Housing got a lift in October

The temperature is falling, but the housing market continues to warm up.

The Minneapolis Area Association of Realtors reported Monday that there were 4,262 house sales in the Twin Cities during October, a 15 percent increase over last year and one of the best Octobers since the housing crash. The median price was $175,000, up nearly 15 percent.

The data also showed that the length of time homes stayed on the market fell, with the inventory of homes for sale the tightest in nearly a decade.

"Sellers have been hesitant, but with tightening inventory comes improved prices," said Cari Linn, president of the Minneapolis Area Association of Realtors and a sales agent with Coldwell Banker Burnet.

Monthly home sales have increased for several months in a row, while sellers have largely remained on the sidelines, causing overall listing inventory to fall to near-historic lows. At the current sales pace there's only a 4.7-month supply of houses on the market in the Twin Cities metro, slightly below the five-month level that's considered equilibrium.

Last month, however, new listings rose for only the fourth time this year. That's a sign, some say, that sellers are seeing improvements in the market even though many buyers still think they're in the driver's seat.

"Many buyers still think they can offer substantially less -- only to find out the property is now in multiple offers -- because it was priced correctly to begin with and marketed well," said Stephanie Gruver, a sales agent with ReMax Results.

Both CoreLogic and Standard & Poor's Case-Shiller recently said that house price gains in the Twin Cities are surpassing the nation.

Experts say that is because the local unemployment is lower than the national average -- and improving -- and homeownership is within reach to more buyers.

Houses are also relatively affordable compared with local wages. Bankrate.com recently said that the Twin Cities metro was one of the three most affordable housing markets in the country for home buyers.

Ultra-low rates

Another factor helping potential buyers is that mortgage interest rates have hovered near record lows for the past several months. Last week Freddie Mac said that the 30-year fixed-rate mortgage averaged 3.4 percent.

Gruver said that low mortgage rates and particularly strong demand for starter houses means that more buyers are able to trade up to a larger or more expensive residence.

The combined increase in higher-priced sales and a decline in distressed sales helped lift the median price of all closings during October for the eighth consecutive month.

When you factor in changes in the mix of houses and other factors that can have a statistical impact on prices, the Twin Cities house value index last month rose more than 7 percent from a year earlier, according to the Realtors' association.

Agents say that with listings in short supply, houses are selling faster and often at higher prices than they were able to command last year.

On average, houses sold in 104 days, nearly 25 percent less than last October -- often for more than the asking price. "Good properties priced right are bringing multiple offers," Gruver said.