This information was provided by The Greater Lakes Association of REALTORS

MAY HOUSING STATS SHOW SIGNS OF STABILITY

Positive signs of the long awaited housing recovery may be on the horizon according to the May Minnesota Housing Report released by the Minnesota Association of REALTORS®. Many experts and those involved in the industry were fearful of the numbers after the Home Buyer Tax Credit concluded in April.

For transactions entered into before April 30, 2010, a first‐time purchaser could receive an $8,000 credit and many existing homeowners qualified for $6,500 tax credit. Because of this incentive, many feared that May and June residential transaction numbers would tumble as purchasers rushed to take advantage of the credit.

“Pending Sales – contracts written but not closed ‐ for Minnesota were off significantly, however many of the other indicators showed surprising strength,” said Michael Hoffman, President of the Minnesota Association of REALTORS®. Median home prices were up, Average sale price was up and the Affordability Index is very positive for potential homebuyers.”

Many Minnesota homeowners are concerned about the value of their property and in May the year to date comparable numbers showed solid annual growth. Statewide, Median Sales prices were up 3.4% compared to values in 2009 and up 7.2% over 2008. The median is the midpoint, indicating as many transactions above as below the stated price. In May the median home price was $155,350.

In the Brainerd Lakes Area, the median home price increased to $146,000, up 9.8% when compared to values in May 2009. Year to date, the area is up 7.7% when compared to the figures from a year earlier.

Another positive sign for housing values was the strong increase in Average Home Prices. The year to date figure was up 33.3% compared to prices at this time in 2009 and up 3.3% over values in 2008. This is a strong indication that move‐up buyers were purchasing in 2010. The average home price for Minnesota, year to date through May is $188,714.

The Brainerd Lakes Area year to date average sale price was $173,104, an increase of 43.6% from the May 2009 year to date number. Average values in the Brainerd Lakes Area have increased consistently since the beginning of the year.

Even with higher home values, the Housing Affordability Index (HAI) increased in May as low interest rates made housing more affordable to Minnesota homebuyers. The HAI measures the median income of a Minnesota family compared to median home price. When the index measures 100, the median family has the income necessary to qualify and purchase a median priced home. Statewide the HAI is at 120, which means the median family income is 120% of the level required to purchase a median priced home. Historically low interest rates have helped keep housing affordable to majority of Minnesota families.

The Minnesota Association of REALTORS® is “The Voice for Real Estate” in Minnesota representing nearly 20,000 members involved in all aspects of the real estate industry.

The Gallery of Homes is a member of both the Greater Lakes Association of REALTORS and the Minneapolis Association of REALTORS which provides the Northstar MLS system serving the twin cities area which is the 5^th largest MLS system in the country. As a member of this association, we receive a real estate review for this market as well. Because the twin cities real estate market does have a direct impact on our local real estate market, I thought I would share the latest report we received from them:

Weekly Market Activity Report

Remember how we've been saying that the Twin Cities housing market has been getting successively slower in home sales every week since the tax credit ended? Umm, yeah, well that's still happening.

Pending sales for the week ending June 5 were another 57.0 percent behind the pace seen a year ago, dropping from 1,226 in 2009 to 527 today. This is the fifth consecutive week-to-week drop in signed contracts. While activity is down across the board, lender-mediated foreclosures and short sales are slowly increasing their market share of sales because traditional home sales have declined sharply. During this week last year, 37.8 percent of pending sales were lender-mediated; this year the share is 43.3 percent.

Thankfully, new supply is not growing in lock-step. The 1,521 new homes placed on the market for the most recent reporting week were 29.6 percent less than last year at this time. This has helped keep the Months Supply of Inventory metric at 6.9 months, down 9.3 percent from May 2009.

Click Here To View the Full May Real Estate Review

Please feel free to contact me with any questions

Dan Pflugshaupt

REALTOR, GRI, e-PRO

218-839-7700

Dan@GalleryofHomesMN.com

Specializing in North Central Minnesota Lakeshore & Recreational Property