The median home price in Minneapolis-St. Paul shot up 15.5% annually in August as inventory levels declined to nine-year lows, the Minneapolis Area Association of Realtors said Wednesday.

The region's median price hit $179,000 in August, the sixth consecutive monthly increase. At the same time, the average sales price  rose 10.4% over year ago levels, hitting $222,922 in August.

Home sales also grew 19.5% annually with 4,877 pending sales in August.

Closed real estate transactions inched up 12.3%, making August the 14th consecutive month of annual gains.

During the same month, inventory levels fell with new market listings declining 1.8% from last year with only 5,972 new for-sale properties in August. The entire volume of homes for sale also declined 30.5% from August 2011 levels with 16,348 homes on the market last month.

Inventory levels in the Twin Cities haven't been this low since December 2003. In fact, the supply of homes for sale has fallen 54.5% from the market's peak in July 2007.

"With inventory levels nearing 10-year lows, buyers are scrambling to find the perfect house," said Cari Linn, president of the Minneapolis Area Association of Realtors. "The next step of recovery will be getting hesitant and distressed sellers back into the market."

In August, 32.4% of Twin Cities listings were classified as foreclosures and short sales. Distressed properties made up 35.1% of all active listings, while distressed properties represented 36% of all closed sales.