The Twin Cities housing market took a few careful strides toward recovery in August. Sellers brought 6,144 new listings to the market, down 10.7 percent from last year. Buyers entered into 4,358 purchase agreements, up 46.4 percent above the post-tax credit lull of August 2010.
Inventory levels dropped to 23,502 active listings, representing 21.4 percent fewer than last year and the largest year-over-year decline in nearly seven years.
The median home price was down 10.9 percent from August 2010 to $156,000. Traditional prices fell 13.3 percent to $196,000; foreclosure prices dropped 14.8 percent to $97,950; short sale prices were down 9.0 percent to $132,000.
Absorption rates – often a precursor to price movement – showed improvement for the second consecutive month. There are currently 7.1 months supply of inventory, which is just outside of the ideal range of 5 to 6 months often used as the measure for a balance between supply and demand. That's down 18.9 percent from last August and marks both the largest decline and lowest level in 18 months.
On the foreclosure front, the share of all closed sales that were foreclosure or short sales (lender-mediated) decreased to 38.0 percent—the lowest level in 14 months. The share of all new listings that were lender-mediated increased slightly to 33.4 percent. The fact that relatively more homes in financial distress are selling off the market than are entering the market is still a positive sign.
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