Minnesota’s housing market has regained its footing. The Minnesota Association of REALTORS® Annual Housing Report shows that low mortgage rates, affordable home prices and rising rents created a situation that bolstered consumer confidence last year and put people into homes across the state, reversing the market’s four-year slide. After declining numbers from 2007 through 2010, and a steady year in 2011, the year ending December 2012 showed the market turning a corner. Signs point to a continued positive direction in 2013.
Statewide, closed sales were at their highest levels since 2007, up 8.4% to 86,029. Minnesota ended 2012 with a 10.4% median price gain ($149,000) compared to 2011.
“Real estate is and always has been a solid long-term investment,” said Jim Cormier, President of the Minnesota Association of REALTORS®. “In Minnesota, 72% of our residents own their homes, making us #2 in the nation. A higher level of homeownership helps strengthen our state economy.”
Sellers are finding that they can sell their homes more quickly than in the previous four years. Sales are happening in approximately 100 days, a -12.3% change from 2011. Sales that were lender-mediated (pre-foreclosure, lender owned and short sale) have decreased by 10%, indicating that the worst effects of previous years’ distressed properties are over.
The 7-county Twin Cities region is seeing some of the state’s strongest signs of recovery, showing the largest increase in closed sales over 2011 (up 17.4% vs 8.4% statewide), and the shortest days on market (64 days vs 100 days statewide).
As the housing market recovers, inventory remains significantly lower than last year, giving buyers a smaller selection. At the year end, there were 36,027 homes for sale, which is down significantly from last year. Lower inventory has given sellers an edge, and well-priced and well-presented listings are receiving 92.2% of list price at sale, on average, an increase of 3% over last year.
“Sustaining this recovery is important to our overall economy,” said Chris Galler, CEO of the Minnesota Association of REALTORS®. “Homeownership helps support and create jobs. For every two homes sold, one job is created – that’s 43,000 Minnesota jobs in an average year of home sales.”
The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.