The Twin Cities housing market in April continued to fare poorly in comparison to the same month last year, when the federal tax credit for first-time homebuyers buoyed sales.
Signed purchase agreements in the Twin Cities declined about 26 percent between April 2010 and last month, the Minneapolis Area Association of Realtors reported. Completed sales fell about 5 percent over the same period.
Foreclosures turned in the strongest sales performance. Pending sales of bank-owned homes rose 31 percent year over year.
Foreclosure sales and short sales continue to comprise a large share of the market, about 46 percent. They sell at firesale prices. That pushes down the median sales price for the overall market, which fell about 15 percent from a year ago to $145,000. Excluding distressed properties, the median sales price drop was much smaller, registering a decline of just 3 percent.
Realtor Aaron Dickinson said last year's April numbers were artificially high because of the looming expiration of the first-time homebuyer tax credit. He said it's more important to look at bigger trends.
"Given that the economy is starting to show signs of recovery and supply is decreasing in the Twin Cities, and we have rental supply decreasing in the Twin Cities which will help buoy and support demand for housing, I think that will put more support behind the prices," Dickinson said.
Still, Dickinson said it will take a couple years for the market to clear itself of foreclosures and short sales.