Despite the slowdown, the $195,000 median home selling price in the Twin Cities held steady, and was up 13 percent from a year ago.
Jeff Schultz, an agent with ReMax in Waconia, recently visited a new listing to pick up keys, install a lock-box and have the sellers sign paperwork. New listings are not keeping pace with home sales, resulting in a reduction of the inventory of houses for sale.
The holiday season is not the most wonderful time of the year for Twin Cities real estate, but the seasonal dip in home sales got an extra kick last month from a decline in the number of bargain-priced foreclosures and short sales.
Buyers closed on 3,760 new homes, down 5.9 percent from a year ago, the monthly report from the Minneapolis Area Association of Realtors showed Wednesday.
Foreclosures and short sales accounted for 22.1 percent of all closings, down from 35.6 percent a year ago, the report said. New listings, meanwhile, fell 5.3 percent.
Even though there were fewer transactions, the median sales price held steady at $195,000 for the third straight month, and was up 13.4 percent from a year ago.
“I think it’s a healthy sign that the median sale price is showing a year-over-year increase,” said Herb Tousley, director of real estate programs at the University of St. Thomas. “While the November and December housing reports may not be terribly exciting, because there’s not much activity at this time of year, I expect improvement after the holidays and heading into spring.”
In a separate report, the St. Paul Area Association of Realtors noted that last year’s November data showed a jump that broke the seasonal pattern. It said the drop in home closings and new listings this November “are not proportionately out of line with the typical Twin Cities market’s seasonality.”
The Minneapolis Realtors report said that the real estate market will be stronger in the long run as foreclosures and short sales decline.
“Some might claim that the recovery is stalling, but the reality is that job growth is gaining momentum and there are fewer distressed properties being listed and sold than at any point in the past five years,” said Emily Green, the Minneapolis Realtors association president-elect.
Mike Hunstad, an agent with Counselor Realty of Coon Rapids and president-elect of the St. Paul association, said it will take another two to three years for distressed homes to be washed out of the system. “With the way interest rates are holding, I think traditional sales can make up for the diminishing sales of distressed homes,” he said.
Jeff Schulz, a real estate agent with Re/Max Advantage Plus who concentrates on the western suburbs, said he expects more sellers will emerge after the holidays. “In the first and second quarters of 2014, we’ll see traditional sales numbers increase again,” he said.