Rising rents, relatively affordable home prices and low-interest rates continue to contribute to a brisk Twin Cities housing market.
New listings for houses in September rose 19.3 percent to 6,372, marking the sixth consecutive year-over-year increase in monthly seller activity, the Minneapolis Area Association of Realtors (MAAR) reported Thursday. Buyers closed on 4,667 homes, up 14.5 percent over September 2012.
But there are signs that activity may slow a bit after a frenzied spring, as buyers and sellers approach inevitable mitten weather, and as the inventory of houses continues to be constrained.
“People don’t want to move in wintertime, and certainly not during the holidays,” said Herb Tousley, director of the Shenehon Center for Real Estate at the University of St. Thomas.
The median sales price for a home increased by 11.7 percent in September to $195,000 compared with the same period last year. But that figure dropped from $207,724 in August, which had declined from July.
“These numbers show the market is heading back toward a more-balanced market, which isn’t a bad thing, since the market was so fierce in the spring,” said Joe Welu, a Chanhassen-based agent with Re/Max Advantage Plus who specializes in the hot southwest Twin Cities market.
Likewise, the number of distressed properties on the market has continued to decline. In September 2012, the number of foreclosures and short sales comprised 46.1 percent of all closed sales — compared with only 21.9 percent of sales last September.
In addition, while closed sales were up 14.5 percent overall, traditional buyer activity increased 37.3 percent. Foreclosure and short sales were down 27.3 percent and 30 percent, respectively.
“With price gains continuing and multiple-offer situations still common, market recovery and stability has been the order of the day,” said Emily Green, MAAR’s president-elect. “Activity should begin its season slowdown, but we expect year-over-year activity to remain positive.”
On average, homes are selling in 71 days, a figure that hasn’t been so low for about six years.
Tousley said inner-ring suburbs and urban neighborhoods “close to the core,” such as Highland Park in St. Paul, still are hot tickets in residential real estate. But in outer-ring suburbs, sellers may find it a bit harder to find a good match.
Jim and Ann Meyer put their “Brady Bunch” four-bedroom home in Farmington on the market in August, and it remains there, now at $219,000. The couple updated the 1970s-era home before listing it, rehabbing the kitchen and bathrooms. They hope to move to Minneapolis, closer to family, once selling the home.
“We are at the very south border of Farmington, it’s quiet and next to a nature preserve,” Jim Meyer said. “We’re near the beauty of southern Minnesota, but close to the Cities. We think it’s a great place to live.”