The housing market in Minnesota continues to show signs of stabilizing with nine of the ten key market indicators showing positive movement in January. The only area that’s still lagging, according to Minnesota Association of REALTORS® housing report, is the median home price; it dropped -0.5 percent in January.
Statewide, closed sales for the first month of 2012 were up 6.4 percent and pending sales were up 14.5 percent compared to 2011. Higher closed and pending sales continue to help decrease inventory throughout Minnesota and are a positive indicator of a stronger housing market overall
Closed Sales: January 2012 compared to January 2011
Statewide + 6.4%
7 County Metro Region +16.4%
Arrowhead Region +10.2%
Central Region +16.5%
East Central Region +16.4%
Headwaters Region +178.9%
North Central Region +237.3%
Northwest Region -8.6%
South Central Region -28.2%
Southeast Region +4.4%
Southwest Central Region +9.8%
Southwest Region +18.9%
Upper MN Valley Region +23.7%
West Central Region -9.5%
For the eighth straight month, inventory levels of homes for sale have dropped. In January, 19.2 percent fewer homes were on the active market compared to last year. Although the number of homes for sale is down, many price ranges still have more homes for sale than buyers looking to purchase.
“Decreasing inventory remains a key factor in our continued recovery and the recovery of home values,” said June Wiener, President of the Minnesota Association of REALTORS®. “Removing more properties, including lower-priced properties, from the market will help prices rebound.”
Minnesota’s Housing Affordability Index (HAI) increased in January as interest rates fell and distressed properties made residential housing more affordable.
Minnesota Housing Affordability Index
The January HAI was 149, an eight percent increase from a year earlier. The HAI measures the median income of a Minnesota family compared to median home price. When the index measures 100, the median family has 100% of the income necessary to qualify and purchase a median priced home.
Looking at the first month of 2012, pending sales in January were a positive sign as well for Minnesota’s housing market. Pending sales statewide were up 14.5 percent from January of 2011.
Pending Sales by Month
“Closed sales were also up more than six percent in January compared to the same time last year,” said Wiener. “Those numbers paired with a double-digit increase in pending sales across Minnesota reaffirms the trend that REALTORS® are seeing in the marketplace – a trend of a market continuing its recovery.”
You can download the entire January 2012 Minnesota Housing Report.
The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 19,000 members who are active in all aspects of the real estate industry.