Number of Homes for Sale Continues to Dwindle in October

The number of homes for sale in the Twin Cities continued dropping at “breakneck levels” last month, according to statistics compiled by the Minneapolis Area Association of Realtors (MAAR).

The number of properties available in the metropolitan area last month hit its lowest level since 2004.

“It’s not an encouraging situation,” John Elliott, a real estate agent at Rosemount’s Easy Street Realty, said Friday. “I’ve been around for four recessions, and this one’s worse than the other three put together.”

The reason for the low numbers, according to Elliott: “People who aren’t under distress are not selling.

“In other words, [the number of] what we call market-rate homes [is] going down faster than foreclosures and short sales are going up. There are more foreclosures and short sales, and as that number accelerates, those homes are driving down the value of non-distressed properties to the point where people aren’t putting their homes on the market because they’ll have to take such a beating on their houses.”

The number of properties currently available in the Twin Cities dropped to 21,145 in October, a decline of more than 6,000 listings from the same time in 2010. The last time the rate was so low was in October 2004, when there were only 19,730 properties for sale in the metro area.

“It’s something of a fallacy to call this a buyer’s market,” said Brad Fisher, president of the Minneapolis Area Association of Realtors, in the report. “Good-quality homes that are priced right are in short supply. Buyer demand exists, but we need more sellers in the game.”

Specific October numbers for Rosemount were not yet available.

Last month, 43.5 percent of pending home sales in the metro area were lender-mediated, a slight increase from September. The metro market now has two months of foreclosure supply, 13.1 months of short-sale supply and 7.5 months of traditional, non-lender-mediated supply.

The median sales price was also down in October: $155,500, 9.4 percent lower than the price in October 2010. Traditional, non-lender-mediated prices fell 11.5 percent last month to $190,000. Foreclosure prices dropped 10.5 percent to $102,000 and short-sale prices were down 17.6 percent to $127,750.

The MAAR noted that the Twin Cities housing market had the opposite problem just four years ago, when there was an oversupply of properties available.

Cari Linn, president-elect of the MAAR, agreed with Elliott’s assessment of the situation.

“We believe that many consumers are playing a waiting game for their home values to improve before considering selling again,” she said. “That’s certainly a logical decision, especially as winter approaches, but there’s a lot less competition for buyers than there used to be.”

Elliott, who is 71, has been in the real estate business since 1965, and said he doesn’t see a quick end to the nation’s real estate woes.

“As long as the federal government keeps dinging around with the financial markets and that sort of thing, we’re going to be in trouble,” he said. “Until they let this thing burn out, it’s not going to correct itself.

“This situation is not something I like. It’s not encouraging to me.”