Without any government stimulus, the Twin Cities housing market continued to take small yet noticeable strides toward recovery in September. Sellers listed 5,562 new homes on the market, down 16.8 percent from last year. Buyers entered into 3,752 purchase agreements, up 37.4 percent over September 2010 levels. That's the fifth consecutive month of double-digit, year-over-year gains in buyer demand—primarily driven by slowed activity at this time in 2010.
With less product entering the market and relatively strong sales, inventory levels dropped 20.7 percent to 22,476 active listings. That marks the largest inventory decline in more than seven years. A leaner inventory count combined with stronger purchase demand has moved the market toward balance.
There are now 6.8 months supply of inventory, just outside of the ideal five- to six-month range, down from 8.7 months last September and the lowest September figure since 2005.
The median sales price was down 6.9 percent from September 2010 to $155,500. Traditional prices fell 12.0 percent to $188,000; foreclosure prices dropped 8.2 percent to $102,825; short sale prices were down 7.5 percent to $129,500.
Sellers are starting to see more of their asking price for the second consecutive month – up to 91.1 percent. On the foreclosure front, 39.7 percent of all closings were either foreclosures or short sales while 32.8 percent of new listings fell into the distressed category.