Home sales in the Twin Cities, Minn., market dropped for the ninth straight month in December while prices kept pace with their year-ago levels, according to reports from four Twin Cities-area Realtor associations.
There were 2,950 sales of existing single-family homes, condos and townhomes last month, down 18.9 percent from 3,638 sales in December 2005. Total sales activity for 2006 came in at 47,906 sales, which was down 16.3 percent from the 2005 level.
The median home price in the 13-county region last month registered $229,000, down just 0.4 percent from the same month in 2005. For 2006, the median sales price was $230,000, an increase of 0.5 percent compared to 2005.
“Since 1998, price growth has been extraordinarily high, between 6 (percent) and 12 percent each year,” said Kay McDonough, 2007 president of the Southern Twin Cities Association of Realtors. “The calm in appreciation was expected, and is a natural byproduct of the market shift.”
Although more property owners decided to list their homes for sale last month compared to the same month a year earlier, the number of new listings in December, at 4,361, dropped from 5,981 new listings in November and 7,894 in October.
Inventory remained high in December, with 22,834 homes available for sale, up 19.6 percent from 19,098 in December 2005. All that supply colliding with lowered demand meant that the buyer gained more control over the process in 2006, and it showed in home prices, the Minneapolis Area Association of Realtors (MAAR) reported.
Until the latter part of 2006, housing affordability had been on a general decline since early 2003, according to the MAAR Housing Affordability Index. Prices rose beyond what income levels and interest rates could mitigate, and the diminished affordability was a chief factor in the current pause in buyer activity. As prices moderated and interest rates softened in the latter part of 2006, affordability conditions have improved significantly in recent months.
Statistics are provided by the Saint Paul Area Association of Realtors, the Minneapolis Area Association of Realtors, the Southern Twin Cities Association of Realtors and the North Metro Realtors Association.