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Foreclosures Sale Fueled Home Sales Growth in Twin Cities

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By : John Cutts    99 or more times read
Foreclosures sale activities fueled the increase in home sales and in pending home sales in the Twin Cities of Saint Paul and Minneapolis in 2009.

According to figures from the North Metro Realtors Association, the Saint Paul Area Association of Realtors and the Minneapolis Area Association of Realtors, a total of 52,167 home sales were pending as of the last month of 2009, an 18.4-percent increase from pending sales in 2008. The number of closed house sales rose by 16.7 percent.

Jim Stanton, head of the North Metro association, said many of the buyers were first timers in the housing market. They took advantage of the federal tax credits and helped wipe out a big portion of the surplus supply of homes.

Brad Fisher, head of the Minneapolis realtor association, added that low interest rates and record numbers of affordable homes contributed to the sharp rise in home sales in 2009.

Twin Cities realtors said that 2009 was far better than 2008 for the housing sector as sales shot up, excess inventory fell and the supply of homes available for sale reached its healthy level of five-month supply.

High foreclosures sale numbers made home prices affordable to many, pushing the median home sales price to $166,000 in 2009, the lowest since 2000 and nearly 15 percent lower than the median in 2008. However, the median home sales price in December 2009 was only three percent lower than the median in December 2008, indicating that prices have been stabilizing.

Condo foreclosures also helped push down home prices in the area. According to an analyst studying MLS in the cities, about ten percent of condos for sale were distressed, as there was an oversupply of condo units since the latter part of 2006.

A lot of condo owners have been renting out their units after failing to sell them even at much lower prices. Realtors said that it takes much longer to sell condo units downtown than VA homes and other single-family houses in other parts of the city. They said that there are still a lot of new condo units from projects completed in 2005 that remains unsold.

According to the three realtor associations, a big percentage of homes priced below $150,000 and sold in 2009 were foreclosures sale properties, marking a 72-percent increase from foreclosure sales in 2008 and indicating the large number of first time home buyers in 2009.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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