Home prices and sales in the Twin Cities rose in March, suggesting the onset of a turnaround in the region, a report said Wednesday.
March is the first time in nearly two years that the region's median sales prices came in higher than the same period a year before, the Minneapolis Area Association of Realtors said.
The median sales price for Minneapolis-St. Paul rose 6.4% year-over-year in March, reaching a price point of $149,000 last month, the largest gain since April 2010. Overall, the median price point improved even though it dropped when evaluating the types of homes sold.
That price increase, however, reflects a shifting market share in terms of sales volumes and not price gains in the traditional, foreclosure and short sale segments, the association cautioned.
Prices on traditional home sales fell 1.2% to a $195,000 median, while prices on foreclosures declined 2.8% to $105,000 and short-sale prices dropped 3.8% to $128,950 in the most recent report.
Pending home sales in the Twin Cities surged 20.4% as the monthly supply of inventory declined 40% to 4.6 months, making it the lowest inventory level since January of 2006.
The number of homes on the market also fell 27.5% from last year to 17,081 total listings, the lowest reading since January of 2004.
"Don’t mistake price gains for a fully recovered market," said Cari Linn, president of the Minneapolis Area Association of Realtors. "Supply is down, and the mix of homes selling is shifting toward traditionals. We’ll accept that as progress and build upon it."
Homes in the Minneapolis and St. Paul are taking about 144 days to sell compared to 160 days a year earlier. On average, sellers are getting about 92.1% of their asking price, compared to 88.7% in March of 2011.
"It’s looking increasingly likely the worst is behind us," said Andy Fazendin, MAAR president-elect. "We continue to see encouraging signals from the market that allow for an improving view on residential real estate in 2012."