Home sales in the Twin Cities, Minn., market continued to fall in January, impacted by a rush of new listings and lower prices, according to statistics from two area Realtor associations.
There were 2,502 sales of existing single-family homes, condos and townhomes last month, down 13.3 percent from 2,886 sales a year ago. January’s decline marked the 10th consecutive month of lower year-over-year sales.
The median price paid for a home in the 13-county region last month dipped approximately 1 percent from a year ago to $225,000. For 2007, the Minneapolis Area Association of Realtors expects median-price growth to settle somewhere around 1 percent. For several years prior to 2006, price appreciation was in the 6 percent to 12 percent range, which is well above historical norms for the region.
New listings last month were ahead of their year-ago level by 5 percent, posting 8,931 units listed for the month, but were up an extraordinary 105 percent from December’s 4,361 new listings. At the end of January there were 25,188 housing units for sale, up 17 percent from the same time in 2006.
“It’s important to understand that a quick and easy rebound in sales isn’t in the cards — the market rebound will be slow in its start and gradual in its effect,” said Deb Greene, president of MAAR.
Housing affordability declined slightly due to a rise in interest rates, which have been up steadily for the last two months, according to MAAR, but the drop in median price helped to lessen the blow for buyers.
“Some mistake flat home prices as a negative when they are actually a necessary ingredient to the return of a robust market,” Greene said. “Consumers must be able to afford our region’s homes to buy them.”
MAAR’s Housing Supply Outlook rose slightly to 6.5 months in January, which means it will take the current inventory of homes 6.5 months to sell through. The market is considered balanced when there is roughly a five-month supply of homes available for purchase. Previously owned homes have 5.9 months of supply, while newly constructed homes have 10.3 months of supply.
Statistics are provided by the Saint Paul Area Association of Realtors and the Minneapolis Area Association of Realtors.