Twin Cities pending home sales fell off dramatically in May following the expiration of the federal home buyer tax credit, according to new data out Thursday from area Realtor groups.
Pending home sales, which involve a signed purchase agreement, plummeted last month by nearly 25 percent compared to May of last year.
Brad Fisher, President of the Minneapolis Area Association of Realtors said the expiration of the tax credits in April played a big role in the pending sales drop-off.
"We expected to see a decline. We are just are uncertain now to see how long it's going to take for the consumer to realize they still have great interest rates, they still have great values out there," he said.
Fisher says a decline in pending sales doesn't bode well for home prices.
"I think we're going to probably fairly static numbers for a while. I don't think we're going to see gains anymore," said Fisher.
The Twin Cities median home price last month hit $175,000 -- up about 6 percent compared to last May. That was the fifth consecutive month of year over year gains.