounted for 60.5 percent and in April for 46 percent of homes sold in the Twin Cities area, he said.
Havig said his association believes it will take one to two years to work through the inventory of distressed properties in the Twin Cities area.
"The pricing has been very aggressive. We're now beginning to see multiple offers on some of these lender-mediated sales -- so much that it's actually starting to push prices up somewhat," Havig said. He said the association believes local prices could bottom out in the next month or so.
Mary Bujold, president of multifamily housing consultant Maxfield Research Inc., said the monthly price figures also could be dragged down because of generally slow sales activity. "This market typically doesn't start getting revved up until March," she said.
Blitzer also cautioned against putting too much stock in monthly price figures. "The market is bouncing around," he said. "We see no evidence that a recovery in home prices has begun."
More housing data are to be reported this week when the National Association of Realtors releases April sales data for previously owned homes, and the Commerce Department reports figures on sales of newly built homes.
Susan Feyder • 612-673-1723
