Across Minnesota the number of houses under contract to sell but not yet closed jumped 41.2 percent in June 2011 compared to a year ago as the median sales price fell 9.3 percent, according to figures released this morning by the Minnesota Association of Realtors.
Haling the pending sales increase as a promising sign of recovery in the housing market, Russ Portele, president of the realtors’ group, said: “The number of pending sales is a key indicator of the direction the housing market is moving. Affordable homes, affordable interest rates and an improving economy are all positive signs for the real estate community.”
In June, 8,240 properties had purchase agreements written on them compared to 5,836 in June 2010. This was the highest number of pending home sales since April of 2010 when the federal tax credit was expiring. Pending transactions are less than 1 percent below the year to date pending sales from 2010 and less than 2 percent below 2009.
The median sales price statewide for a home selling in June dropped 9.3 percent to $145,000 and the number of days it takes to sell a listed property increased 11.8 percent to 124 days. For the Twin Cites Metro area, the median price fell 9.6 percent to $169,900. Statewide, there is more than nine months of inventory of homes for sale and nearly eight months of inventory in the metro area.
Chris Galler, CEO of the association, pointed out that the combination of high median income in the state, falling home prices and low mortgage interest rates have pushed a measure of affordability to historic high levels. The Housing Affordability Index remained above 200 in June, meaning that median family income is twice the level necessary to qualify for a median priced home in the state.
Galler was encouraged but sober in his outlook. “We’re still heavy in inventory from where we would like to be. We’re slowly evolving until we get back to a balanced market.”
First-time buyers are shying away from distressed properties, especially short sales, he said, which is “good for the traditional seller” but will slow the reduction in distressed properties overhanging the market.