Home buyers hit the pavement last month

Just Listed brings you the latest news and information from the Twin Cities-area commercial and residential real estate market and beyond from veteran reporters Jim Buchta and Janet Moore.

Home buyers hit the pavement last month

Posted by: Jim Buchta under Buying Updated: July 13, 2011 - 11:11 AM

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This house along Penn Avenue in North Minneapolis was one of 4,127 closed sales during June. It was listed at $225,000 and sold for $195,000

A summer bloom for the housing market?

While home sales during June were down compared with last year at this time and slack demand and a high proportion of foreclosure sales caused prices to fall, the number of pending sales in the Twin Cities metro area was up almost 50 percent during the month as buyers took advantage of falling prices and near-record low mortgage interest rates. The increase in signed purchase agreements, an indication of future closings, is a baby step towards price stabilization, said Brad Fisher, president of the Minneapolis Area Association of REALTORS. “Moderate price gains by year’s end aren’t out of the question,” he said “Today’s prices are a return to sustainable recovery after a tax incentive honeymoon.”

Pending sales for the month were higher than they were in all but one month during 2007, 2008 and 2010.

The median price of all closed sales was down 9.3 percent to $165,000 from a year ago with most of those declines coming from deep discounts on foreclosure sales. Prices on those bank-owned lists were down 12.8 percent to $106,000, short sale prices were down 15.9 percent to $130,000 and prices on homes sold the traditional way were down 6.8 percent to $202,000.

Compared with May, the median sale price of all closed sales during June was up almost 6.5 percent.

The market is also being helped by declines in the total number of houses for sale. During June there were 6,942 new properties to the market, a 5.5 percent decrease from last year, causing overall inventory levels to fall 15.9 percent — the lowest June inventory count since 2005.

While the impact of foreclosures on the broader market continues to be significant, there are some signs that the crisis has begun to stabilize. As they typically do during the spring and summer market as familie shop for houses they hope to move into before the beginning of the school year, investor activity ebbed slightly last month, causing foreclosure and short sales to fall to about 38 percent of all sales, down from earlier this year and the lowest level since June 2010. About 29 percent of new listings were distressed, one of the lowest monthly totals since June 2008.