Across the region, the market is finally starting to tilt in favor of sellers, rather than buyers, the Minneapolis-Area Association of Realtors is reporting this month.
The bottom line: The median sales price in June 2012 rose 10.7 percent from the previous June to $179,500. That’s the second-largest annual gain since January 2004 and the fourth consecutive month of year-over-year gains. Excluding only June 2010, home prices in the Greater Twin Cities area are now at their highest level since October 2008.
However, in Apple Valley and Rosemount—where in the past couple of months median sales prices virtually skyrocketed compared to previous levels—sales price did increase in June, but more modestly, and at percentages lower than the metro-area average.
In Apple Valley, the median sales price increased just less than 3 percent, while Rosemount saw a greater gain, with an 8.4-percent increase.
The higher home prices are a result of declining supply, according to MAAR, as well as rising demand. In June 2012, buyers signed 4,917 purchase agreements, 16 percent higher than June 2011. In Rosemount, the market experienced a 29-percent increase in closed sales, while Apple Valley maintained the exact same number of closed sales—64—as last June.
Meanwhile, the number of homes for sale has dropped for 17 consecutive months, down 31.2 percent from last year to 17,103 active listings—the lowest inventory reading for any month since January 2004. June inventory for Rosemount decreased by nearly 36 percent, while in Apple Valley it was down more than 40 percent.
Months’ supply of inventory, a standard industry measure of inventory, dropped 44.6 percent to 4.4 months, the lowest reading for any month since December 2005. In Apple Valley that number is now 3.1 months' inventory, and in Rosemount, 3.7 months'.
Realtors cited several other bits of good news from the close of the second quarter: Homes are selling in 113 days, on average, down 22 percent from last year (Apple Valley: 81 days; Rosemount: 106 days).
Sellers in the Twin Cities are getting an average of 95.1 percent of their list price, up 4 percent from last year (Apple Valley: 96.6 percent; Rosemount: 98.8 percent). And cash buyers are making up 19.3 percent of all closed sales.
Perhaps most significantly, people putting their homes on the market no longer have to compete with quite such a huge flood of short sales and foreclosures, collectively known as "distressed sales." In June, distressed sales accounted for 30.6 percent of all new listings and 34.6 percent of all closed sales, the lowest shares since June 2008 and August 2008, respectively.
“It’s difficult to find a negative trend in the local housing market right now,” Cari Linn, MAAR's president, said in a news release. “After many years of decline, it’s a welcome change of pace.”