New data from the Minneapolis Area Association of Realtors again show lackluster performance for the Twin Cities housing market last month.
A separate report from the housing research firm CoreLogic reveals a recent uptick in the number of Twin Cities homeowners who owe more than their homes are worth.
There are not many bright spots in the latest Twin Cities housing report. But realtors, who are eager for good news, are trying hard to ferret them out.
"Consistency is not a bad thing in this market, and I'm looking forward to more of it in the coming months," realtor Aaron Dickinson said.
The consistency Dickinson points out might not look so exciting to the average homeowner or seller, but he's happy to see that pending sales in August hit levels that are roughly consistent with years past. Pending sales were up compared to August of last year, but the comparison is skewed because of a lull in sales in the wake of tax credits expiring.
Dickinson believes that the sales numbers, combined with a shrinking backlog of homes for sale are pointing to some kind of stabilization in the market. Inventory levels dropped by about 21 percent from last year, the largest year-over-year decline in years.
"Supply and demand are finding a better equilibrium. That's a place to start for looking for housing price support," Dickinson said.
But that housing price support did not arrive in August. The median home price fell about 11 percent from the same time last year.
Foreclosures and short sales made up a smaller share of last month's sales than they had in more than a year. But they still played a big role in the market. And an undesirable role: because those properties sell at steep discounts, they drive the overall median price down.
That consistent downward pressure worries Augsburg economist Jeanne Boeh.
"We're just really in a holding pattern, and not a very good one. Clouds ahead," Boeh said.
Unlike Dickinson, Boeh is less enthusiastic about declining inventory levels. They reflect sellers' continued fear of putting their homes on the market, she said. Recent data from CoreLogic help explain that caution, she said. According to the research firm's second quarter report, nearly 23 percent of Twin Cities homeowners are underwater or close to being underwater with their mortgage — meaning they owe more than their homes can sell for on the current market. That number is up slightly from the same period last year.
"And if prices continue to decline, people are not going to sell. They don't have home equity to move up," she said.
And when people are underwater, Boeh said, they're more likely to walk away from their mortgages, which would just add to the foreclosure drag on the market.