State's real estate market shows promising signsThe Minnesota real estate market is showing more promise than expected after the expiration of the Home Buyer Tax Credit, according to realty leaders.
The Minnesota real estate market is showing more promise than expected after the expiration of the Home Buyer Tax Credit, according to realty leaders.
June figures on housing activity in a new report from the Minnesota Association of Realtors are more positive than negative for homeowners.
“Minnesota’s residential real estate market is showing some very promising signs a few months after expiration of the Federal Home Buyer Tax Credit,” said Michael Hoffman, president of the Minnesota Association of Realtors. “June closed sales were up 11 percent compared to last year, median home prices were up slightly to $155,000 and the inventory supply was down 9 percent.”
June numbers also showed:
•Pending sales, which are home sales where contracts have been drafted but not yet closed, are down 33 percent compared to the same time last year.
•Median prices have increased in eight of the state’s 13 Economic Regions: Upper Minnesota Valley +16.8 percent; Southwest Region +10.7 percent; Central Region +4.1 percent; and Seven County Twin Cities +6.2 percent.
Unemployment in some economic regions is a major cause for localized price difficulties. As an example, in the East Central Region the unemployment rate is 8.8 percent. For June the median home price fell -6.4 percent compared to the median a year earlier. Conversely, in the Southwest Region where the unemployment rate is 4.7 percent, home values increased 55.9 percent in June 2010 when compared with June 2009 and are up 10.7 percent through the first six months of 2010.
Lower inventory levels are also helping boost home values. However, in many areas foreclosures and short sales are playing a role in temporarily damping the area median home price.
The Housing Affordability Index (HAI), which measures the median income of a family compared to the median home price, has reached 113, which means the median family income has 113 percent of the necessary income required to purchase a median priced home using traditional qualifying ratios and 30-year fixed-rate financing.