A decline in the number of distressed sales gave state and national home prices a healthy boost last month, a pair of reports released Tuesday showed.
Nationally, prices rose 10.1 percent to $178,000, according to the National Association of Realtors. In Minnesota, the median price rose 11.5 percent to $145,000.
Home sales also rose in April, with state sales up 0.3 percent and U.S. sales up 3.4 percent.
"People are feeling a little more confident," said June Wiener, president of the Minnesota Association of Realtors (MAR), the group that released the state report.
Wiener and other agents say that while investors are still out in force, more traditional buyers are getting into the market. This includes people who are trying to move their families before school starts and those who want record-low mortgage rates.
"There are lots of indications that now is the time to buy," Wiener said.
Last month, foreclosures and short sales represented just 20 percent of all sales in Minnesota, according to MAR. This shift from distressed sales toward pricier transactions helped lift the median sale price. In the Twin Cities area alone, the percentage of distressed sales was 42.8 percent, the lowest percentage in 17 months, according to the Residential Real Estate Price Report Index by the Shenehon Center for Real Estate at the University of St. Thomas.
Herb Tousley, director of real estate programs at the center, said while the data indicate that foreclosures appear to be finding a bottom, the crisis isn't over.
"There are still many properties that need to be sold and the relatively high rate of distressed-property sales is going to be with us for several years," he said.
Tousley said that increasing sales of traditional, single-family homes are a positive development for the market because it represents growing confidence. And because that shift comes at a time when inventory is falling, prices will eventually rise if sales remain strong.
Statewide the supply of houses for sale fell 53 percent last month.
MAR divides the state's markets into 13 economic development regions, and while most mirrored what happened across the state, that wasn't true in every region. Several areas saw steep declines in the median sale price, including the upper Minnesota Valley region where the median price was down 12 percent.
Generally, recovery is happening most quickly in those markets where there is job growth. And some parts of the state that are popular with lake home buyers are also seeing strength.
Bill Hansen, broker-owner of Bill Hansen Realty, said that in the Longville-Walker-Hackensack area of northern Minnesota, the strongest demand is for year-round lake homes because prices are well below the cost of new construction.
"We've reduced our inventory of lake homes," he said. "But not enough to put upward pressure on prices yet."
Jim Buchta 612-673-7376