Home sales in the Twin Cities, Minn., area were down for the seventh straight month in October, as near-record inventory finally cut into home prices, according to reports from two Twin Cities-area Realtor associations.
Realtors recorded 3,895 sales of existing single-family homes, condominiums and townhouses last month, down 19.6 percent from 4,843 sales in October 2005. During that period, the median home price in the 13-county region slipped from $230,000 to $228,000 — a 0.9 percent decline.
Some 7,894 new listings were added to the market in October, which is 4 percent below a year ago, marking the second consecutive month of year-over-year declines, after 14 months of record highs, according to the Saint Paul Area Association of Realtors.
Despite the drop in inventory levels, there were still 30,491 active listings at the end of October, which is a 24.3 percent increase from the same time last year.
The Housing Supply Outlook declined slightly to 7.5 months, which means it will take the current inventory of homes 7.5 months to sell through completely. The market is considered balanced when there is roughly a 5-month supply of homes available for purchase.
“Both the slight drop in median sales price and the continual decrease in housing inventory illustrate the market’s attempt to correct itself. With the region’s strong economy, continued job growth, and continued historically low mortgage interest rates, the market will find its balance soon,” said June Wiener, president of the Saint Paul Area Association of Realtors.
For the entire year, the Minneapolis Area Association of Realtors expects median price growth to settle somewhere between 1 and 2 percent, down considerably from the 6 percent to 12 percent growth seen in recent years. The group also said sales will continue their annual winter decline in the coming months until reemerging from hibernation in early 2007.
Statistics for this report were provided by the Saint Paul Area Association of Realtors and the Minneapolis Area Association of Realtors.