The median home price in the Twin Cities 13-county area rose for the 14th consecutive month in April, placing the Twin Cities real estate housing recovery center stage, The Minneapolis Area Association of Realtors announced Friday.
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The Twin Cities real estate market, covering the cities of Minneapolis and St. Paul, continues above the national average home price appreciation gains year-over-year, as the market experiences a mix of higher listings and more consumers searching for inventory as sellers re-enter the market. The Minneapolis Area Association of Realtors said Friday the median home price in the Twin Cities 13-county area rose for the 14th consecutive month in April, a new record not seen in four years.
Minneapolis home prices continued to inch up slow and steady with the S&P Case-Shiller home price index limbing upward from 146.1 in February to 146.6. However, compared to year-over-year numbers, March’s index is significantly higher than the 134.1 index score at the same point in time from a year ago. Existing-home sales dropped from 412,500 in February to 410,000 in March, according to data gathered from the National Association of Realtors (NAR), the U.S. Census Bureau and HUD. Housing analysis believe the decline should be attributed to a stark drop in inventory nationwide.
"The last time the median home price for the Twin Cities 13-county metropolitan area was higher than it was in April 2013 was September 2008, marking the 14th consecutive month of year-over-year price gains. New listings were up 7.7 percent over April 2012 to 7,057 properties, and signed purchase agreements were up 16.0 percent to 5,507." ~ Minneapolis Area Association of Realtors
Minneapolis Sellers Market Gains New Records Not Seen Since 2006
Minneapolis real estate is progressing so well, it is seeing the highest pending sales count since May 2006. For the same time period, there were 4,138 closed sales, and inventory levels declined 29.3 percent to 13,113 active listings. Driven by the changing mix of sales, solid demand for new Twin Cities real estate listings and falling Twin Cities low housing inventory, the median home price for the Twin Cities metro rose 12.2 percent to $182,312. One very positive sign is the percentage of all new listings that were traditional, non-distressed homes increased to 77.9 percent, a new high not seen since October 2007. For closed sales, that numbers rose to 68.4 percent, a record level not seen since July 2008.
Twin Cities Minneapolis Sellers Market Gains New Records Not Seen Since 2006
Seller activity was up 7.7 percent overall, while traditional new listings were up 28.0 percent, foreclosure new listings were down 25.6 percent and short sale new listings were down 39.5 percent. The 10K Housing Value Index – which controls for data variability – showed an 8.5 percent increase to $181,381. With only 3.1 months supply of inventory, more seller participation in the market is important to continued recovery. Other stats include:
* Traditional median home sales price was up 8.5 percent to $216,000
* Foreclosed homes median sales price was up 11.7 percent to $134,000
* Homes sold in short sale median sales price was up 5.1 percent to $135,000.
* Foreclosures sold in 94 days
* Short sales sold in 178 days on average.
White House Scorecard - April 2013
Data from the recent White House Scorecard indicates the housing recovery is getting less wobbly. The April Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:
The Administration's foreclosure mitigation programs are providing relief for millions of homeowners as the U.S. continues to gain its footing after wobbling through the recent housing crisis. Nearly 1.6 million homeowner assistance actions have taken place through the Making Home Affordable Program, including more than 1.1 million permanent home loan modifications through the Home Affordable Modification Program (HAMP), while the Federal Housing Administration (FHA) has offered more than 1.7 million loss mitigation and early delinquency interventions. The Administration's programs continue to encourage improved lending standards and processes in the industry, with HOPE Now lenders offering citizens more than 3.5 million proprietary mortgage modifications through February.
Homeowners in HAMP continue to benefit from much needed payment relief, helping them to responsibly meet their home mortgage payment obligations. As of March, more than 1.1 million homeowners have received a permanent home loan modification through the Home Affordable Modification Program (HAMP), saving approximately $546 on their mortgage payments each month, and an estimated $19.1 billion to date. Eighty-seven percent of homeowners starting the program in the past two and a half years have received a permanent modification of their mortgage through HAMP. Payment relief is strongly correlated to sustainability of modified payments over time. As a result, with significant funds at their disposal, HAMP modifications continue to exhibit lower delinquency and re-default rates than industry modifications as reported by the Office of the Comptroller of the Currency.
"With a low 3.1 months supply of housing inventory, more Twin Cities real estate seller participation is in high demand. It is an exceptional and positive market welcoming home sellers to help continue our housing recovery." ~ Home Destination
Advantages Of Higher Home Prices
Steady home price gains are helping to drive the Twin cities real estate housing recovery in several ways:
Higher home prices encourage more people to buy before prices rise further.
They can also entice more homeowners to sell by making them more confident they'll get a good price.
Furthermore, higher prices raise the equity people have in their homes, which makes selling more profitable.
Banks may also be more willing to provide mortgage loans if prices are generally rising.
A well run real estate investment company, or individual seeking to privately invest, are able to profit and generate earnings from higher home prices from owning rental housing that generates investment income.
Many homeowners are taking this as a prime opportunity to move their home equity by cashing out and relocating to where jobs are more plentiful or the home of thier dreams. Move-up buyers are taking advantage of today's home sellers market to gain top prices and transfer the home equity from one home to another.
In the metro some potential home sellers trapped underwater still owe more on their home mortgages than their homes are valued at. That can make it difficult to sell. The good news is many Twin Cities home sellers have sufficient equity, and increasing Twin Cities home prices will help tip the scales eventually for underwater homes.
Home Prices Are Heating Up
Twin Cities real estate is forward-looking and gaining the attention of residential investors. Investors predicted the increase in home prices that we are now witnessing and the end results in corporate earnings of homebuilder stocks are proving them correct. February's Housing data points put out by the U.S. Census Bureau reported that 87.5% of single-family homes in 152 cities had an increase in home prices during fourth quarter 2012 compared to the same quarter in 2011. On a national level the number of residences exhibiting higher home prices is increasing, as only 79.0% of metropolitan areas showed an increase in home prices for the third quarter 2012. (Source: “Fourth Quarter Metro Area Home Prices Show Strongest Performance in Seven Years,” National Association of Realtors web site, February 11, 2013.)
Seasonal Twin Cities Home Prices
While traditionally sales of previously occupied homes leveled off over the winter, the Twin Cities fared the winter of 2012 - 2013 remarkably well. but may increase in the coming months. The date measuring the number of signed contracts to buy homes rose to a three-year high in March. Higher property values can also help the overall economy. They increase individual homeowners' wealth, which is the backbone of our American society, and encourages more spending as homeowners judge that they can afford it. Consumer spending drives 70 percent of economic growth. This Spring is proving positive and surpassing many housing predictions.
Download MAAR's Asking Prices and Inventory for Homes in Minneapolis Minnesota Report
Download the MMAR Weekly Report on how the Twin Cities is a Home Sellers Market with Increasing Home Prices
Home Destination offers you tips on things to do before you sell your home and help home sellers know how to price their home to take advantage of the highest home prices in 7 years. We are help home owners think of more than just getting listed. Call us at 612-396-7832.
Jenna Thuening, a residential Realtor and Certified Distressed Property Expert can help you determine how to price your Twin Cities home.
Eden Prairie MN 55344
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