The Minneapolis Area Association of Realtors (MAAR) reported Tuesday (June 12) that May's median home prices in Southwest Minneapolis fell 5.7 percent from the same month a year earlier.
Southwest Minneapolis's median home price was $268,700 in May, down from $285,000 the same month in 2011, according to MAAR data. That downtick showed in marked relief from the rising fortunes of the Twin Cities-area housing market where the median home price posted a 10.5 percent year-over-year increase, the third consecutive monthly gain in 2012.
Meanwhile, Southwest Minneapolis had 94 completed home sales in May, a 94 percent increase from the same period in 2011 when the city posted 59 completed sales.
Southwest's year-to-date total closed sales is up 34.1 percent from the same period in 2011. There were 303 completed home sales for the first five months of 2012 compared with 226 for the same period in 2011, MAAR reported.
Another positive sign is the percent of the original list price that sellers are receiving on their homes. That figure was 95.1 in May in Southwest Minneapolis, up from 92.7 percent the prior May, according to MAAR.
And Southwest homes on the market took an average 124 days to sell in May, down from 151 days the same month in 2011, according to MAAR statistics.
Across the Twin Cities region, the month of May provided more evidence that a real estate recovery is under way.
The median regionwide sales price was $169,000, up 10.5 percent from the same month last year. That represented the third-largest year-over-year jump since January 2004 and the third consecutive month of year-over-year gains.
Median prices have risen 22.5 percent since February (from $138,000 to $169,000), and are now at the highest level since October 2010.
Part of that was due to decreased supply. The number of homes for sale has dropped for 16 consecutive months, down 31.1 percent from last May to 17,262 active listings—the lowest inventory reading for any month since January 2004.
That trend continued in May; during the month, buyers signed 5,130 purchase agreements, 27.3 percent higher than the same month last year, and sellers introduced 6,599 properties to the market, 6 percent less than May 2011. This combination of activity drove down the number of homes for sale on the market to 17,262, down 31.1 percent.
As a result, "Residential home prices have been increasing steadily," said Cari Linn, MAAR’s president. "It's been a positive change for our local housing market and it's been a long time coming."
Linn noted that another factor in the median price rise is the fact that so-called “distressed properties” now comprise a smaller share of overall sales. Traditional homes now sell for a median price of $205,000, foreclosures sell for $116,350 and short sales go for $135,000, so the smaller proportion of the latter translates into median price gains.
Traditional closed sales were up 50.1 percent, while foreclosures fell 12.8 percent and short sales increased 12.9 percent. Together, distressed homes made up 31.1 percent of all new listings and 39.4 percent of all closed sales, the smallest shares since June 2008 and September 2008, respectively.
Homes sold in 125 days, on average, down 19.6 percent from last May. Sellers received an average of 94.5 percent of their list price, up 3.8 percent from 91.1 percent last May.