The Twin Cities list of foreclosed homes for sale declined, pushing up house prices in the 13-county Minnesota metropolitan area in February this year, based on reports released by the Minneapolis Area Association of Realtors.
In February, the median home sales price for Twin Cities homes increased year-over-year by six percent to $150,000 largely because of the lower number of foreclosed homes sold during the month.
If foreclosure sales in February were excluded from the calculations, the home sales price median would have been around $204,900. The decrease in foreclosure homes also pushed up foreclosure sale prices by 0.8 percent to $120,000. Short sales, meanwhile, were still low at $145,000, marking a year-over-year drop of 6.7 percent.
Brad Fisher, head of MAAR, said that the increase in conventional nondistressed sales has started stabilizing the market and driving up prices. He said he expects a sharp increase in home sales in the coming weeks as home buyers try to beat the April 30 federal tax credit deadline.
In February, a total of 3,527 home purchase contracts were signed, marking a jump of 6.4 percent from the total in February last year. Because of the stepped up home buying activity, the total housing inventory has dropped. Only 5.39 housing units on the market are available for every prospective buyer, down from the 8.16 ratio in March 2008.
With the decline in Twin Cities home inventory and in list of foreclosed homes, analysts and real estate professionals hope that home prices and house sales will continue to improve.
Sales of higher-priced homes, however, dropped in February. Sales of homes in the price range of $250,000 to $350,000 declined by 6.2 percent year-over-year. For homes in the price range of $500,000 to $1 million, total sales fell sharply by 20 percent. The drop in sales of homes priced above $1 million was even sharper at 35.8 percent.
Because of the slow sales of high-end homes, the inventory of high-cost homes has gone up to almost 32 months, up by almost 39 percent from the February 2009 supply level of 22.8 months. In contrast, the supply level for homes priced between $150,000 and $190,000 price range has fallen by 21 percent to only 5.6 months.
According to Alex Stenback, mortgage banker with Residential Mortgage Group, despite the current decline in the Twin Cities list of foreclosed homes, there are still a lot of concerns among market participants because of the continued rise in mortgage delinquencies.
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