Rising rents coupled with lower-than-average prices and mortgage rates have kept the housing recovery going in July for The Twin Cities. Inventory, which has been tight in recent months, started to grow slightly in July. In fact, new listings rose a healthy 24.6% — the second-largest gain since April 2010.
The inventory pool in July grew to 15,671 properties, a 13% drop from July 2012, but still the smallest year-over-year drop in inventory in more than two years, data from the Minneapolis Area Association of Realtors revealed.
The median sales price was $208,757, a 17.2% increase from July 2012. The price growth is largely due to a shift in sales type. Foreclosures and short sales made up 45.4% of all sales activity as recently as July 2011. In July 2013, these two distressed segments only comprised 20.6% of total sales.
On the seller side, the percentage of all new listings that were distressed in July dropped to 17.9%, down from 41.2% in July 2011.
"If you want to see the type and price of properties that will sell next month, look at what sellers are listing this month and last month," said Andy Fazendin, president of MAAR. "Banks are showing a decline in distressed listing activity, which bodes well for ongoing recovery."
New listings jumped 24.6% overall, but traditional seller activity skyrocketed 55.7%, marking its largest growth in nearly 10 years.
Foreclosure new listings fell 31.2%, while short sales dropped 42.1% in July. With 17 consecutive months of year-over-year median price gains, multiple-offer situations and just 3.6 months’ supply of inventory, the same market that recently favored buyers is now tilting toward sellers.
At the quickest pace in six and a half years, homes are selling in an average of 72 days. Additionally, sellers are receiving an average of 97.5% of their original list price, which is the highest ratio in just over seven years.
The traditional median sales price rose 3.6% to $224,900; the foreclosure median sales price jumped 11.6% to $135,000; the short sale median sales price increased 18.6% to $153,000.
On average, traditional homes sold in 62 days for 97.6% of the original list price, foreclosures sold in 83 days for 98.3% of the original list price and short sales lagged at 166 days and for 93.8% of original list price.
"Sales and listing activity remained strong during July," said Emily Green, MAAR President-Elect. "Consumer demand has withstood marginal mortgage rate increases, and traditional seller activity is on the mend."