The Twin Cities housing market continued to see problem spots in January, though some signs were promising.
The median Twin Cities sales price last month dropped nearly 11 percent from January of 2010 to $140,000. The Minneapolis Area Association of Realtors attributes the decline to the mix of homes sold last month. Many were foreclosure and short sales, which tend to sell at fire sale prices, and that dragged down the median price.
"Buyers tend to shop for value during the winter months, equating to lower prices, while traditional sales begin to warm up with the spring thaw," said Brad Fisher, President of the Minneapolis Area Association of Realtors in a statement.
Traditional, non-distressed properties actually saw a median sales price bump of nearly 2 percent from the previous January, reaching $201,500.
Jeanne Boeh,an economist at Augsburg College, said traditional sellers are scared off because the percentage of the original list price received at sale is declining. Last month it fell to about 88 percent, the lowest number on record.
"The fact that the percentage of original sales is still declining is one of the reasons that people don't think we're at the bottom of the housing price decline," Boeh said.
Home sales delivered the most positive news. Signed purchase agreements, known as pending sales, increased nearly 4 percent last month from January 2010. And completed home sales grew by more than 10 percent over that period.
Home sellers face a challenging environment as the amount of time homes spend on the market increases. Sellers have seen their ultimate sale price fall to the lowest percentage of the original listing price on record.
In addition, the slowdown in sales last year is boosting the supply of homes on the market--that despite a decrease in the number of homes coming on the market. The Twin Cities home inventory increased 14 percent last month from a year earlier, putting the months of supply at 7.6 months.