The Minneapolis Area Association of Realtors sent out a News Release today to announce that for the 2nd straight month the median home price in the Twin Cities has increased. This is the first back to back monthly increase since 2006. Home Prices Show Signs of Stability
Here were the highlights from the report -
- For the second consecutive month, home prices in the Twin Cities 13-county metropolitan area showed a year-over-year increase. We haven't seen back-to-back year-over-year increases since 2006.
- The February median sales price of $159,000 was a 6.0 percent increase from last February's mark of $150,000. That's the strongest year-over-year increase since 2005.
- There are fewer foreclosure homes selling now than there were last February.
- The market share of traditional, non-foreclosure homes has grown in the last year, tilting prices upward and stabilizing the market.
- The median sales price of traditional homes (excluding foreclosures and short sales) in February was $204,900, down only $100 from last February's mark of $205,000.
- Foreclosures posted a 0.8 percent increase to $120,000, while short sale properties posted a 6.7 percent decline to $145,000.
- There were 3,527 signed purchase agreements in February, an increase of 6.4 percent from a year ago.
- We expect home sales to tick up as buyers move to take advantage of the tax incentives before the April 30 deadline.
- Affordability is outstanding. The current Housing Affordability Index of 213 is the fourth-highest mark ever recorded.
- Buyer activity has brought inventory down, so there are far fewer homes for buyers to choose from. The March Supply-Demand Ratio of 5.39 means that there are 5.39 homes available per buyer in the month. In March 2008 the mark was 8.16.
The Homebuyer tax credit of $8,000 for first time homebuyers and $6,500 for move up buyers along with interest rates that remain near 5% is creating a large impetus for home sales. As we saw with the "Cash for Clunkers" program and the recent Minnesota Appliance Rebates, free government money does have a positive effect on consumer behavior. Sellers have a 45 day window to get their homes sold. After May 1st expect sales to drop off substantially.