The Twin Cities metro area housing market continues to struggle as all the indicators moved in the wrong direction, compared with a year ago, according to February statistics from the Minneapolis Area Association of Realtors.
The result is a tough year-over-year comparison because the tax incentive for first-time home buyers last year probably skewed the numbers, making them more negative.
But a closer look at the February numbers shows there may be some pre-spring “house cleaning” going on as pending sales on bank-owned properties (those in foreclosure) surged nearly 40 percent to 1,276, compared with a year ago, while traditional pending sales fell 27 percent to 1,350. Reported pending “short sales” fell 15 percent to 301 properties.
At the same time, new listings for both traditional and short sales fell, but new listings for bank-owned properties continued to rise year over year.
Average days on the market across all categories went up considerably from 135 to 157, the median sales price dropped from $159,000 to $140,000, and total active inventory went up 2 percent to 23,794 properties.
If there was a silver lining, pending sales in February increased 8 percent, and the median sales price rose nearly 2 percent from January.
But some brokers think the pending sales are understated.
“The numbers are showing pending sales are down, but I’m not buying that,” said Jeremiah Bouley, with RE/MAX Results out of Elk River. “There are a ton of short-sales accepted offers” pending bank approval, he said, that do not get counted as pending sales.
“I’m doing a lot of work with short sales right now, and if there’s an offer on those, they generally stay on the active inventory. I think we’re going to see sales figures go up in a few months” as a lot of short sale deals close, he said.
“These banks, I think, are starting to work with people” on short sales. “That’s how buyers get the best deal, if they can wait a little bit,” Bouley added.
“I’m seeing multiple offers. Some houses are getting bid up,” he added. At the very low end, houses in the $50,000 to $75,000 range are occasionally selling for slightly above the asking price, he said.
He says he has several buyers waiting on short sales, which are the majority of his business now. “These banks, I think, are starting to work with people” on short sales. “That’s how buyers get the best deal, if they can wait a little bit,” he added.
Bouley said that 75 to 80 percent of his buyers are purchasing their primary residence, while 20 to 25 percent are investors taking advantage of low prices.
“Especially for the first time homebuyer, all they have to have is a job, decent credit and not too much debt. I can get them into a house,” he concluded.