The housing recovery in the Twin Cities appears to be back on track.
Home sales in February rose 1.3 percent, their biggest gain since October 2013, and a sign of optimism for the months ahead.
“If February is any indication, this spring is shaping up to be everything that spring markets should be,” said Mike Hoffman, president of the Minneapolis Area Association of Realtors.
The group said Thursday there were 2,557 sale closings in the metro area with a median sale price of $202,000, a 10.4 percent jump and the 36th consecutive month of annual increases.
The increase in sales — though small — comes after a disappointing 2014 when sales were down nearly 7 percent.
While the spring buying season doesn’t officially begin until March, buyers hit the listings earlier than usual.
“Right after the Super Bowl it just went crazy,” said Bill Hirsch of ReMax Results, who recently got four offers on a 2,400-square-foot loft condo in St. Louis Park. The two-story unit, in a converted school building, was priced at $374,900.
“On the listing side, it’s been real busy, and the buyers have been coming out of the woodwork, too,” Hirsch said.
Some attribute the uptick to pent-up demand and historically low mortgage rates.
Pending home sales — an indication of future closings — increased 21.8 percent over last year. Sellers brought 5,690 new listings to the market, a 23.2 percent annual increase.
Despite the slew of new listings last month, the market’s inventory is still tight. There were 12,700 properties on the market last month, a 2 percent decline from last year.
The listing shortage was particularly acute for investors and first-time buyers on the hunt for bargains.
There was a nearly 30 percent decline in foreclosure and short sale listings last month.
In Minnesota and across the country, the foreclosure crisis is quickly abating. This week, the Minnesota Homeownership Center said the number of homes lost to foreclosure in Minnesota last year fell to the lowest level since 2005.
Statewide, there were only 8,309 foreclosures last year, a 29 percent decline from 2013.
“Foreclosure prevention efforts across the state, combined with improvements in how banks and servicers deal with struggling homeowners and a slowly improving housing market are allowing more homeowners to avoid losing their homes,” said Ed Nelson, spokesman for the Minnesota Homeownership Center.
While investors are fleeing the market because they now have so few options, traditional buyers are taking their place. Pending sales to buyers who will occupy the property rose a whopping 41.5 percent.
That shift is creating deep demand for move-in ready properties, especially in popular neighborhoods that are walkable and close to public transportation.
Barb Duthler, a longtime agent in south Minneapolis and the inner-ring suburbs, said that demand now exceeds supply in some areas, creating stiff competition among buyers.
She has a listing in south Minneapolis that hit the market on a recent Friday and within 48 hours had three offers.
“That is kind of typical,” she said. “There’s a pool of buyers out there who have already lost on a property, so they’re much more willing to pounce sooner.”