Frigid temps and a scarcity of fresh listings put the brakes on Twin Cities home sales last month.
There were 2,536 home sales in the 13-county metro last month, a 13 percent decline compared with last year, according to a report Wednesday from the Minneapolis Area Association of Realtors.
“Agents and their clients aren’t too excited about going out in 30-degree-below windchill and looking at homes,” said Mark Bartikoski, a Wayzata agent who said that even the promise of more balmy weather is already lifting the market. Last week, he entertained three offers in one day on a $775,000 midcentury modern house in Edina that had already been on the market about a month.
“Now that the weather is breaking,” he said. “We’ll see a real spike in traffic.”
Though the decline in sales might suggest that the recovery is stumbling, there was evidence to the contrary last month. Houses sold more quickly than they hit the market in many areas, with new listings falling 11.5 percent.
“Would-be sellers have an opportunity to benefit from [low] inventory levels and get ahead of the spring market if they list their property,” said Michael Hunstad, president of the St. Paul Area Association of Realtors.
A steep decline in foreclosure sales and a jump in pricier home transactions last month helped boost the median price of those deals 12.4 percent to $179,900. In addition, sellers received 93.5 percent of their asking price. Houses also sold much faster last month than they did in 2013. On average, they sold within 93 days of hitting the market, a 12.3 percent decline compared with January 2013.
What’s happening in the Twin Cities mirrors what’s happening across the country. This week, the National Association of Realtors said that inclement weather caused pending home sales — an indication of future closings — to fall nearly 9 percent to the lowest level since October 2011.
“Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers,” said Lawrence Yun, the association’s chief economist.
Despite a recent drop in sales, housing markets in the Twin Cities and beyond continue to see promising declines in the number of heavily discounted distressed sales. During January, there was a 34.7 percent decline in foreclosures sales and a 54.3 percent decline in short sales in the 13-county metro, pushing home prices up as investors and other bargain hunters exit the market.
That trend, a reflection of declines in unemployment and the housing recovery itself, is playing out across the state. On Wednesday, the Minnesota Home Ownership Center said there were just 11,834 foreclosure sales across the state last year — the fewest since 2005. That was a 34 percent decline from the previous year and less than half the number of annual foreclosures at the peak of the crisis.
Julie Gugin, executive director of the Minnesota Home Ownership Center, said that if the housing market continues to heal at the same rate that it has been, foreclosure rates could return to more normal levels within the next 12 to 18 months.
“However, we can’t lose sight of the fact that while this most recent report is encouraging, it still means that more than 11,000 Minnesota families lost their homes and thousands more struggled with payments,” she said.