Home buyers in the Twin Cities got a jump on spring last month.
During January, there was an unseasonable increase in signed purchase agreements, suggesting that moderate temps and unexpected declines in mortgage rates roused buyers from their normal midwinter slumber.
"Buyers are ready," said Shannon Plourde of Keller Williams Integrity Lakes. "It feels more like March right now."
The spring market typically begins in March, but many buyers didn't wait. Last month there were 2,986 pending sales, 7.8 percent more than last year, the Minneapolis Area Association of Realtors reported Thursday.
The median sale price last month was $195,000, an 8.5 percent increase over last year. That was the biggest monthly gain since last February and the 35th consecutive month of year-over-year median price gains.
"The steady, ongoing improvement and normalization we saw in January could be indicative of the year as a whole, but only time will tell," said Mike Hoffman, president of the Minneapolis Area Association of Realtors.
The January report, seen as a harbinger of better times, comes after metro-area home sales fell in both 2013 and 2014, shaped mainly by a declining number of foreclosures. Last month, closings were down nearly 10 percent.
Heavily discounted foreclosure listings drove the market's recovery from the 2008 downturn. Traditional listings and move-up buyers are gradually replacing foreclosed properties and the investors who bought them.
Bruce Birkeland, an agent for Coldwell Banker Burnet who specializes in upper-bracket listings, said that last month was reminiscent of 2006, one of his best. He put together seven deals, including some multimillion-dollar sales.
"Fall put everyone back, and it was all a rush after the snow fell," he said. "The new year opened with incredible momentum that seems to be carrying forward."
Home sellers are also competing with thousands of new luxury rental apartments, especially in Minneapolis and St. Paul.
On Thursday, Marquette Advisors said that last year 4,470 new apartments hit the market in the Twin Cities. That's compared with 2,763 in 2013 and 1,428 in 2012. About 3,500 new units are expected to come online this year.
Despite so many new units, the vacancy rate across the metro at the end of the year barely budged. It climbed from 2.5 percent a year ago to 2.9 percent at the end of 2014. That rate, however, doesn't include new buildings still in lease-up mode.
Because most of the new homes and apartments have been built in the downtown, Uptown and U neighborhoods in Minneapolis, there's been stiff competition for homes and apartments in some parts of the metro.
Buyers are ready to pounce when they find a house that's in move-in condition and is competitively priced, agents say.
When Plourde recently listed a house in the Carag neighborhood in south Minneapolis, she had three showings scheduled even before the property was officially on the market. And with a Richfield house that went on the market late last year, Plourde had only one showing in early winter and nine last month.
"We didn't do anything to the house, so I think there's some really good energy in the market right now," she said.
In January there were 4,497 new listings, up 5.9 percent from last year, though sellers weren't able to keep pace with buyers. By the end of the month, there were 11,926 listings on the market, a 6.3 percent decline from last year.
Jim Buchta • 612-673-7376
