Three reports released today provide more evidence that the local and national housing markets are improving, but that a recovey is going to be long, slow and with plenty of bumps.
- The University of St. Thomas released its February Residential Real Estate Price Index, which showed that the percent of all sales that were either foreclosures and short sales rose from 55 percent in January to 57 percent in February. “This level continues to have a dampening effect on median prices,” according to Herb Tousley, director of real estate programs at St. Thomas. The index showed that the median price for a traditional home (not a foreclosure or short sale) decreased sharply in February after recording a slight gain in January. The month-to-month drop was 4.8 percent (from $193,000 in January to $183,700 in February) while the year-to-year drop was 11.2 percent (from $207,000 in February 2011 to $183,700 in February 2012). Tousley attributes the decline to a decline in the percentage of upper-bracket houses and increase in lower-priced condos that sold during February.
- The Minnesota Association of Realtors said that throughout the state there was a 15 percent increase in closed sales during February — only a slight increase from January, but that the median price of those sales increased .8 percent to $124,900. That was the first increase in nearly two years, and nine of the 14 regions tracked by the Association saw increases or no change in the median sales price. “The market will continue to improve as we see homes recover some of the value lost in the past few years,” according to June Wiener, the association’s president. “We must also remember that this is a long recovery – and losses can’t be reversed in just a few months or couple of years.”
- And finally, the National Association of Realtors (NAR) said that across the country during February year-over-year sales were up 8.8 percent, but month-to-month sales took an unexpected dip. From January to February sales fell .9 percent to 4.59 million unit annual sales pace. Analysts at Wells Fargo Economics group said that the decline was likely “payback from the unseasonably warm weather.” NAR doesn’t track nationwide home prices, but it did say that distressed sales represented 34 percent of closed deals during the month, mostly foreclosures. Also worth noting: Nearly a third of all signed deals didn’t close (appraisals have been difficult) and 33 percent of all sales were paid for with cash (investors are out in force).