Tuesday, October 18, 2011

3 in a row!

Residential property sales in Minneapolis and St. Paul metro area saw a gain for the 3rd straight month in a row. This has been fueling positive views for a market that has been burdened by declining values and foreclosures.

Homes sales for September 2011 were up 26 percent comparing it to September 2010. Pending homes rose by 40 percent during that same time. All time low mortgage rates and demand for beginner homes helped to drive sales, this according to a report from the Minneapolis Area Association of Realtors.

We still face an uphill challenge. Home transactions are still near historic lows, and with bank owned properties dominating the market, price values on traditional listings are declining quicker than normal. Even though pending sales are mostly on the rise they don't always result in a closed sale.

Still, short sales and foreclosure properties represent nearly 40 percent of all transactions, putting a huge "dark cloud" on prices. The median sales price for Minneapolis and St. Paul metro area is $155,500, that is 7 percent lower than September 2010.

Brad Fisher, president of the Realtor association said:

"The report was encouraging but it is going to take awhile for prices to reverse course. There is typically some lag time between improved market balance and price movement.”

Just last month, home values on traditional listings were down 12 percent.

"Hopefully, that’s an anomaly”, says Herb Tousley, director of real estate program at the University of St. Thomas.

Some people are concerned that investors are driving the market. I, for one, think investors help our market. They purchase homes that need rehab work and then sell it to an able buyer. Investors are making our home values go up.

Hopefully our trends stay the same way and we see more positive news than negative.


Scott Wollmering is a long time Realtor with Re/Max Results in Apple Valley. He is also the team lead for the WE Team, one of Re/Max’s top team for the state of Minnesota. Scott is a co-host for a weekly radio show, The Minnesota Real Estate Show, every Saturday on AM 1130 from 11 am – 12 pm.

Jennifer Thompson



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