With summer ending and the foreclosure crisis waning, home sales in the Twin Cities are downshifting.
Last month, there were 5,291 closings in the 13-county metro area, 7.3 percent fewer than last year, according to the Minneapolis Area Association of Realtors.
Despite the decline in sales, the median price of those closings increased 5.3 percent to $219,001, marking the 30th consecutive monthly increase and the highest median sales price for an August since 2007.
"The market is still rebalancing," said Emily Green, president of the Minneapolis Area Association of Realtors. "Buyers and sellers really need to dig into their particular market segment and location with their agent to get the best information, because the overall picture is shifting."
Fall always brings a slowdown in sales, but there's another factor at play the year: The foreclosures crisis is fading, changing the fundamentals of the recovery.
RealtyTrac said Thursday that statewide there was a 5 percent decline in foreclosure filings, including default notices and scheduled auctions, from July to August and a 37 percent decline from last year. Nationwide, those filings increased 7 percent from the previous month but were down 9 percent from a year ago.
"Although the foreclosure crisis is well behind us, the messy business of cleaning up the distress lingering from the housing bust continues in many markets," said Daren Blomquist, vice president at RealtyTrac.
Foreclosures in the Twin Cities metro are now almost back down to prerecession levels. That's a good thing for struggling homeowners and for neighborhoods besieged by empty houses and declining values. But that also means there are fewer deeply discounted listings and a dwindling number of investors to buy them, which has been a drag on home sales.
Last month, foreclosure sales fell 50.4 percent while sales of traditional homes not owned by banks posted a 4.6 percent increase.
While there were fewer buyers than last year, there's been a steady supply of sellers.
During August, there were 6,958 new listings, a 0.1 percent increase over last year. And with sales falling and listings rising, buyers have more options than they did last year. There were 18,205 properties on the market during August, 8.7 percent more than last year and the sixth month of year-over-year inventory gains.
At the current sales pace, there are enough houses on the market to last 4.4 months, slightly below equilibrium.
Fall is never a hot time for housing, and buyers are already preoccupied with back-to-school activities and end of summer distractions. Pending home sales, an indication of future closings, fell 7.0 percent to 4,802.
Susan Hofflander, an agent with the Re/Max Results in Shoreview, calls it the "summer doldrums."
"We have people who have just come back from vacation or are trying to squeeze a vacation in before the end of summer," said Hofflander. "While it's not unusual for August to be somewhat slow, it still makes sellers nervous."
Hofflander said that upper-bracket houses in Maple Grove and other suburbs aren't selling as quickly as less expensive houses in some markets, so there's a healthy supply of houses that have been on the market for several months. To help drum up some excitement about those listings, she pulled together several agents from other brokerages to host the "Maple Grove Executive Home Tour" on two Saturdays in September.
Last Saturday, about 40 to 50 groups toured those houses, including a two-story, Arts and Crafts style with a butler's pantry and two-story deck she has listed for $519,900.
"Even though inventory is up and buyers can be a little more choosy," she said. "We haven't lost any ground with regard to prices."
Jim Buchta • 612-673-7376
