For real estate, it's going to be the year sellers will want to forget. Just-released data from the Minneapolis Area Association of Realtors and several other Realtors' groups shows that home sales last year were down 16.8 percent compared with the previous year - a year that everyone had hoped would have been the worst. Despite the steep decline in sales and a steady stream of bargain-priced foreclosure sales, the median sale price of all closed sales last year was $169,900, 2.3 percent increase from 2009. That increase is largely attributed to relatively stable prices on sales that did not involve foreclosures or short sales, and a late-season rise in the sales of upper-bracket houses.
What the forecast for 2011? Pat Paulson, president of the Minneapolis Area Association of Realtors is optimistic that the number of listings and sales will continue to grow increase next year, and that the median sales price will increase to $175,000. Foreclosures will continue to flood the market for at least the next couple year, continuing the drag on upward pressure on prices.
"These are small increases that demonstrate more stability, a market that's likely to grow slow and gradually, but growth nonetheless is good," Paulson said.
The 2010 housing market was defined by the federal home buyer's tax credit, which expired at the end of April. The credit helped drive home sales during the first half of the year, but it also caused a dramatic downturn in sales after its expiration when the incentive dried up. Some say that the credit did little to help the market because it only borrowed future demand, while others say that it helped give the market a critical boost at a time when consumer confidence was in the pits. Whatever the case, home sales last year fell dramatically near particularly because of weak sales during the final months of the year.
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