Twin Cities Housing Market Makes Big Changes in 2008
By Greg Sax on Thursday, January 15th, 2009
After two-plus years of a faltering market, a recent upswing in Twin Cities homes sales during the second half of 2008 is cause for some measured optimism heading into 2009. In the Twin Cities 13-county metro area, total pending sales for 2008 ended at 44,067, up 1.2 percent from 2007. This is the first year-over-year increase in pending sales since 2004. There were 38,746 closed home sales in 2008, down only 3.5 percent from 2007.
In the second half of the year, sales picked up momentum and haven't let up since due to tumbling mortgage rates and increased affordability. Since July, there have been 15.7 percent more pending sales than there were during the same time period last year, and the most recent month saw a year-over-year increase of almost 30 percent.
Home prices continued to decline, as expected. The overall 2008 median sales price was $195,000, down 13.3 percent from last year's mark of $225,000.
Reasons for this decline can be found by dissecting two unique segments in today's housing market: lender-mediated and traditional. In 2008, the median sales price of lender-mediated foreclosure and short sale properties was $145,000, a drop of 13.4 percent from 2007. The median sales price for traditional properties was $223,000, which was a much quieter decline of 4.1 percent from last year. In all of 2008, 31.7 percent of closed sales in the region were lender-mediated, up from 10.4 percent in 2007.
The number of new listings on the market during 2008 decreased by 10.9 percent compared to last year, a drop of over 10,000 listings from last year and the lowest showing since 2003. This has helped stem the tide of oversupply our market has been experiencing in recent years.
The number of new foreclosure and short sale listings in the fourth quarter of 2008 was actually 4.3 percent lower than the third quarter, which is the first downward quarterly movement in new lender-mediated listings since 2003.
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